Exit range for 2012 is between 18-20 thousand MBoe
Eagle Ford is representing one fifth of that volume ( 3500-4000)
No indications about the other assets exit range . To be complete , they should have add it .
They spudded their first well in mid January on the recently acquired Bakken acreage, no details given so far .
Focused on development of existing acreage
•2013 capital budget will focus on high return oil/liquids areas
•Margins and EBITDA projected to continue to increase throughout the next two years
•Limited overhead expansion required to meet growth objectives
Judging to their presentation , it will all be EF/Bakken/Marcellus and Utica this year.
I don't think that if the sell the EF , their Pearsall shale will be part of the deal . My guess
is they will further develop it first even adding some acreages if an opportunity shows up .
Your comments are most welcome ,
Good investments to all
Oilman- Masayo told me to view your post on the Eclipse/Antero Wells - Holy Smokes!
Proximity wise to MHR acreage that's literally our neighbor.
Antero Miley 5-H hitting at 3223 boepd 64% liquids Noble County
Antero Sanford 1-H hitting 1311 Boepd 77% liquids West of MHR acreage in Noble County
I did my dd, that's accurate no fluff big wells being struck next door. MHR has moved Gabe Scott over to Eureka for evaluation purpose. Gary's expecting to hit bigger wells in the area. I encourage everyone on this board to review well strikes for Boepd in Noble and Monroe counties in location to our own land assets and leaseholds. Thanks for the insight Masayo to check out Oilmans posts he's correct on the Antero/Eclipse wells. It'll be exciting when they announce bigger Boepd, and I think thats the asset grabs Gary's been after. Thanks Masayo I was unaware. Post more Oilman so I don't miss your threads for my own evaluation.....thank you for your due diligence, i feel enlightened on Gary's Utica/Marcellus plays. I've played the short and long game, but with wells like that it's a dangerous game. I hold for the pullback to 4.05 and load up. Excellent research fellas and thanks for the correction on the Utica play.
Sentiment: Strong Buy
Driemolen- I enjoyed your post. You have to understand that most of the bashers on this board, shorting or long grow tiresome of misderection from management. I believe the O N G game is a hush hush entereprise until somebody hits a gusher, those who have the capital without the massive debt such as MHR can #$%$ up the prime acreage leaving the little guys scrambling.
Despite some of Mr. Evan's asset purchases, his return on dollar amount per acre is what makes this company such a thrill ride. Minus (BAYTEX) as of now.
I agree with you Bakken/Marcellus/Utica numbers will be Gary's focus with the objective to sell off the EF. He needs to let the market know he has the debt under control. Booradley mentioned in his reply to your thread that it's a buyers market in the EF and getting low balled on property with strong wells isn't something that Gary had in mind, not saying that with the rising price of WTI doesn't play into Gary's plan, but I think his prize property will lie in the acquired Utica acreage. Thus not forget a huge portion of the acreage picked up in Noble and Washington Counties were picked up around 2000 -3000 an acre if I read that correctly. GPOR paid well over that, and those wells ie,..Shugert H1 lies in the neighboring county hitting 7200 boe. GPOR has land in that rich wet window, just like MHR has acquired but at a much cheaper price.
Masayo - You mentioned the movement of the HQ finance officer Gabe Scott over to Eureka Hunter and I believe that was absolutely a strategic move for a possible sale. Or the board is just wanting him to tighten up the books ie. rigs placement, drilling, and frack costs, but they have a track record of lowered costs for operation when it comes to the roughneck work. I guess it's also possible that Gabe Scott just wanted a change of scenery, but I think its the latter and that''s my own personal opinion....non fact based....amigos, no slaughtering me please.
Gary for the most part is an intelligent asset acquiring machine who enjoys land grabs at cheap prices but without that Boe count, MHR's debt will always keep his ambitions in the red. I wouldn't be surprised if crude set over a hundred including the WTI price reaching its highs and he let the EF go for 550 and thats my negative side it deserves 650.
Upon completion of that, preffered share buy back and a major asset grab in the Utica play near GPOR and some JV Deals. But if he hits numbers like GPOR has recently, with the movement of Gabe Scott over to Eureka there could be a surprise coming down the shoot to those who have been patient but he won't sell the EF until he has the numbers locked in just for market compassion if anything, which right now, Gary has none.
Kep, Booradley, Masayo, Lexpress, SdFoster and Driemolens - I appreciate all of your posts regardless of your own investment choices short or long you bring more to the table on this board than most and I always enjoy reading all of your opinions so keep em coming and good luck to you all. Oh also on a down day....I don't mind the pure optimism of JohnSparta39 wherever the hell he went. Good post Mr. Driemolens.
the really big numbers are very gassy, with much of the liquids in the form of ethane and they generally have really long laterals, so i don't think of them as a good measuring stick. The Eclipse/Antero numbers that Oilman posted are really the good targets, as if MHR can meet or beat them in Noble County we will all profit...
I cannot for the life of me understand how these guys are offsetting EOG wells, less than 5 miles away, and producing less than 1/3 BOE than some of the EOG monsters in Gonzales County.
didnt gary at one time say he wouldn't be surprised to see 3000+ ip wells in gonzales?there haven't been any eye poppping wells in the ef from them...
however, that certainly isn't the norm for their wells. I don't think it is just by chance that EOG stopped leasing as the EF thinned, for the most part, they pretty much grabbed the best part of the Oil window. There are some presentations out there where you can see that the EF is 40-70 feet thick where MHR is drilling, while the EF is 60-100 ft thick where EOG has most of their wells. PVA is drilling similar IP as MHR, so I would say the geology is just slightly different and not something magical in how EOG is drilling their wells. The 3,000 BOE well is in Lavaca County/Gonalez border area, and thus has a little more gas to drive the rates, unfortunately most of the acreage is further northwest away from the border. Now that said, we would be fine without the Hunt deal, for what ever reason their wells stink (sorry for beating the dead horse on this one, lol).
I believe they missed the 18-18.5 k exit rate, as someone on the board said they had just hit that figure as of the share holders meeting, The 18-20k rate likely includes the three wells drilled last summer in the Marcellus and held until the plant was ready, but likely were not hooked up as expected. Likewise the 2.5 net jv wells with stone appear to still not be hooked in.
I believe they moved the finance guy from HQ up to "Eureka Hunter to prepare to selling that asset, but later than many here hope..
Regarding the Pearsall, they are just hoping others can prove it up, the current block is way to small, they would sell in a heart beat for $4k per acre...
It sure is nice to see a post containing a discussion regarding some relevant facts rather than the incessant rantings of SDfoster, Kep and Booradley going back and forth at each other. It seems there are very few meaningful posts on this board anymore. Heck, I offered some observations of my own the other day on the reserve report press release only to have SDFoster chastise me for being short, calling my comments garbage, and then calling me one of his pet names. It was only an hour or so later that the Jefferies Report came out echoing several of my comments and the share price went tumbling.
My hopes for the coming year involve two big balance sheet items. First, I would like for MHR to end 2013 with an average production rate at or near its 2012 exit rate after a sale of the EFS acreage. In other words, lose the 3500-4000 boepd you comment on, but replace that amount of production and (hopefully) more from other properties on an average production rate basis (a lot to ask, but if the Utica wells are half as wet as the GPOR wells, maybe this is possible). Second, I hope to see the Eureka pipleline actually get spun off and monetized in order to unlock its value as it seemingly gets ignored by most analysts and, with its expansion into Ohio, I am thinking it must have a residual value much higher than the $300m GE kept talking about after selling the 25% interest for $100m. In combination, these two developments would greatly reduce the perceived risk associated with the company and bump the PPS signficantly. GLTA, Lex
Hey Lex , it is good hearing from you again. Don't let you scare you by those scarecrows that are poluting this board. This board can sure use your very interesting insights , it is a relieve that good posts still can be found on this board.
I think that bakken will take over some lost production after they sell the EF. The expertise they acquired fracking in the EF will help them to improve their results in the Bakken.
I don't know where some of us got their information from concerning the Pearsall shale but this is what i found about Cabot oil and gas on this subject : First they sold a 35% non-producing stake from their net 50000 acreage covering Atascosa among others for about 14000 $ an acre to a Japonese Co. Keep in mind that they retain 100 % in their interests in the above EF play . I recall that MHR paid a sixt for his acrage .
On the 29th of October Cabot anounced drilling a horizontal well with short lateral producing 1400 boe/d containing a least 50% oil.
It is obvious that selling Eureka will be a good thing for the shareholders as the value is not reflected by any means in the current share price. Will it be sold as an entity to their partner or an third party or will they just split it as a separate entity and will the shareholders of MHR receive their share ? What ever the outcome will be , i believe that MHR will stay their privileged partner and still be able to profit of their infrastructure in the Utica to make some good JV deals in the future. Utica will be the next Eldorado for MHR , i guess that by the end of this year we will know if the future looks as bright as some believe it would , but the fact is that MHR and their management have a nose for the hot plays in the industry .
Good investment to all of you ,
In my discussion with IR, they are having trouble selling EF. He told me outright that it is a buyers market in the EF right now, and that all they have gotten are lowball offers. He claims the offer door is still open, and that he expects Evans will have a comment on EF within the next few weeks. IMO, the sale of all or a portion of EF is the key for this company in order to clean up an increasingly messy balance sheet and gain investor confidence.
I would love to hear Evans talk more about Eureka plans. For that matter, I would love to hear him lay out plans for the entire company going forward that would not include further acquisitions and dilution.