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Linn Energy, LLC (LINE) Message Board

  • lizahuang54321 lizahuang54321 Jan 3, 2013 11:04 AM Flag

    QRE acquiring Jay field

    "This acquisition allows the partnership to own a world class oil field with significant remaining reserves, a low decline and a long reserve life. We expect the high liquids content and premium Louisiana Light Sweet crude oil pricing to deliver high margins and significant accretion to our unitholders."

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    • Any info on the type or quality of the oil or the oil field?

      what quantity the field produced so far,
      what quantity of oil might still be left there,
      how long it is producing,

      percentage of gas without EOR production,
      out of the ground is the oil sour or sweet oil,

      does it need to be refined first to get the mentioned light sweet price?

      .....and who now owns the refinery that was the Exxon refinery there?

      • 2 Replies to sandonthebeach47
      • To follow up on my earlier response, they won't need to do anything to the oil to sell on an LLS index price if the crude oil purchase agreement has quality deducts for sulfur. However, another option is that they could engage in some blending activities (more likely their marketer would do the blending) to bring the sulfur content down and meet the LLS spec. No refining necessary, nor would the products produced after refining meet the LLS spec anyway. The two real options are blending or sulfur deducts.

      • google is a useful tool, you should try it someday.
        Jay has been producing since 1970. As big as Prudhoe Bay, it has accounted for three quarters of the oil ever produced in Florida. You can find newspaper articles from 30 years ago talking about production from Jay being on the decline. But as we know they keep being able to extract more and more oil from those old fields. And that is what MLPs do - take the mature fields and go out and produce with no exploration risk. All accretive and hedged, this should drive meaningful distribution growth at QRE and it further increases their oil:gas ratio which was already oil heavy.

        Again, for answers to your questions about the Jay field, try google. Lots of info readily available.

    • Currently under tertiary recovery with nitrogen and water injection
      Potential for Lower Smackover horizontal drilling
      100% liquids content provides strong margins; further enhanced by LLS pricing premium
      (~$2/bbl higher than WTI)
      Shallow decline with low-risk development to maintain production

      • 1 Reply to rlp2451
      • The wrinkle there is that LLS is currently correlated with Brent (even with a small premium to Brent - is that what you meant? It's much higher than WTI). However with the pipes being built from Permain Basin to Houston and Gulf Coast, it's possible that LLS decouples from Brent and trades more in line with WTIC. Rather than bringing Permian up to Gulf Coast prices, the result might be for Gulf Coast to decouple from world prices.
        google this article title to read about it:
        "After the Flood – Gulf Coast Light Sweet Crude Pricing Beyond 2013"

    • I wonder if QRE did this willingly or if Quantum made them do it?

    • The best thing is to jump on a coiled spring for liftoff... or get your gnads busted.

    • Did you leave out some interesting point(s)?

      Who did they buy it from?

      Where is it?

      But, this part does sound good:
      "Louisiana Light Sweet crude oil"

      "HOUSTON, TX--(Marketwire - Jan 2, 2013) - QR Energy, LP ("QRE" or "QR Energy") ( NYSE : QRE ) announced today that it has acquired $145 million of oil properties located in the Jay field in the Florida Gulf Coast area from its sponsor, Quantum Resources Fund. The transaction closed on December 28, 2012 and was financed with cash on hand and borrowings under its bank credit facility."

      How exciting.

 
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