Those who are negative/doubtful on California roip
still repeating potential and technology will continue to offer more opportunities to grow california proved reserves (do not book much undeveloped)
"(California)..a lot of oil in place, over 1 billion barrels of oil in place under the leases that BreitBurn holds in Southern California. And a significant amount of that crew developed, almost a 100%, we don’t book a lot of undeveloped reserves in California. Yet each year, we drill anywhere from 3 to 20 wells and each year we add reserves. We expect to be able to continue to do that in the current price environment for the foreseeable future.
As I mentioned, we have about 20 million barrels of proved reserves against a resource base, north of one billion barrels. So a significant business for us, a high profit, high margin business for us and one that we hope to continue to grow, as we have historically."
"We believe in technology. We believe the technology allows us to get more oil out of the ground; witness steam flooding in California in the 60s, 70s and 80s, horizontal drilling in many of the unconventional basins in the last decade"
yes lisa the same plays. in fact one of royt big assets is a reversonary interest back from bbep to royt expected in april 2012
see this post for refresher on reversion
Re: BAC says buy BBEP , target $23 . 6-Mar-12 02:57 pm everyone needs to remember when royt ipo's sometime in April/May or so it will be because the revisonary interest in two of the California propterties reverts back to spec/royt. (has been in bbep 10-K since 2007 acquisiiton by bbep/psec). As I understand it is already in bbeps 2012 dcf forecast and again should not be material overall to bbep but based on psec S-1 is material to royt . See both below
From bbep 2012 10-K
"On January 6, 2012, Pacific Coast Oil Trust (the "Trust"), which was formed by PCEC, filed a registration statement on Form S-1 with the SEC in connection with an initial public offering (the "Trust Offering") by the Trust. Immediately prior to the closing of the Trust Offering, PCEC intends to convey net profits interests in its oil and natural gas production from certain of its properties to the Trust in exchange for Trust units. PCEC's assets consist primarily of producing and non-producing crude oil reserves located in Santa Barbara, Los Angeles and Orange Counties in California, including certain interests in the East Coyote and Sawtelle Fields. PCEC operates the Sawtelle and East Coyote Fields for the benefit of itself and the Partnership. The Partnership currently owns the non-operated interests in the East Coyote and Sawtelle Fields and pays an operating fee to PCEC. The annual operating fee in 2011 was $0.9 million. PCEC currently holds an average working interest of approximately 5.0% in the East Coyote and Sawtelle Fields. PCEC holds a reversionary interest in both of these fields, and its average working interest will increase to approximately 37.6% once certain payment milestones are achieved, which is currently expected to occur in the second quarter of 2012. The Partnership has no direct or indirect ownership interest in PCEC or the Trust."
"A delay in the East Coyote and Sawtelle Reversion will result in lower distributions to unitholders than those projected, which would continue until the reversion occurs.
The projected cash distributions to trust unitholders and the reserve reports each assume that PCEC’s working interests in the East Coyote and Sawtelle properties will increase in April 2012. PCEC currently holds an average working interest of approximately 5.0% in the East Coyote and Sawtelle properties. PCEC holds a reversionary interest in both of these fields, and its average working interest will increase to approximately 37.6% once certain payment milestones are achieved, which PCEC expects to occur in April 2012. At this time, PCEC’s share of production from its East Coyote and Sawtelle properties is 23 and 41 Boe/d, respectively, and would increase to 186 and 152 Boe/d, respectively, following the East Coyote and Sawtelle Reversion. Delays in the timing of the East Coyote and Sawtelle Reversion could be caused by, among other things, production issues and decreases in the price of oil and natural gas, and hence the timing of the reversion is beyond PCEC’s control."