Natural gas rig count dropped to 613 after an increase last week.
Actually a pretty article was out earlier this week discussing the dire straights some c-corp E&P's have found themselves in regarding borrowing bases. As banks begin notching down the borrowing bases, companies are having to be more disciplined with capital and reduce rig count.
Look no futher than Constellation Energy Partners (CEP), a nearly bankrupt E&P MLP that has found itself struggling every 6 months to lower their borrowings to stay under the limit. The banks have cut the base every 6 months for the past 2 yrs or so.
CEP is pouring most of their cash flow into debt reduction.
I suspect we will see further decreases in rig count, perhaps as low as 500 rigs.
Are you sure Lisa?
HOUSTON, July 30, 2010 (GLOBE NEWSWIRE) -- Eagle Rock Energy Partners, L.P. (the "Partnership" or "Eagle Rock") (Nasdaq:EROC) announced today that it has completed the previously-announced acquisition of its general partner entities (the "GP Acquisition") from Eagle Rock Holdings, L.P. ("ERH"). As consideration for the GP Acquisition, Eagle Rock issued 1,000,000 common units to ERH and cancelled the 844,551 general partner units outstanding.
You might be interested to know that Jack has dumped his PER and moved into EROC.
Despite the fact that it has a GP with IDRs.
The GP is also the GP of MEMP which Jack bashed a while back on the basis of its GP and IDRs, CoI, etc.
As usual with Jack, it's do as I say not do as I do.
He sold the minerals portion of Eagle Rock for a pittance to BlackRock so he could keep his job.
Putting the higher risk, higher return then worthless subordinated management and crony buddy units to the front of the bus was just as bad. In fact with the recovery of oil and ngl prices this ended up diverting far more value from the common investors.
However, I would not make a point of some ones physical attributes when all that does matter is the personal choice of defect of character. It distract from the only element which counts.
Oh, so now you want to analyze the Hugoton deal?
Why don't you do the math for us on this one?
Use hedge values and assume $2/mcf production costs. Then decide Linn's cost of capital and show us.
The Hugoton deal is accretive by my calcs, quite accretive. What isn't seen is how it dillutes the GW.
Yea that is very productive behavior.
BP Hugoton Acquisition
Liquids-rich production of ~110 MMcfe/d
•37% NGLs / 63% natural gas
Potential for production optimization and cost savings
•~500 identified recompletion opportunities in the Chase formation
100% ownership of Jayhawk Gas Plant with processing capacity of 450 MMcf/d
Constructed in 1998
Significant excess capacity; currently 41% utilized
It appears a bit dated given all the brand new capacity added. But it is handling ngls and has direct piping to EPD central.
Did you ask Clay about possible deep pools of oil in the Hugoton? What did he say? ;-)