The Chesapeake well will be turned on this summer and the Halcon well is already in production. The initial production rates are "encouraging, said EV Energy Partners president and CEO Mark Houser.
The two wells were backed financially by EnerVest Ltd.
Pittsburgh-based EQT Corp. intends to follow up its 2013 volatile oil well with an additional 21 wells to be drilled in 2014, he said. "This is certainly encouraging," he said.
His company will be working with EQT Corp. as it proceeds to drill in the oil window, he said. "We will closely monitor their activity and results and apply learnings to our own activity," he said.
EQT has drilled three wells with limited results in Ohio’s Guernsey County. But it intends to seek the oil with the 21 new wells in that county.
Houser’s company still wants to form a joint venture with another company to drill eight to 10 wells in the volatile oil window in Stark and Tuscarawas counties as pilot project.
Chesapeake, with whom EV Energy Partners has teamed up to drill in 10 counties in eastern Ohio, is also eying the oil window, Houser said.
That partnership that also involves the French company Total has drilled 371 wells in Carroll and surrounding counties. Another 180 wells are planned in 2014.
EV Energy Partners has about 81,000 acres in the volatile oil window. It has been busy on hydraulic fracturing studies and reservoir stimulus modeling as ways to boost oil production.
By Bob Downing Published: March 3, 2014
Drillers in Ohio’s Utica shale are increasingly interested in drilling in what’s been called the volatile oil window.
EV Energy Partners on Monday said it expects to participate financially in at least eight to 10 wells in the volatile oil window in 2014.
It says it intends to drill at least two volatile oil wells later this year, along with privately held EnerVest Ltd., its parent company.
Efforts to tap that oil in eastern Ohio have not been successful but new plans are being developed.
Most Ohio drilling has been to the east in an area generally called the wet gas window because drillers have been able to get natural gas, condensate or oil and natural gas liquids including ethane, butane and propane.
The volatile oil window covers all of parts of Portage, Stark, Trumbull, Tuscarawas, Holmes, Coshocton, Guernsey, Muskingum, Perry, Morgan, Athens, Vinton and Hocking counties.
Two of those volatile oil wells have been drilled with one already in production, said company executive chairman John Walker in a conference call with financial analysts.
One was drilled with Oklahoma-based Chesapeake Energy Corp. and the other with Texas-based Halcon Resources.
By Bob Downing Published: March 3, 2014
Texas-based Halcon Resources has suspended drilling operations in the Utica shale in eastern Ohio and western Pennsylvania.
The suspension was confirmed today in an email from the company.
Halcon Resources currently has no rigs running in the Utica shale, said spokesman Jordan Beadling in Houston.
He said the company currently has a well flowing back and a well resting, and it is waiting on results from these two wells.
"At this time, we do not plan to move in any rigs this year," he said.
The company has three producing wells in Trumbull County, where one additional wels has been drilled, one well is being drilled and three have been permitted.
In Mahoning County, it has one producing Utica well with two additional wells permitted.
It also has drilled Utica wells in western Pennsylvania in Mercer, Venango and Crawford counties.
It has leased about 139,000 acres in Ohio and Pennsylvania.
I hate to say it, but these guys cannot get out of their own way. 3 years ago they (and we) were speculating on whether the distribution would go up 50% or double. Now they are talking about being focused on getting the distribution over 1.0x. Looking at this afternoon;'s presentation, again they are flat on guidance unless they sell acreage. So again, frozen in place waiting for the big deal.
They also have a "differential" problem as all other Marcellus/Utica producers have. They don't get the NYMEX price you see on TV. They get less. If someone buys the acreage--they will too
yep-- I had been nimbly trading this for a few months-- saw the carnage going into earnings and took my money off the table. Got distracted by catching falling knives at COG and missed the bounce here. I'll ease back in, but definitely screwed d pooch on this latest trade
I sold 2/3 over the past week. Every E&P has been beat down bad whether they beat or miss. EVEP being in freeze off areas aren't likely to beat.
you make gains on the hedges if gas goes down. You lose money on the hedges if gas goes up. Hedges are insurance. You lose money on life insurance if you stay alive. You gain if you die. So don't have a problem with them losing money on insurance they turned out not to have needed. They went uninsured a few years ago and lost big selling gas into the market. These results are part of the long slog out of CHK's near death experience. They were telegraphed when CHK made the COS announcement. CHK will be punished today. Can't win for losing here. It will get better in time.
Also, weather related--Fracing. They don;t frac much in the arctic. Zero degree weather makes trucking water in dicfficult. Makes handling the water itself difficult. As for designing wells to maintain flow. True-- that's done far more in Pennsylvania than Texas obviously. But even against PA standards, this has been a rough winter. Do you spend the extra money and plan as if this winter is the norm? Or do you plan for a more "normal" winter. And regardless of how much you plan -- you are still sometimes at the mercy of your contractors and downstream customers.
Don't get me wrong-- I'm not here to make excuses for a huge miss, but Gas in the northeast that couldn't be given away in the fall was going for $100 for a few days this winter. There Obviously was a weather /infrastructure impact going on somewhere in the system.
It seems EVEP has been light on the roadshow circuit this year. I think they did 1 show so far this year? Reading between the lines can make you go blind (or broke) No shows because they are wrapping up a deal? No shows because they have nothing new to talk about? No shows because Walker and Houser are hard at work in the offices? No shows because it impacts Houser's job interview schedule?
I'm not going to speculate which it is. Just that they aren't getting out as much.
NGL's freeze preventing gas from flowing. They actually freeze at a fairly high temperature. Wells done on cold diggers are on the open artic tundra using arctic equipment, not wells in bubba's backyard using the same equipment used during a 90 degree summer. Weather in Ohio and Pennsylvania is seasonal. The arctic is what it is. Wells would cost a ton more if done like they do in the artic.
Are there any new Utica wells in Ohio that you could speak about? Any new well results?
No. We don't have any well results and it'll be likely mid-year before we start getting results from our revised completion program. So midyear at the earliest, I'm not sure we'll be talking about them mid-year. So I don't want to get your expectations up, but it'll be awhile before we even start to get results ourselves.
Okay. And so is the thinking of not releasing results that you kind of potentially have better results, and then you can lease up acreage. Is that the thinking?
Well, I think, yes, that's a big part of it. And we tend to like to make sure we understand the results before we start talking about them. So sometimes, that takes a little bit of time. So the biggest driver would be, if successful, if we unlock the code in that oily part of the Utica, we want to take advantage of that knowledge before we let everybody else know.
From their CC today.
"In our Ohio Utica play, we announced a 21 well program for 2014. The intent of this program is to see if we can crack the code in the condensate light oil window. While our first three wells were frankly, mediocre, we are encouraged enough by initial results to try very specific changes to our drilling and completion design intended to improve the economics materially. If we are successful, there is significant acreage available nearby at relatively inexpensive prices largely because of the skepticism about this part of the play.
As you know, we pride ourselves on being innovative, but we need to be confident that successful innovation creates a sufficient reward and the ability to expand our Utica opportunities that economically provides that. By year end, we hope to either demonstrate sufficient improvements in which case it would make sense to add acreage, or conclude that we cannot achieve the needed improvements at this time and discontinue drilling."
As of March their SEC filing said they had 270 investors and over 100 million in Assets. 100mil being the highest box--so they could have 101 mm or 20 Billion in assets. I would assume, though they are closer to 100mm. Also, Piper Jaffrey filed yesterday as owning 3.4 million shares.
22.05 was the default it returned for KMI. that's what I used
Without any growth, over time, KMI's idr deferrals to KMP will add to cash flow. Asset dropdowns to KMP will add to cash flow through increased distributions and idr's from KMP. Simplification of the corporate structure will be neutral, but will firm the unit prices for KMP and KMR making equity issuances more cost efficient. Equity issuances being the currency to pay for acquisitions. MLP's grow through organic growth or acquisitions KMP being the latter. We've grown in pipleines. Expanded into coal and domestic tankers. And then there is yield compression. KMI being the highest yielding GP. It's yield is secure and at 5%+ has room to compress. The current yield is 3% at $55. It is 4% with a $2.25 distribution at $55. A $2.25 KMI distribution 4 years from now is not unreasonable. KM will not be the same company it is now in 4 years. M&A and simplification of the corporate structure are a given. The oil and gas industry are in a rapid transformation right now. 4 years is a long time. Where were the KM's 4 years ago? $11 up (or down in a crisis) is not wholly unreasonable.
On the Chicago Board Options Exchange website they have a tool for pricing options. If you input days to expiration for KMI and the 40 strike, it returns a $3.20 fair value
If you go to the CBOE website, they have a tool for valuing options. If you input the days to expiration and strike as if it were an option, you get a fair value of $3.20