Term; Termination. Unless earlier terminated by mutual written agreement of EOC and the KKR Parties, the Participation Agreement will continue in full force and effect until the earlier of (a) the resolution of all outstanding EXCO Offers for the purchase of Approved Wells made within 6 years of the PA Closing, or (b) the resolution of all outstanding EXCO Offers for the purchase of the first 240 Approved Wells drilled on the Area 1 Assets. If a party is in breach of any of its obligations under the Participation Agreement and fails to remedy the default within 15 days following receipt of notice of such breach from the non-breaching party, the non-breaching party may in its sole discretion terminate the Participation Agreement.
From the Eagle Ford Participation Agreement (paragraph breaks and all caps added for clarity):
EXCO Offers and Buyback Right. After a group of Approved Wells drilled within a quarter has been on production for one year, EOC and the KKR Parties WILL MUTUALLY AGREE ON THE FAIR MARKET VALUE of such Approved Wells. EOC will be obligated to make an offer to purchase (an “EXCO Offer”) such group of Approved Wells.
IF THE FAIR MARKET VALUE OF SUCH GROUP OF APPROVED WELLS, IN THE AGGREGATE, EXCEEDS CERTAIN RETURN CRITERIA FOR SUCH GROUP OF APPROVED WELLS (THE “DRILLING RETURN”), THEN THE KKR PARTIES WILL BE OBLIGATED TO ACCEPT SUCH EXCO OFFER for the KKR Parties’ interest in and to such group of Approved Wells (subject to the right of the KKR Parties to retain up to 15% of their interest in and to each well included in the applicable EXCO Offer).
With respect to Approved Wells drilled during the first year of the development plan, if the fair market value of such group of Approved Wells exceeds the Drilling Return, the amount in excess of the Drilling Return will be shared equally between the KKR Parties on one hand and EOC on the other hand. IF THE FAIR MARKET VALUE OF SUCH GROUP OF APPROVED WELLS, IN THE AGGREGATE, DOES NOT EQUAL OR EXCEED THE DRILLING RETURN FOR SUCH GROUP OF APPROVED WELLS, THEN THE KKR PARTIES MAY, BUT ARE NOT OBLIGATED TO, ACCEPT SUCH EXCO OFFER.
In the event that EOC (a) fails to purchase a group of wells that the KKR Parties are obligated to sell, (b) falls below a certain percentage of ownership interest in the Area 1 Assets or (c) fails to provide the KKR Parties at least the Drilling Return on all wells drilled on the Area 1 Assets in the first year under the development plan, then the KKR Parties will no longer be obligated to accept EXCO Offers even if the fair market value for a group of wells included in an EXCO Offer exceeds the Drilling Return for such group of wells.
Hurricane season officially ends in November. However, the El Nino cycle predicted for this year (and possibly already emerging as evidenced by heavy rains in the Sonoran Desert) decreases storm activity in the Atlantic, Caribbean and Gulf of Mexico. It's likely over for 2014. Doesn't mean HERO's customers are ready to proceed.
Time is right when a bottom is confirmed by an advance (rather miss the uptick than sit on dead money). Your interest is flattering and your observation correct; did just get here, attracted by fleet buildup. Previously stuck to trading PDE and then ESV. Remember you, though, from EXM message board, if my recollection is correct (or did you ride GMR down?); your style has not changed. I opted for a new alias to reflect my trading objective, but my style probably also has not changed.
Your presumption happens to be correct. Do you not perform due diligence, including seeking others' input, before investing? I owned offshore drillers on the way up and have been following them all the way down. I will buy when the time is right. Why do you care? Why are you here?
Sept 24 (Reuters) - European refiners will enjoy only a brief period of improved margins before high product imports and weak demand will undermine profitability, industry experts say.
It's true that European refining margins have improved in recent weeks, with gasoline cracks performing particularly well at around $15-$16 a barrel.
But traders attributed this to unplanned outages at gasoline-making units, such as that at Valero's Pembroke plant in Wales, and planned maintenance at large, complex refineries, rather than any structural recovery in the gasoline market.
"European margins have improved since July, hitting their highest levels since Q4 2012," said Toril Bosoni, senior oil market analyst, refining, at the International Energy Agency, citing cheap crude feedstock as a factor.
"But this is probably short-lived as regional demand is still weak -- European demand was down 400,000 barrels per day year-on-year in Q2 2014."
Read the full article by pasting the topic title in a Google search.
Sept 23 (Reuters) - Valero Energy Corp is permanently shuttering the 38,000 bpd gasoline-producing fluidic catalytic cracking unit at its 125,000 bpd Meraux, Louisiana, refinery by mid-October, more than a year ahead of a regulator’s deadline, sources familiar with operations at the plant said on Tuesday.
A Valero spokesman declined to discuss operations at the refinery.
The FCCU and an alkylation unit that produces 7,300 bpd in octane-boosting additives for gasoline are expected to be mothballed by mid-October when a refinery overhaul that began in late July ends, the sources said.
Valero had agreed with the U.S. Environmental Protection Agency to permanently shut the FCCU by the end of 2015 to bring the refinery east of New Orleans into compliance with environmental rules.
The sources said Valero decided during the overhaul, which was originally projected to wrap up next week, to shut the FCCU as opposed to fixing it to keep it in operation into next year.
Read the full article by pasting the topic title in a Google search
The going rate for U.S. crude oil could tumble $30 below international benchmarks in the coming decades if U.S. policymakers don’t reverse a ban on exporting crude oil, according to a report by Wood Mackenzie.
The falling prices could be made worse by new drilling technology that may double recovery rates and add an additional 1.5M-3M bbl/day of new oil production - as much as 25% more oil than is expected today - the report says.
The report is not specific about the kinds of technologies that could draw more oil from the ground, but it cites companies such as EOG Resources (NYSE:EOG) that in the early phase of testing new methods now.
Have you reviewed CRR's investor presentations? All they talk about is the advantages of their products over sand. You can bet that's the same thing customers hear.
Crude -4.3M barrels vs. +0.4M expected, +3.7M last week.
Gasoline -0.4M barrels vs. -0.1M expected, -1.6M last week.
Distillates +0.8M barrels vs. +0.6M expected, +0.3M last week.
SDRL has a much newer fleet of jack-up rigs than HERO, so an acquisition would not make sense. The SDLP secondary probably is intended to allow SDRL to drop down rigs to SDLP so SDRL can pay for newbuilds on order.
You apparently don't know SDRL, which has a large fleet of jack-up rigs. RigZone's breakdown by rig type is too lengthy to post here, but anyone can look under Rig Data and see for themselves that you are in a state of denial.
The trend was ongoing before oil prices plunged. E&P companies are reducing exploration budgets at the same time the number of rigs available is increasing. This leads to lower day rates, which reduces driller cash flow and profitability. Here's supporting data from RigZone:
(Numbers are Current, Month Ago, 6 Months Ago and 1 Year Ago)
Rigs Working 614 635 611 621
Total Rigs 785 779 753 719
Utilization 78.2% 81.5% 81.1% 86.4%
That's not entirely accurate. A tax liability is incurred for MLP-type investments in an IRA if UBTI reported on K-1's exceeds $1k. The tax liability is based on the UBTI, not on distributions. Presumably, that's why dareacre bailed on the LLC, although an IRA investor typically would have to hold a significant position in MLP-type investments to exceed the $1k threshold.
Sept 23 (Reuters) - U.S. motorists drove more miles this summer than at any time since the 2008 financial crisis, according to government data, but the cause and implications of the roadway revival may be different than in years past.
The slow recovery in total miles driven may have more to do with a resurgence in vehicle sales due to zero- or low-interest loans than a long-term return to increased driving. But some experts suggested the data may be misleading, with trends like increased telecommuting and an aging population spending less time behind the wheel.
Americans' driving habits are a closely watched indicator for oil traders since U.S. gasoline use makes up about one-tenth of global oil demand, but consumption is still weak as fuel-economy standards rise faster than miles driven.
Motorists drove an estimated 266.8 billion miles on U.S. highways and roads in July, up 1.5 percent from the same month in the previous year, according to recent data from the Federal Highway Administration (FHA). The July figure is just shy of the 10-year high recorded in August 2007, before the Great Recession resulted in massive unemployment and forced consumers to scale back travel. Total miles typically peak in July and August for vacation travel.
From SA Breaking News last night:
"The near-term uncertainty due to operators increasingly experimenting with raw sand are worse than we previously expected and is creating price weakness for ceramics,” Sterne Agee wrote today as it downgraded CRR to Neutral from Buy and slashed its price target to $88 from $154.
DA Davidson cut shares to Underperform from Buy and lowered its target to $64 from $150, as the slower growth and negative impact on margins from pricing pressure on ceramics leads the firm to believe the stock may not command a premium multiple.
Howard Weil, in cutting its price target to $105 from $133, says it now appears that the increased white sand demand is creating more near-term displacement of CRR's product than simply one customer, and introducing pricing pressure into the ceramic market.