SA is ridiculous, and should be ignored. I have never read an article that was ahead of the curve. Not sure which is worse, SA or Motley Fool. Anyone who wants exposure to infrastructure of one of the world's great oil and gas plays should buy Markwest and forget about it for 5 to 10 years. The Marcellus is changing the flow of hydrocarbons in this country.
Below is from the q call, as I understand it, they don't case and frac the wells that maybe look substandard. I believe he mentioned in the last pres that it saves $1.5 million per well, out of a potential $3mm per well, that's significant. Think it was 18 wells, that would have less volumes but the economics for the wells were improved, would haver reduced the average He did mention the effect on prod but wasn't specific if I remember correctly. Believe SD said the same thing about their completions, guess it's neg for volumes but improves returns, at least that's the hypothetical result. Still the variability of the Miss Lime is an issue.
Yeah, I didn’t talk a lot about it and I guess I’m somewhat love to get too carried away because this is a pretty early experiment. I will tell you, we feel pretty good about what we’re seeing and I think what it’s pointing to is we don’t understand everything we’d like to understand about the Mississippian in general. So this is going to help us quite a bit in getting our arms around some of the technical details. Ultimately, the way we kind of see this is there will be some wells that we could kind of look at and say, I wouldn’t want to waste a fracture stimulation on a well that’s already making pick a number 5,000 barrels water and 50 barrels of oil. So that’s the way we kind of started looking at this as we have some areas that produces high gas cuts and higher water cuts and perhaps the way to make those look better economically is not spend the money on fracture
stimulation, because we don’t know that it’s actually improving the overall takes on those.
He didn't mention anything in the pres last week, so assume no effect, did mention the open hole completions had an effect on production volumes, think it was 18 wells. Haven't heard of other producer mentioning OK issues, the Permian did.
That is a factor. The Exxon guy I talked to mentioned he had heard of cos dismantling foreign plants to move them to the US, haven't heard that it but has to have an impact. Have heard that in the so Tx with the EF boom, hard to find qualified operators/technicians. I am very bullish right now, trying to not get carried away because who knows if this plays out. But the potential could be great for the country.
cbd, you probably have already looked at Noble's pres today, but they lead with the Niobrara/Wattenberg. Incredible resource, the returns for normal hz wells in the 70% range, go to 170% for the extended laterals. Noble sees mid 20% per yr increases in prod from the play for next five years. Doesn't hurt to have one of the best operators in the sector leading the way. Anadarko says it is there best asset and they have some of the best operations globally.
Should help, we don't have refining capacity for more light sweet crude in the short run. Not sure why we wouldn't allow export, we didn't want Canadian crude. Our policies don't make sense to me. It will take care of itself over time but the diff of WTI to Brent could continue. We will continue to back out imports if we increase prod a million + bs /yr for the next few years. This is a bigger story than social media or Apple products imo.
Thinking about the Nobel announcement today, why would you invest in DNR increasing prod 8% per year when you can buy NBL, increasing prod 18% per year for the next 5 years. Still think DNR execs may be coasting. Talked to an exec with Exxon, talking about the DNR assets they traded for in the Bakken, they are very happy with the result. DNR needs to revisit their strategy again.
Saw a comment on the growth of US/NA production, the rate of growth over the past two years is the greatest since 1940. Virtually all of the world growth outside of Opec is No America. Said it before but what's going on in energy is as big as the digital revolution. This story should be on the front page continually, and not the dangers of fracking or the demonization of the Canadian oil sands. Contrary to what DC does/say, the energy revolution just might give us a global advantage. Noble Energy out with 5 yr projections, they will increase prod 18% /yr for 5 years, and they are a big co. And they lead with the Niobrara and Marcellus.
Williams up 5% on this I guess, wonder what they want the co to do. Seems management has been fairly shareholder friendly. Not sure what they could do except sell out.
Williams Cos. (NYSE: WMB) 2.6% HIGHER; In a 13D filing hedge funds Corvex Management LP and Sorban Capital formed group, together disclosing a 8.82%, or 60,305,766 share, stake in the company. They seek talks with management and the board.
Canada will find a market for their oil.
Kinder Morgan Canada said it submitted the application for approval to the National Energy Board in hopes of starting construction in late 2015 on the $5.4 billion Trans Mountain expansion project. Completion is expected by late 2017.
The company first announced the project in 2012 and filed a project description with the NEB in May of this year. It would boost the capacity of the existing pipeline to 890,000 barrels from 300,000 barrels a day.
This seems amazing to me, in a year, the forecast has been boosted by 2 mm bs/year three years earlier. Could this be understated also. Not sure forecasts to 2040 are very useful if you're that far off in a year. Energy has the potential to change the course of our economy for the better.
Domestic output will grow annually by 0.8 million barrels a day to 9.5 million in 2016, nearing the record level
of 1970, according to the U.S. Energy Information Administration’s Annual Energy Outlook for 2014. Natural gas production will grow 56 percent to 37.6 trillion cubic feet by 2040, boosting liquefied natural gas exports to 3.5 trillion, EIA said today.
The report “shows that advanced technologies for crude oil and natural gas production are continuing to increase domestic supply and reshape the U.S. energy economy, as well as expand the potential for natural gas exports,” EIA Administrator Adam Sieminski said in a statement.
The EIA last year forecast production would rise to 7.5 million barrels a day in 2019 before gradually declining to 6.1 million in 2040. U.S. output reached an all-time high 9.6 million in 1970.
I bought some KMI warrants, a right to buy KMI at $40 in early 17. Selling for around $3.50 now, have been as high as $6.50, a leveraged bet on KMI, don't think there is much downside. KMI, current div $1.64, 4% yield, $41 stock. Probably tax loss selling.
Market is indicating the Kinder cos will not have premium growth in the future. Not sure that is the case. Just based on yield, should be mid $40s in '15. Seems a good, if not great, value at $32.
That's probably why it's weak.
Again on DNR as a yield play. Looked again at KMI, probably the gold standard for energy infrastructure. They will pay $1.86 in '15, at 4%, $47 stock price, selling for
You might want to look at PDCE also, looked at them as a comparison to BCEI. Almost the same size, also Niobrara exposure. You get the Niobrara and you get the Utica. Both could have about the same ramp up in production over the next couple of years. CS sees PDCE at $83 NAV and BCEI at $53, 50% and 25% gains. I still like BCEI better because it looks like they won't have to borrow money through '15, PDCE will be leveraging but the Utica could be a big deal. I don't know much about the play but it is just developing. They could do 27boe'd next year and 36boe/d in '15, from 20k this year, where BCEI could do 25k and 35K. PDCE might have a higher multiple at that point with the Utica ramping up, or not. Interesing that on analyst had both at $550 mm ebitda in '15. At that level, BCEI is $70 with a 6x multiple, 8x would get you $97, seems that would be the range. Many think the Utica will be top tier play also. I think they have more risk, execution and leverage than BCEI but the returns could be better depending on the Utica results. They did get clobbered this week with a less than expected vol forecast for next year, but CS calls them the best small co value, ahead of BCEI, not sure I agree but could be. The did call BCEI the best execution. That's what makes a market.
You got it, listen to Jack Bogle of Vanguard, with managed funds, you get the market return less fees and churning expenses. I don't think it is very hard to beat the funds/market if you just focus on the value of companies and don't trade a bunch. I assume now when I buy a new co that I will rarely buy it at the low and expect to buy it at lower prices. Probably a lot of folks bought DNR with the idea of a boost from the new yield strategy and run to $20+ and were disappointed. Plus most of the e and p s have sold off, most have had a good year, investors protecting gains, or taking losses. E and P investors tend to be traders. Seems a lot were buying DNR in the $18s waiting for the analyst meeting. I do think the e and p s will do better after the first of the year but a lot will depend on the oil price, I think it's ok but don't know, could move below $90 for a while. The funds are just as fickle as individual traders, focusing on the stock price vs the value. Seems DNR at $15 is a good value, whether it is the best value in the sector, not sure about that, and definitely don't think it is not a great yield play, at 4% and 60 cent div, it should be selling for $15, that's about where we are. And you get 4% plus 8% growth, 12% returns, that probably beats the market in general. If you bill yourself as a yield play, then that's what investors will value you at. 25 cents on $16 is 1.6%. And you won't get 50 cents until next year. DNR doesn't have the allure of a growthy oil co. But most traders want 10% in a week or a month. That's a much more difficult endeavor. If you want an oil investment with a reasonable return, low risk, DNR is a good bet now. And it could be a could trade back to $18 to $20 again. I don't think we will get an indication of long term values until Jan 1. I don't expect DNR will move much for while.
MS had vol forecast at 35k boed/d in '15. And they just borrowed at 6.75% for 8 years. Borrowing is not going to be an issue, and definitely equity dilution is not a concern. And they have Anadarko and Noble leading the way as well as SWN in the Brown dense. Not sure there is a better positioned small co in terms of funding the growth.
Thanks to you for pointing to it. MPO and BCEI could do 60% more vol next year, but different balance sheets and oiliness. I did buy more AREX but have to rethink that, maybe figure out how to buy BCEI. I did get my AREX avg down to the $20 range. A good exercise would be to look at other small e and p s and their projected growth for '14.
Found the CS projection, they had '14 at around 24k, 54% increase. Seems 60% is a good target. If you just use that to project the stock price, it's almost $70 vs $43 now. MPO will have to get to $9 to match that, think it can, but all you would have to be concerned with is BCEI execution and commodity price, debt is taken out of the equation. I think BCEI is safer bet, maybe with less upside.
cbd, did a quick extrapolation based on what they project to spend next year and came up with 25kboe/d avg, compared to 16k this year, almost 60%. A very rough cal of $485mm for ebitda, at 8x, $80+ stock value, or $140k EV/kboe/d, 30k end of '14, $90+ per share. Found an old MS report that projected 26k avg next year, and ebitda of $461mm. Is old but in the ball park. And at the time they saw 35k in '15. Not sure that BCEI isn't a better bet than MPO, they don't have the liquidity issues and are more oily. They just did another $200 mm debt, seems they are set for the year. Based on q3, they are selling for 6x ebitda, way too cheap for that kind of growth.