Everyone should listen to it - very nicely done. He mentioned selling the apartments. He did not mention the Moly mine. He said directly - "We are totally focused on oil and gas." Obviously if that is the case they should stop spending $3 a quarter on the mining project.
GDP is accepting EUR of 650k with 6000 foot laterals as highly economic. ECA seems intent on 8000 foot laterals and EUR over 800k. For now HK doing 6500 foot laterals but watching ECA results closely. Everyone sharing data freely. In fact HK owns small non-operated piece of the recent ECA wells.
1. Crescent moving fast on Torquay - from yesterday's presentation current production is 5500 boe/d with 51 Torquay wells planned for 2013.
2. LTS presents at 12:30 EST today. Hope they say something about Torquay potential on their Sask bakken lands. And maybe give an update on planned asset sales to improve balance sheet. Wouldn't take much to get the shares moving up.
Good point, 50% of HK capex going to development drilling in Baken where production growth is ramping, 40% of capex is going to El Halcon (Eagle Ford) drilling to get the acres held by production, with full development drilling to start later whenever they want to budget it. 10% of capex going to TMS. Maybe that is most exciting because of the huge scale. And the fact that the other two plays are ready for sale (Floyd's exit strategy) whereas the TMS is not.
I got yelled at for calling the Eagle Ford, the Eagleford. Just so it doesn't happen to you. They sure pronounce it like one word on all the calls. But Wikipedia is pretty clear about 2 words.
gilajake owns GDP and is nibbl;ing at HK. I own lots of HK (and ECA) and just started nibbling at GDP.
I listened to the presentation. It was very nicely presented by Charles. They might as well start calling the TMS Eagleford Far East. They gave a lot of new information on the play and to me the fact that the play is highly economic is not in doubt at this point. Can't wait for results from the next two wells, which are already drilled and are being completed now.
Meanwhile Bakken is better and better and the pad drilling at FBIR has been superb. IRR 100% on those pads. One pad came at line at over 20,000 barrels a day from 6 wells with IP's over 3000. That's why they have been drilling there all year and letting Williams County simmer (though they did go back there to drill a few wells with one rig). Williams Bakken wells have IRR 50%, why drill there unless you need to, when you can use the same rig to drill wells with IRR over 100%. Bakken production will continue to grow and their Bakken holdings are worth more and more with every left shifting of the type curves. EUR of 800 is too low for the FBIR bakken wells!! Who oculd have even imagined that 2 years ago? Floyd said at the last conference call said the performance of the Bakken team was "outrageously good", and it is.
And El Halcon in Eaglefor is just idling. It is all proved up. They have three rigs drilling to hold the acres. If the guys running it had their way, the would add 4 -5 rigs just to do higher return development drilling at the same time as they get their acres held with the three rigs currently drilling. They can grow El Halcom production any time they want to, but no need to do that right now. And they have had the capital discipline to do want they have to there, knowing they add capital and grow el halcon production any time they want to do that.
The whole story is pretty fantastic. Sale of HK can happen in 1-2 years, but doesn't have to. Value will continue to grow.
GDP, HK and ECA should all benefit ; they have biggest positions approaching 300k acres each. Sanchez also has important stake, though smaller.
Another possible contributor is the TMS. At Enercom in Denver, HK gave a presentation today and Goodrich yesterday. If you listen to both presentations (I did), it seems totally clear that the TMS is indeed ighly economic. You might as well start calling it Eagleford Far East. And HK and GDP and ECA have the biggest positons in the core of the play. TMS is one of the 5 (now 6) priority areas for ECA, but the goal for this year was to run two rigs, make sure it is economic, and set stage for more development next year once it fully earns its place among the cor eareas. It has.
I listened to the presentation. It was very nicely presented by Charles. They might as well start calling the TMS Eagleford East. They gave a lot of new information on the play and to me the fact that the play is highly economic is not in doubt at this point. Can't wait for the next two wells.
Meanwhile Bakken is better and better and the pad drilling at FBIR has been superb. IRR 100% on those pads. That's why they are drillign there and letting Williams County simmer though they did go back there to drill a few wells with one rig. Williams Bakken wells have IRR 50%, why get distracted there. Bakken will continue to grow and is worh more and more with every left shifting of the type curves. EUR of 800 is too low for the FBIR bakken wells!! Who oculd have even imagined that 2 years ago? Floyd said at the last conference call said the performance of the Bakken team was "outrageously good", and it is.
And El Halcon in Eaglefor is just idling. It is all proved up. They have three rigs drillign to hold the acres. If the guys running it had their way, the would add 4 -5 rigs just to do higher return development drilling. They can grow El Halcom production any time they want to, but no need to do that right now.
The whole story is pretty fantastic.Sale can happen in 1-2 years, but doesn't have to. Value will continue to grow.
Hope someone who reads the board is actually in Denver and give us some feedback from the breakout session. Feet on the ground never hurt!
They start at 3:55 EST, 5 minutes before market close. So whatever they say today will not impact share price action. And tomorrow is a different market day with different sentiment. Maybe they can say something about the Fassman, but it just says - completing - on their presentation.
Don't forget 50 percent of capex going to FBIR and 40 percent to El Halcon eagleford wells. Only 10 percent going to TMS. Next year TMS capital will be increased and that will fuel 2015 production growth. 2014 production growth is baked in from the other two key areas.
Blackstone well left with short lateral just under 3000 feet (only first 10/22 fracs could be produced, rest of well bore apparently lost. Still a good well considering, with IP greater than 700 bopd. Fassman Completed but not yet reported. SD Smith WOC.Geeeore Martin and Shuckrow drilling. 7 more wells planned for rest of 2014. Lots of details about TMS and complements great Goodrich presentation yesterday.
Meanwhile FBIR in Bakken continues to amaze. All recent wells significantly outperforming the new 801 EUR type curve. Those wells may be on a MILLLION barrel type curve!!!
You have really got me focused on what I think is the problem here. They are a small company with less than 40 million in revenues. No matter how good that business is, they simply cannot have a sideline consuming 4 million a year of their cash flow, returning ZERO, and starving the business and drawing away the attention and the cash it needs to grow. No business can be so good it can be saddled with that kind of an anchor and still perform well. It really wouldn't matter where they were spending $4 million a year with no return. For example a business with 40 million in revenues could not afford to spend $4 million a year on lottery tickets. It would destroy the primary business. And it would be even worse if getting those lottery tickets consumed half of the energy and talent of the business leaders. Then throw in that they have just awarded themselves another 500k shares, essentially reassigning 2% of the value of what I own to themselves. When they should be rewarded fpr growing the oil business so all the shares (theirs and mine) will show steady growth in value related to increased production and revenues.
Interesting post. USEG might be worth an investment as an early stage Moly mine. In that case the E and P operations are mainly a cash flow machine to help defray the up front costs of the mine without incurring debt.
However if you look at the E and P part as an independent investment, the Moly mine doesn't make sense. It costs 2 million for water treatment and another million or two in admin costs. How much money went to trying to get the VCUP before withdrawing it. Applications, meetings, filings, flights to Crested Butte, confidentiality agreements, stc. How did those hours help the E and P side? The profits on the E and P side should be going to grow the E and P business.. The management team paid for by the E and P operations should dedicate itself to growing the E and P business.
It means they won't be shedding $2 million in annual costs for water treatment anytime soon. What they have to do is sell the mine and the water treatment responsibility to a mining company (what a novel idea) and retain some royalties on future revenues generated by the mine once it is up and running. They need the cleanest separation that is possible. If the Larsons follow the mine and get an oil exec to run E and P side, so much the better!