dg you are receiving all of the thumbs down because either: you do not understand their revenue structure ie fixed fees, hedged prices, etc., or you do not want to know, or you do know and are posting dis information
Using 1985-1986 oil price crash, when SA defended production similar to 2014 as a possible analogous event; there would be a second oil price bottom below first bottom by another 5% or so in 1st quarter of 2015. Oil price would not turn sustainably upward until a W. Wide oil production downturn can be easily seen as a predictable trend. If 1985/1986 is analogous, oil price would recover at least 2/3, but not all, of its post 2014/2015 loss over the succeeding 2 years after start of crises. In the 1985/1986 crises it took over 10 years for the entire loss in oil price to recover with stable to slightly up trending consumption in first approx 20 years, but oil production profile is a different than 1985/1986 so the post 2014/2015 oi price response may look different than post 1985/1986, but there must be a conclusive view that production is on the downtrend. ps it took nearly 29 years for U.S. oil production to return to its 1985/1986 crises level once downturn started and was only made possible by shale
suggest they have several moving targets at this point attempting to coalesce around a single go forward strategy, so why a delay in distribution announcement; with moving targets such as trying to re work their capital/drilling program with various resulting production profiles from the merged qre assets, they maybe working with their lenders on what ifs or on some type of an equity infusion such as a pik or a Permian JV all of which take extra time over the holidays when everyone is out of the office so to speak, etc. etc
"I believe that the management has likely had a plan for this current scenario for years. "
jrad I would say yes they have looked at options, but no they did not have a more firm plan in place in this event, particularly with the qre merger in transition
From my experience most emergency event plans for E&P's are a low economic case business plan which are "options" oriented reactions rather than any one firm reaction, which they eluded to in their last presentation when they touched on capital latitude with the qre merger. I was Americas strategic planning manager for one of the 3 majors and we had short term and longer term low case business plans (as well as base and high case plans) with sensitivity to each case type i.e. for bbep one risk they may have planned for in low case is California shutting off drilling, or a major earthquake, etc. Obviously in their low case one of their sensitivities would have been a low oil price but I have some doubts it was over a 50% price reduction. I worked through several real emergency reactions from mid 1980 thru late 1990's and when it actually happens, because each case again is options oriented, companies rework everything when it really happens, then coalesce around a final go forward reaction, ie you basically re work you entire capital and drilling plans within your financial/debt structure. Again with qre merger, the elevated debt load, commitment to qre for a $2.08 distribution, etc. everything was/is very fluid for bbep requiring, I would surmise, a total re work (and working a merciless number of hours) on an entire new business plan in this low price event with new even lower prices sensitivities and some high price sensitivities; plus they would be working hand in hand with lenders on debt options, legal counsel on distribution commitment, etc, etc to finalize a go forward plan/reaction before announcing a distribution.
thanks for kind words rl. the operators in some drilling programs may see better returns than the program investors, as the program investors is some drilling programs get loaded up with non capped overhead, etc. This is different than in JV's among oil companies as their are caps on overhead, etc, plus program investors may be at a determinant if production not hedged or there is capital inefficiency or the drilling program was in fringe parts of the reservoirs they wanted to test which may happen if operators reserve the best part of the plays for their own fully exposed drilling; but 3 to 4% is not bad either with risk that was taken on by the program investors if there had been a number of dry holes if they drilled in the fringe areas
ake thanks or response, but my further question is why will it filter into the wet gas is SW PA and Ohio when there is so much dry gas available in eastern PA and eastern Ohio and lng plants are not generally designed for wet gas c3+ extraction? There a number of lng plants going into gulf but not being harmful to wet gas in gc. I can see no need form ethane to gc but not lighter c3+ hydrocarbons in processing plant in NE
ake sorry but I reviewed their proposal and and environmental presentations as chrx said the project is only to liquify mostly methane and export liquidated natural gas and some off takes such as ng and electricity will be used at the facility
"The project will enable Dominion to transport up to 860,000 dekatherms per day of natural gas form existing pipeline interconnects near the west end of the Cove Point Pipeline to the Cove Point terminal for the export of up to 5.75 metric tons of liquefied natural gas per year. The Commission found that the proposal, as mitigated with 79 conditions found in Appendix B of today’s order, is in the public interest."
and it looks like the headers will be from dry gas lines
"...FERC also authorized the installation of additional compression at Dominion’s existing Pleasant Valley Compressor Station and upgrades of related facilities located in Fairfax and Loudon counties, Virginia, to accommodate the delivery of gas to the LNG terminal...."
RIL in shipping pact with Japan firm to import ethane
PTI December 25, 2014
First Published: 15:36 IST(25/12/2014) | Last Updated: 15:40 IST(25/12/2014)
Reliance Industries said Thursday it has signed a long-term agreement with Japan's biggest shipping company Mitsui OSK Lines for transportation of liquefied ethane from North America to India.
Mitsui will manage six very large ethane carriers (ships) that the Indian conglomerate is building at Samsung Heavy Industries. It will supervise the construction of 87,000 cubic meter ships and upon vessel delivery, manage the ships.
"Reliance, with this strategic tie-up with Mitsui, has achieved a key milestone for the successful implementation of Ethane import project to feed crackers in India," the company said in a statement.
Mitsui, in a separate statement, said the very large ethane carriers (VLECs), being built by Samsung, are expected to be delivered in the last quarter of 2016.
Neither of the companies disclosed the value of the deal.
Ethane, a natural gas component, is expected to be produced in large volumes in North America due to the shale gas revolution, which has generated an abundance of liquefied natural gas (LNG) and cooking gas LPG.
Ethane is primarily used as a petrochemical feedstock to produce ethylene by steam cracking.
RIL plans to ship 1.5 million tonnes a year of ethane from its US shale joint ventures to its chemical complex in Gujarat.
The firm has two joint ventures in Pennsylvania's Marcellus Shale - one with Chevron, in which it has invested $1.7 billion, and another with Houston-based Carrizo Oil & Gas, in which it has invested $392 million.
It has a third JV, in which it invested $1.5 billion, in Texas' Eagle Ford Shale with Dallas-based Pioneer Natural Resources... Part 1
"...The impact on Reliance Industries
Shipping ethane to India is part of RIL’s plans to attain long term feedstock competitiveness. Reliance Industries invested heavily in shale gas in North America plans to import ethane that has become the dominant feedstock for crackers, replacing liquids.
The transportation will double RIL’s ethylene production capacity to 3.3 mt a year. Reliance Industries is looking to source about 1.5 mt per year of ethane from US. It entered into agreements to long haul US-produced ethane to feed its cracker at the Jamnagar refining plant in Gujarat.
Reliance, with this strategic tie-up with MOL, has achieved a key milestone for the successful implementation of Ethane import project to feed crackers in India. The Mukesh Ambani flagship is also building a world-scale receiving and storage facility in India for liquefied ethane and pipeline to deliver ethane to its crackers."
I would speculate the biggest impact could be on a PA and or WV cracker (both negative) and the KMI/MWE line to GC (possibly good or bad)
Daily GPI from NGI
India’s Reliance Secures Shipping Partner For U.S. Ethane Transport
December 30, 2014
India's Reliance Industries Ltd. has reached an agreement with Japan's Mitsui OSK Lines to transport U.S. ethane overseas, following up on a previously announced plan to secure more feedstock for its expanding crackers in India (see Daily GPI, Aug. 21).
In August, Reliance said it would take advantage of the U.S. shale boom by expanding its crackers and sourcing up to 1.5 million metric tons of ethane per year through its joint ventures with operators in the Marcellus Shale of Pennsylvania and the Eagle Ford Shale of South Texas, where it has partnerships with Chevron Corp., Carrizo Oil & Gas Inc. and Pioneer Natural Resources Co.
Under an agreement announced last week with Mitsui OSK, the shipping company will oversee the construction of six enormous ethane-carrying ships that will be built by Samsung Heavy Industries Co. Ltd. The deal’s terms were not disclosed.
Once the vessels are completed, which is expected to occur in 2016, Mitsui will ship ethane produced in the U.S. from an unnamed terminal in North America to a receiving and storage facility Reliance is constructing in India.
ny Reliance's India cracker plant is good size-shell total US MEG in 2014 was around 690 KTA expanding to 1.3 mkta in 2017 and China is around 400 KTA in 2014
RIL has India's largest EO / EG Plant with an installed MEG Capacity of 300 KTA (300,000 tons annual) and Pure EO Capacity of 56 KTA.
"tech" you did not "read" everything. they have access to approx $30 mm credit line
"As of September 30, 2014, the remaining outstanding principal balance of the Second Amended Platinum Note was approximately $3.2 million, with $31.8 million still contractually available under the credit facility."
"...Two test wells have already been drilled: one in Lawrence County, and another in Putnam County, West Virginia..."
"...ABARTA Energy posted an exclamation point-laden blog post talking about the Rogersville Shale.
“ABARTA is currently working on a potential new shale play in Kentucky called the Rogersville shale. This is a brand new shale that has never produced commercial gas, but information from some old deep test wells indicate potential for vast reserves at great depths. The Rogersville shale is even older and deeper than the Marcellus or Utica shales and is Cambrian age (+500 million years). This makes the potential shale play extremely risky and expensive, but the rewards could also be extreme! The Rogersville shale play is located in a deep, narrow sub basin in eastern Kentucky called the Rome Trough. Drilling depths will likely be about 2 miles deep!...”
"...Landowners in several Eastern Kentucky counties have reported being approached by companies wanting to buy their mineral rights. On an online message board last month, a Lawrence County landowner reported interactions with Chesapeake Energy, who he said offered him $200 per acre for his mineral rights, along with a 12.5 percent royalty on the oil and gas produced from beneath his land...."
A little deeper and a little more expensive than the Utica and Marcellus. This is in addition to the shallower huron/brea play in Kentucky-Central WV they already sit on and process for. If this one eventually proves out also, MWE will still going to be growing in the NE for 20 plus years