Woodford results? all in all it doesn't make sense but run up to earnings is always filled with gamblers
The most intriguing well of the report is the Marmaton well in Kansas. Vertical production of 300+boe/d 30 day average with potential for horizontal drilling. Woodford will not produce oil in a vertical well like that. Will be interesting to hear if its a blanket play or location specific.
Marmaton is shallower than the Miss so it will likely cost less to drill and complete. Obviously its extremely early in appraisal but those results and a Marmaton play would be preferable to the Woodford if its widespread. Woodford and all shale plays are always tough to crack.
Also Kay County well in the Miss. 1000+ boe/d on the east side of the play. Always hearing about how the Nemaha Ridge is a prolific area.
I have seen a few maps of the Woodford trend and it appears to cover most of central oklahoma as opposed to northern. However i am with you that it is early in the game and it seems likely that SD has or is in the process of acquiring at least a piece of the Woodford at a good price. I can see them buying out a smaller operators position very early at a fair price and having a good shot at great position. 20,000 acres at a cost of $500/acre would be a total of 10 million dollar aquisition, or the cost of a few Miss wells.
SD owns acreage that may be too far north. Maturity of the shale is critical and Devon and Continental may have positions down in the basin as opposed to the shelf.
MSF1man - you are seeing ESP vs gas lift and comparing the two?
ESP may or may not yet be deployed when the well is IP'ed. sometimes the well flows naturally for a sustained amount of time.
What time frame in the well life are you seeing this increased decline?
Good input bogwa. Remember that wells may be holding up longer with the deployment of ESP. That is something that could be giving sd greater confidence in the production guidance. A well may look unimpressive on IP say at 125 bopd, but an ESP might move 100 bopd for a year.
I think you pretty much covered it. I am not seeing any real change from the average as far as well IP goes.
Type curve likely will still get a revision upwards, but by how much depends on flattening and also new IP.
The gas hedges help a bit. While I agree sometimes the wells aren't nearly as oily on a % basis they can sometimes be quite large on a BOE basis. Some of the wells are in the 3-4 mmcf/d range but only have 50 bopd. We need some outstanding news on Woodford and the GOM.
this will not end well for Obama. He is the president and is responsible as the leader of all citizens. Ted Cruz is taking your boys to the woodshed and this means senate in 2014
I think SD probably has leases that hold all depths. They would have already lost rights to the middle miss and lower miss and they wouldn't be talking about woodford being prospective over 100,000+ acres. I could be wrong and if u guys know Oklahoma better then i stand corrected. Don't think they will drill woodford wells in the trusts as they are low risk concepts and drilling wildcat woodford wells is probably out of the question.
its not correct. i saw several other stocks who printed the exact same issue. the number of the daily gained $/share was the exact number on the pull back
In the presentation today Bennett mentioned that total industry wells in the Woodford in the nearby area is 60+
That is a very good sample size that SD can leverage. Finally someone else can do the science for a change.
not sure how they are fracking those wells yet but assume well costs will be closer to $5-6 million per well. The fracks are probably much more expensive as they will require more sand and more fluids. Those costs will come down over time but early on in the shale play its usually high side. Depending on clay sensitivities the drilling fluids may need to be oil based which adds to well costs.
Most shales don't have free water contained in the rock matrix... its usually bound into the matrix. So the obscene water cut of the Miss won't be replicated in the Woodford most likely.
SD will need to understand the maturity profile of the Woodford (they likely do by now) by inexpensive geochemical methods and figure out if the formation is deep enough to provide pressure to produce it.
Its great that Devon is doing the lead work on this bc it will be that much easier for SD if it works. I would expect the economics of the Woodford to be similar to the Miss (50% IRR) but probably with high EUR per well. I think management said 400,000 some odd acres are prospective for Woodford which lets, even if its only 100,000 acres, would be a home run.
I'm hoping the Woodford dwarfs the Miss. Woodford should produce far less water than the Miss but shales usually require more expensive fracs. Still the production variance is smaller in shale plays and more predictable.
i think a sample size of 50 wells or so is big enough. will check all wells at the end of the quarter again.
remember the stock move may be related to Woodford at this point.
nobody really understands the asset value right now as its in flux with the Woodford and Middle Miss being tested. Some early results suggest upside and we don't know what kind of EUR and what well costs look like in Woodford. We don't even know how much of the acreage is prospective.
I think that Repsol is the only potential buyer at this point. My bet is that management continues to develop this thing and the stock price should be back to $10 over the next 12 months or so. Nat gas prices have bottomed and the middle east oil risk premium isn't going anywhere. Good q3 report and some updates on the Woodford delineation will help us to the $7-8 range.
Come Feb 2014 the type curve revisions will hopefully get us back to $10.
The production of the company will have exceeded 2011 levels and the potential will have exceeded 2011 at that point. The price was 12 back then. It will be interesting to hear if management believes well costs can be reduced more say to 2.5 million/well