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Oasis Petroleum Inc. Message Board

samhill3 11 posts  |  Last Activity: Apr 24, 2015 11:45 AM Member since: Aug 14, 2013
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  • Reply to

    3400 plus wells now on Fracklog

    by winallin12 Apr 23, 2015 3:37 PM
    samhill3 samhill3 Apr 24, 2015 11:45 AM Flag

    The idea that most of this backlog might suddenly come into production is way off base. Most of the backlog is a natural backlog caused by ever-larger pad drilling which in turn is a major factor behind falling drill costs per well.

    The backlog is not 3,400+. As of February 2015 it was in fact about 4,750. Most of the existing backlog will be replaced by new wells going into the natural backlog numbers.

    To get an insight into how much is the natural backlog and how much is the intentional delayed wells look no further than comparing against the backlog of September 2014 i.e. before the oil price collapsed. At that time the total backlog was 3,150. That implies about 1,600, give or take a couple hundred, which could be termed intentionally delayed completions i.e. about 33% of the total backlog inventory. It can be argued that all of the intentionally delayed completions - the 1,600 approx - can come back into production before too long, say within 12 months of spudding. That should be worth as much as 250 Mboe/d of production if all of the delayed wells came back. However, this is worst case scenario. Most probably additional new wells will be delayed thus sliding the inventory bump forward indefinitely or until oil prices are higher in 2-3 years time. The real production bump in late 2015 is therefore likely to be something like 100-150 Mboed.

    Demand: Latest projections are that demand in 2015 will pick up by 1.0 to 1.5 million b/day and by a like amount in 2016. Yes, It would be better for producers if there was no expected production bump from the backlog. However, big picture when comparing against the solid uptick in global demand, it's not something that will derail the recovery.

    Beware of swallowing everything in the public press. Fear sells newspapers, it always has and it always will. The media is not in the business of disseminating facts, they are in the business of selling advertising to eyeballs. Read them with care.

  • Reply to

    3400 plus wells now on Fracklog

    by winallin12 Apr 23, 2015 3:37 PM
    samhill3 samhill3 Apr 24, 2015 8:41 AM Flag

    Of course it's deliberate, as I said. Most is a natural phenomenon due to the extended waiting time arising out of large pad drilling and a small portion is due to some drillers deliberately preserving cash by awaiting higher oil prices before they complete the wells. The savings available from larger pad drilling sequences going forward will guarantee that the number of drilled but not completed wells will remain high. Beware of scare mongering headlines and articles suggesting that this backlog represents a mighty tsunami of production that is suddenly about to be released onto the market. It's exactly that; scaremongering nonsense.

  • Reply to

    3400 plus wells now on Fracklog

    by winallin12 Apr 23, 2015 3:37 PM
    samhill3 samhill3 Apr 24, 2015 5:12 AM Flag

    Who cares buddy. Most of these arise simply because of the move towards larger pad drilling in order to drive down drilling costs per well. Larger pads = larger inventory, simple logic. Going forward, there will always be a large inventory of drilled but not completed wells for this same reason. This sort of thing might make a headline for a day or two but, ultimately, this is meaningless for anyone who has a basic understanding of the shale drilling business.

  • samhill3 samhill3 Mar 13, 2015 5:37 PM Flag

    You can sell after hours, the shares were officially halted but trading resumed after hours today. I sold at $39.50 a/hours, bought at $35 earlier today. Thanks.

  • Reply to

    the bump around 1:30 PM to $35.99 due to

    by rajmungara Mar 5, 2015 4:05 PM
    samhill3 samhill3 Mar 6, 2015 1:48 AM Flag

    The funding window is open. LPI and others are selling secured notes to raise funds and in the last couple of days we have OAS and AR do equity offerings.

    We all know that WLL has a liquidity problem and that it needs to raise cash by selling new shares. With the talk of oil prices plunging again soon because of the developing storage problem you won't see WLL wait much longer before it sells shares, it's too risky to wait.

    The window is open, keep your eyes peeled.

  • Reply to

    the bump around 1:30 PM to $35.99 due to

    by rajmungara Mar 5, 2015 4:05 PM
    samhill3 samhill3 Mar 5, 2015 4:31 PM Flag

    Making losses, too much debt and storage tanks will be full in April. Good luck waiting for a bid.

  • Reply to

    Good conf call

    by samhill3 Feb 26, 2015 12:13 PM
    samhill3 samhill3 Feb 27, 2015 7:01 AM Flag

    The analysts published estimates for 2015 and 2016 are too low. Take a look at the company's guidance, read over the conference call notes about their progress with costs and production efficiency gains, and then run some basic numbers for yourself. With Whiting well on the way to having the company PROFITABLE AT CURRENT OIL PRICES it goes without saying that they will be highly profitable when oil drifts higher. You don't need me to tell you that oil will be higher in the next couple of years.

    Successful investment is about looking forward whilst comparing back against the current market valuation. If you do that with Whiting, on a forward basis the stock is already very attractive. Give it a week or two for the analysts estimates to catch up with where the company is, investors will be pleasantly surprised.

    Key: Watch the Yahoo estimates get positive revisions, it's already begun overnight.

  • samhill3 by samhill3 Feb 26, 2015 12:13 PM Flag

    WLL taking a lot of positive steps to make the company profitable at current oil prices. The cost savings already being achieved are much better than the analysts on the call had expected. These same cost savings will greatly boost the company's liquidity during 2015. The view towards year 2016 was very positive; WLL confident of solid profits in 2016 even at current oil pricing and any improvement in the oil price over the next year will be icing on the cake. In general Whiting is already way ahead of analysts expectations in terms of profitability and liquidity. It's a virtual certainty that there will be analyst upgrades following this earnings report and conference call.

  • Reply to

    Why hedge 2015, 2016 and 2017 in the low $50s?

    by samhill3 Feb 26, 2015 1:41 AM
    samhill3 samhill3 Feb 26, 2015 8:09 AM Flag

    These new hedges inhibit the company's cash flow. They prevent the company from getting the benefit of improvements in the oil price. The whole purpose of hedge programs is that they even-out cash flows over the long term; they cap the upside during good times and they protect against the downside in bad times. Unfortunately, these new low $50s hedges by WLL do the complete opposite - these hedges lock in low oil prices. They're suppose to protect cash flows AGAINST low oil prices, not lock in the effects of low oil prices into the cash flows. These low $50s hedges are utter foolishness.

  • Reply to

    Why hedge 2015, 2016 and 2017 in the low $50s?

    by samhill3 Feb 26, 2015 1:41 AM
    samhill3 samhill3 Feb 26, 2015 6:46 AM Flag

    These hedges are WTI versus the hedge contract regardless of whatever average price WLL may actually get for their oil. So, the company makes gains or losses on these hedges against WTI in the low $50s. Again, it's completely one-toothed #$%$ crazy to lock the company into these low $50s hedges. They simply prevent the company from getting the benefit of recovering oil prices in 2015 and 2016 and 2017. We've taken the pain - so why now prevent us from getting the benefit of higher oil prices going forward. Madness, madness, madness.

  • Am baffled as to why the company has gone and hedged a sizable portion of production for 2015 and 2016 and 2017 in the low $50s. In 2014 they did a bunch of hedges that contained a sub-floor that effectively made their existing hedges useless. And now they've gone and locked in hedges at these low WTI prices in the low $50s. This is madness on steroids.

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