I enjoy learning wide and far and appreciate there is usually a 10,000 hr rule for expert command to be developed. I try to look where experts fail. In the case of the Grant Canyon field in Nevada--a Holy Grail--experts almost universally overlooked the 300 acre lease which has produced >19,000,000 bbl of oil, or it would have been tapped long before it was. The mighty Wizard of Oz hid behind a curtain and was not a wizard. Do conceptional headwater algorithms for oil and gas exploration boil down to tea leaves and bluster?
Pioneer Natural Resources Reports Second Quarter 2014 Financial and Operating Results
...narrowing annual production growth forecast from continuing operations from a range of 14% to 19% to a range of 16% to 19% (upper end of the range) based on better-than-expected production growth in the first half of 2014 and being on target to nearly double the number of horizontal wells placed on production in the Spraberry/Wolfcamp area from 68 wells in the first half of 2014 to 125 wells in the second half;
- continuing to forecast 2014 drilling capital of $3.0 billion;
- expecting compound annual production growth from continuing operations of 16% to 21% for 2014 to 2016 and to more than double production by 2018 as compared to 2013;...
...The Companys initial Wolfcamp D interval well in Upton County (University 3-19 #31H) was placed on production in the second quarter, with a peak initial 24-hour production rate of 2,103 barrels oil equivalent per day and 68% oil content. The lateral length of this well was 9,927 feet. Three additional Wolfcamp D interval wells are planned in the second half of the year. The average drilling and completion cost for the 2014 program in the joint venture area is expected to be approximately $8.0 million per well...
Pioneer Natural to sell Hugoton, Barnett shale assets to Linn Energy, others
Pioneer Natural Resources (NYSE:PXD) agrees to sell its Hugoton and Barnett Shale assets for ~$495M, part of its move to focus on its oil-related Spraberry/Wolfcamp assets in the Permian Basin in west Texas....
Thanks to the shared science among the oil industry, Pioneer's tide could lift all the boats. I guess it mostly depends on the old adage "location, location, location".
Not meant to understate the brilliance among the ground gurus!
Pioneer Natural Resources' (PXD) CEO Scott Sheffield on Q2 2014 Results - Earnings Call Transcript
...Of interest is the fact we drilled our first Wolfcamp D well. You'll see it here in the map, it's basically down in Upton County near the Reagan County line. And this well came in at about 2,100 barrels a day, and so that extends to the prospectivity well into the South. And importantly, we have 3 more wells that are planned in the second half of this year that we need to watch to see if they compare well to this last well. If they do, that means we've got a lot of running room with the D in the South....
...I think that the Wolfcamp A has significant potential. Wolfcamp D has already shown quite a few excellent results. So I think those, we would say, they're well -- at least well defined...
Occidental Petroleum Is Heading In The Right Direction
...Its Permian basin offers strong oil growth opportunities and the company is expecting to grow annual production from this basin by over 20%. Oxy is spending more than 20% of its capital budget on Permian to accelerate production...
http://seekingalpha.com/article/2388255-occidental-petroleum-is-heading-in-the-right-direction
Devon Energy's (DVN) CEO John Richels on Q2 2014 Results - Earnings Call Transcript
The Laredo Conference Call is on the telephone. The number is 1 888 286 8010 and the pass word number is 20677420. Lot of discussion to be had especially from the Q&A. Highlights for me would be-
At this point Laredo only drills vertical wells to hold acreage or comply with continuous drilling commitments
Possible to have two HZ wellbores in the middle wolfcamp
Reserves will be a surprise for those who want to listen.
Some things over my head, but Rockman would get it.
Bottom line southern Glasscock and Reagan will have years of activity from Laredo alone. Stock hammered go figure.
Here is Laredo presentation. Haven't looked at their info in several months - some nice data on the various formations plus older slides that have been out there for a while.
Very surprised that they have pulled back their drilling efforts - investors / stockholders sure have noticed based on market response.
Could be prime for a takeover / buy out. RSP Permian, Diamondback, Athlon, Aubrey's new company all are possible suitors IMO.
2618-Laredocorporatepresentationaugust2014.pdf (3.34 MB)Here is the conference call transcript from Seeking Alpha site.
Hope it can be opened.
I haven't gotten into it yet to see what was discussed.
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Perhaps Laredo is pulling back some to further de-risk the area and use vertical to improve science? We just saw a conference call from a company basically suggesting that path. With the increased glut due to the refinery fire, prices might not go to much above $100 WTI for a bit.
Prices being what they are, even with the chaos across the world (Israeli Gazan strife, Iraq insurgency possibly threatening southern oil fields, Russian-Ukraine tensions) really suggest either that the US oil contribution is far more massive than expected. That or the economies world wide are tepid at best.
The question is, when will reality set in on K Street?
Page 7 does not show LPI's Sterling and Howard county acreage to be in the hz or multi-zone horizontal areas.
Page 8 lists %EUR recovered in three years for Wolfcamp U/M/L and Cline. I can't remember information like this being shared by other companies.
Rock Man said:
Here is Laredo presentation. Haven't looked at their info in several months - some nice data on the various formations plus older slides that have been out there for a while.
Very surprised that they have pulled back their drilling efforts - investors / stockholders sure have noticed based on market response.
Could be prime for a takeover / buy out. RSP Permian, Diamondback, Athlon, Aubrey's new company all are possible suitors IMO.
I found these comments from Laredo exciting. It seems if they are further along the path of utilizing the multiple zones.
...In the second quarter, Laredo made meaningful progress on our plan to tradition -- to transition into the efficient full-scale development of our Permian-Garden City asset and enhance our ability to realize the value from the more than 1.6 million barrels oil equivalent of resource potential that we identified to date from the initial 4 horizontal zones. A critical component of our plan is proving our ability drill stacked laterals and complete them simultaneously to maximize drilling completion and operating efficiencies and minimize future frac impact as this vast resource becomes more and more developed. We confirm many aspects to our plan during the second quarter, including the drilling and simultaneous completion of a our first 4-stacked laterals pad, and approximately 80% of our second quarter activity was associated with multi-well pads....
...15 of the wells were drilled as stacked laterals on 5 multi-well pads. One of these was our first 4-stacked lateral targeting the Upper, Middle and Lower Wolfcamp and Cline zones, which produced a total 30-day average IP rate of 2,653 barrel oil equivalent per day. As we completed our first 2 extended long laterals targeting the Upper Wolfcamp and Cline zones, these wells were drilled as 2-stacked laterals, with the Upper Wolfcamp and Cline zones producing 30-day average IP rates of 1,155 barrel oil equivalent per day and 1,463 barrel oil equivalent per day, respectively....
....Additionally, since the beginning of the second quarter, we have added or committed to the acquisition of more than 9,700 net acres, approximately 7,700 which will bolt on to our existing acreage or increases our working interest in existing leasehold....
More goodies from Laredo
...Wells drilled as stacked and adjacent laterals continue to perform well, with the 16 Wolfcamp wells performing in line with our type curve on a BOE per day per 1,000 foot and the 3 Cline wells, all above expectation at an average of 121% above-average type curve on a BOE per day per 1,000 foot...
...This year, we are rapidly transitioning into full development of our significant resources through pad drilling in the 3 Wolfcamp zones and Cline formation....
I hope the Seeking Alpha transcripts have the Q&A on them, that's where the meat is imo. Maybe I'm not interpreting right; I don't see them pulling back just behind schedule. The production corridors with 10000 ft. laterals for example.
I am surrounded on three sides by Laredo and have 4 rigs drilling vertical at this very minute. I have been disappointed that I have no Cline or HZ. Now I realize this vertical drilling is study and fooling around to hold leases. I have posted before Exxon and Chevron both own minerals; one can only imagine what their lease or farm out looks like. The real show hasn't even started yet imo.
Like Rockman I think someone is going to buy Laredo. If not what a great company. Also I was going to post last week about Energen. Their Glasscock leases are between Apache and Laredo. I thought their president was playing aw shucks good ole boy while holding a flush because he doesn't want to be bought out. I have questions later about Energen and their perf and plug back strategy.
j richard...My family owns royalty interest in Laredo wells. We just received a production lease agreement from them; they intend to begin HZ drilling in one of the sections in which we have interest. We're pretty excited about this development, which came just on the heels of this recent conference and presentation. I guess from our little corner of the room, it looks like they're slowing unfolding their plan as articulated. We'd rather they proceed slowly and carefully than cause damage by moving too quickly. Do you mind me asking what county you are in?
I agree John, you do not want to be one of the early leases to be drilled. In the case of a new play being first is definitely not best. Let them figure it out on someone else. The landmen won't like this next comment but the best way to keep them from learning on you is to not lease early.
In Texas, this might only work if one owned a controlling mineral interest in the survey/section. I don't think a 1/8 interest hold-out can stop the other 7/8ths from leasing and drilling. The 1/8th owner is then presented with participating or non-participating in the well. Most 1/8th owners aren't going to be able to pony up a million dollars to participate in a hz well, and, from what I understand, non-participating interest [if I am using the term correctly] starts to receive proceeds only after the well is paid off. There is also a risk that a company might be hot on an area and lease up lots of land only to have interest cool after poorly performing early wells alter the original plans. In this case, the drill timing mineral owner of your example misses out on the bonus and any royalties which might have been made from a sub-economic well, e.g., a 100,000 BOE EUR horizontal well which cost $8 million to drill wouldn't make money for the operator under current market conditions but would net the mineral owner his fraction of the royalty [1/8 of 25% of 80,000 BO = 2500bo x $90.00/bl = $225,000]. If any of my assumptions/assertions above are off, please come back with corrections.
Craig Wascom said:
I agree John, you do not want to be one of the early leases to be drilled. In the case of a new play being first is definitely not best. Let them figure it out on someone else. The landmen won't like this next comment but the best way to keep them from learning on you is to not lease early.
John, which county do you hold royalties in?
Glasscock. What county are you in? I think you will like Laredo, I was once a royalty owner of theirs in the Anadarko basin.
John Allen said:
j richard...My family owns royalty interest in Laredo wells. We just received a production lease agreement from them; they intend to begin HZ drilling in one of the sections in which we have interest. We're pretty excited about this development, which came just on the heels of this recent conference and presentation. I guess from our little corner of the room, it looks like they're slowing unfolding their plan as articulated. We'd rather they proceed slowly and carefully than cause damage by moving too quickly. Do you mind me asking what county you are in?