Gasfrac's Fracturing Process Gets Coveted Chevron Endorsement [View article]
Craig,
This is not a charity endorsement, as a matter of fact your second paragraph pretty much answers the first one; the fact it took them that long to vet and test the technology before endorsing it, should give further credence to that endorsement.
As for the stock price, I don't believe the price reflects the significant progress the company experienced over the last 12 months; if it did, it wouldn't be an attractive investment at those levels.
Furthermore, choosing to focus on the 12 months performance is quite disingenuous and arbitrary, if we were to look at share price performance since their IPO in August 2010, the stock is up 35%, one gets the sense that there is something right with the company or the process.
Equal Energy: An Unparalleled Opportunity [View article]
Yes Steve, Don is very conservative, their Mississippian basically hold the same potential as the core SD Mississippian play, but unlike SD he is not "hyping it", this means once they start producing from their joint venture, there will be room for an upside surprise.
In my talks with the CFO they mentioned that they were expecting a deal in Q1, Don confirmed it today, by saying that a deal will be signed in March, I believe the stock could run to the $6-$7 range once a deal is signed for the Mississippian. A reason for the pop is not just their Mississippian exposure, but the entirety of their asset base in undervalued, a deal could finally shade some light on the company.
Equal Energy: An Unparalleled Opportunity [View article]
For those still following Equal, the company CEO just gave a presentation at the Enercom Oil Conference in San Francisco, you may listen to the webcast here:
- Viking locations could go as high as 250 (current published 150, which was already up from 90 in late 2011) - Hunton high locations count is 60 (current published 40) - Hunton still yielding 22% to 38% IRR at current strip pricing (NG, oil, NGL) - Mississippian deal (farm out) announcement expected next month
Halliburton Stands To Profit By Addressing Environmental Concerns [View article]
One way to deal with the environmental concerns is waterless fracking; Gasfrac has done over a 1000 fracs with gelled propane, no water is used, no waste water is produced (no need for injection wells), reduced Co2 emissions, reduced truck traffic (from 1000 per well to 30), and on top of that LPG fracking has been demonstrated to enhance well reserves and productivity. I expect Gasfrac to be acquired by one of the larger oil service companies in the next 24 months.
Gasfrac Energy: New Evidence Of Superior Production Results [View article]
I would like to make a correction, in my original article I highlighted that Chevron/Hal own the LPG patent; HAL is actually not involved with patent at all; it is only Chevron.
Gasfrac Energy: New Evidence Of Superior Production Results [View article]
Thank you Holt, I am glad my short article has been of value; I do believe over the next couple of years the shareholders of Gasfrac will be handsomely rewarded.
Gasfrac Energy Services: Fracturing Game Changer [View article]
Hi red,
1. How do you know the costs are lower long-term? From what did you make that deduction?
The costs are lower longer term because you get more oil and gas production from LPG fracking over the life of the well; hence your return on the investment is much higher; check the graph in the following article:
It clearly shows higher cumulative production for an LPG fracked against an offset well; I also demonstrate that in subsequent articles; however it is important to mention that superior production has been confirmed in a number of basins, but not all basins according to my information.
2. Would it be possible for other companies to use gas rather than water in the fracking process? Perhaps they could use some clever process that gets around the patents.
Yes, it is possible other companies may choose to use a similar technology; this actually would be a plus for Gasfrac, since it will fully validate their technology; as well as, render the company a probable take over target for larger oil and gas service companies that don't have a access to LPG fracking. as a result of its first mover status, Gasfrac has a tremendous experience, know how and intellectual capital that can not be easily replicated.
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
Gasfrac has not deployed its propane capture unit as of yet; however larger producers don't need the recovery unit since they usually have their own gas planets; there is no indication whatsoever that Gasfrac is having an issue with large producers; this assertion is pure fantasy.
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
CO2 foam fracs are 55% more expensive than water fracs; while LPG fracs are 20% more expensive inclusive of propane recovery; further more foam fracs have been around for 30 years; LPG fracking has been introduced only 4 years; yet it is taking market share; this confirms that LPG is superior in certain basins. Finally foam fracs still use water; which is an issue for some formations.
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
I believe the technology works best in the following formations:
- Water sensitive (usually presence of clay). - Tight shale (low permeability). - Low pressure
Also the technology is naturally advantageous in arid regions without out enough access to enough water for fracking; or within areas that have very difficult environmental regulations such as expensive toxic water treatment.
The company claims that the technology is superior in all formations, some competitors like Trican highlight that it is superior in certain formations, but not all.
To my knowledge the technology has not been deployed in the Bakkan.
Investing In The Mississippi Lime - Is It The 'New Bakken'? [View article]
Equal Energy (EQU) has 20000 acres exposure to the Mississippian (right at the core of the play), the company is getting very close to signing a deal to monetize that acreage; trading at half NAV.
Gasfrac: Superior Production Results [View article]
It is true lower NG prices have hit the fracking sector; even though in the case of Gasfrac virtually all of their business is tied to NG liquids and crude fracking; specifically their business is currently focused on liquids in water sensitive reservoirs, low pressure or depleted reservoirs where water fracking is not compatible or not as effective; this specialized feature of LPG fracking and the lack of competition for it, should support their pricing and margins, should the industry takes a downturn.
Gasfrac: Superior Production Results [View article]
The LPG gel has been developed by Chevron/Halliburton (HAL) in collaboration with Mr.Robert Lestz, Gasfrac’s CTO who was working with Chevron at the time. Chevron awarded Gasfrac an exclusive licence to use the LPG gel in Canada and a general licence to use the gel in the US. The company eventually developed its own methods to gel propane.
However, gelling the gas is only the first step in the process, using the gel in a fracking operation is a whole different ball game.
Gasfrac has developed its own nitrogen closed looped system in order to be able to use the gelled propane safely in a gas or oil well fracking operation. The company also developed the process of injecting the propane with Proppant (sand). Gasfrac also developed a host of automated safeguards and remotely operated modules to undertake LPG fracking from a distance (to minimize risks).
The company has submitted over 17 patent applications relating to the gel and the fracture stimulation process; ten patents have been issued and seven are outstanding.
Gasfrac: Superior Production Results [View article]
If I may add a further comment Craig, I think while we analyze Gasfrac LPG frack results; it is always important to keep in mind the environmental benefits associated with the technology; meaning even if in certain reservoirs the technology is equivalent to water based fracking in terms of production results; it will still have an edge in terms of lack of waste fluid; reduced flaring & CO2 emissions; reduced truck traffic (900+ per water frac, 30 for LPG). Also in certain areas enough fresh water maybe lacking to undertake water fracking. Mexico shale development has been mentioned as being hampered due to lack of water, and likewise for South Africa, The Middle East, Australia, parts of China and even areas in the United States.
I wanted to make the above point, in order for the discussion not to be framed only in terms of superior production; but the other superior features of technology needs to be included in the discussion; of course those other superior features come at a higher price; thus in the end an operator may choose to ignore them unless environmental regulation is strengthened or water access is clearly lacking.
Gasfrac: Superior Production Results [View article]
You are absolutely right Craig, I very much appreciate your even handed analysis of the company and the objective approach you have chosen in appraising Gasfrac and it is technology.
I do fully agree with you, we should not extrapolate from this document alone; but the company and it is engineers are privy to much more information than we do; based on all the research I have done, I am quite confident that Gasfrac has encountered similar results in alternative reservoirs; but unfortunately and as I stated earlier most of their clients are not keen on SPE submissions.
Having said that, it is certain that LPG fracking results will vary from reservoir to another and there is a fair chance that they wont be superior in every formation; I have been unable as of yet to quantify the addressable market for the number of reservoirs and formations where LPG fracking will prove to be superior; but preliminary indications signal that the opportunity is substantial, the deep basin in Alberta and Colorado shale are examples where LPG fracking appears to be very promising.
Gasfrac's Fracturing Process Gets Coveted Chevron Endorsement [View article]
This is not a charity endorsement, as a matter of fact your second paragraph pretty much answers the first one; the fact it took them that long to vet and test the technology before endorsing it, should give further credence to that endorsement.
As for the stock price, I don't believe the price reflects the significant progress the company experienced over the last 12 months; if it did, it wouldn't be an attractive investment at those levels.
Furthermore, choosing to focus on the 12 months performance is quite disingenuous and arbitrary, if we were to look at share price performance since their IPO in August 2010, the stock is up 35%, one gets the sense that there is something right with the company or the process.
Regards,
Nawar
Equal Energy: An Unparalleled Opportunity [View article]
In my talks with the CFO they mentioned that they were expecting a deal in Q1, Don confirmed it today, by saying that a deal will be signed in March, I believe the stock could run to the $6-$7 range once a deal is signed for the Mississippian. A reason for the pop is not just their Mississippian exposure, but the entirety of their asset base in undervalued, a deal could finally shade some light on the company.
Regards,
Nawar
Equal Energy: An Unparalleled Opportunity [View article]
http://bit.ly/xc5QTi
couple of highlights from the presentation:
- Viking locations could go as high as 250 (current published 150, which was already up from 90 in late 2011)
- Hunton high locations count is 60 (current published 40)
- Hunton still yielding 22% to 38% IRR at current strip pricing (NG, oil, NGL)
- Mississippian deal (farm out) announcement expected next month
Regards,
Nawar
Halliburton Stands To Profit By Addressing Environmental Concerns [View article]
Regards,
Nawar
Gasfrac Energy: New Evidence Of Superior Production Results [View article]
Regards,
Nawar
Gasfrac Energy: New Evidence Of Superior Production Results [View article]
Regards,
Nawar
Gasfrac Energy Services: Fracturing Game Changer [View article]
1. How do you know the costs are lower long-term? From what did you make that deduction?
The costs are lower longer term because you get more oil and gas production from LPG fracking over the life of the well; hence your return on the investment is much higher; check the graph in the following article:
http://bit.ly/yIWKAm
It clearly shows higher cumulative production for an LPG fracked against an offset well; I also demonstrate that in subsequent articles; however it is important to mention that superior production has been confirmed in a number of basins, but not all basins according to my information.
2. Would it be possible for other companies to use gas rather than water in the fracking process? Perhaps they could use some clever process that gets around the patents.
Yes, it is possible other companies may choose to use a similar technology; this actually would be a plus for Gasfrac, since it will fully validate their technology; as well as, render the company a probable take over target for larger oil and gas service companies that don't have a access to LPG fracking. as a result of its first mover status, Gasfrac has a tremendous experience, know how and intellectual capital that can not be easily replicated.
Regards,
Nawar
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
Regards,
Nawar
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
Regards,
Nawar
Gasfrac Energy: Unlocking New Hydrocarbon Liquid Basins [View article]
- Water sensitive (usually presence of clay).
- Tight shale (low permeability).
- Low pressure
Also the technology is naturally advantageous in arid regions without out enough access to enough water for fracking; or within areas that have very difficult environmental regulations such as expensive toxic water treatment.
The company claims that the technology is superior in all formations, some competitors like Trican highlight that it is superior in certain formations, but not all.
To my knowledge the technology has not been deployed in the Bakkan.
Regards,
Nawar
Investing In The Mississippi Lime - Is It The 'New Bakken'? [View article]
Regards,
Nawar
Gasfrac: Superior Production Results [View article]
Regards,
Nawar
Gasfrac: Superior Production Results [View article]
However, gelling the gas is only the first step in the process, using the gel in a fracking operation is a whole different ball game.
Gasfrac has developed its own nitrogen closed looped system in order to be able to use the gelled propane safely in a gas or oil well fracking operation. The company also developed the process of injecting the propane with Proppant (sand). Gasfrac also developed a host of automated safeguards and remotely operated modules to undertake LPG fracking from a distance (to minimize risks).
The company has submitted over 17 patent applications relating to the gel and the fracture stimulation process; ten patents have been issued and seven are outstanding.
Regards,
Nawar
Gasfrac: Superior Production Results [View article]
I wanted to make the above point, in order for the discussion not to be framed only in terms of superior production; but the other superior features of technology needs to be included in the discussion; of course those other superior features come at a higher price; thus in the end an operator may choose to ignore them unless environmental regulation is strengthened or water access is clearly lacking.
Regards,
Nawar
Gasfrac: Superior Production Results [View article]
I do fully agree with you, we should not extrapolate from this document alone; but the company and it is engineers are privy to much more information than we do; based on all the research I have done, I am quite confident that Gasfrac has encountered similar results in alternative reservoirs; but unfortunately and as I stated earlier most of their clients are not keen on SPE submissions.
Having said that, it is certain that LPG fracking results will vary from reservoir to another and there is a fair chance that they wont be superior in every formation; I have been unable as of yet to quantify the addressable market for the number of reservoirs and formations where LPG fracking will prove to be superior; but preliminary indications signal that the opportunity is substantial, the deep basin in Alberta and Colorado shale are examples where LPG fracking appears to be very promising.
Regards,
Nawar