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Richard Zeits  

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  • Chesapeake Energy: $3.3 Billion Permian Asset Sale Disappoints [View article]
    Hi Rons Dixon,

    Thank you for the links. I will have a look at details.

    Kind regards,

    Richard
    Aug 17, 2015. 12:29 PM | Likes Like |Link to Comment
  • Gastar Exploration: Why Has The Stock Declined? [View article]
    Small Fry,

    It is obviously substantially above the current pre-hedge cash flow. It is difficult to provide a specific estimate in a comment - it would need to be supported by a discussion of assumptions used, etc. - but you may wish to look at recent capex and the production growth it has generated.
    Aug 17, 2015. 10:55 AM | Likes Like |Link to Comment
  • Gastar Exploration: Why Has The Stock Declined? [View article]
    Small Fry,

    Cutting capex is indeed a very important defense tool for E&P operators (which is sometimes overlooked).

    One of the side effects, of course, is a decline in production and deterioration of credit ratios. However, senior lenders are often supportive of operators' decisions to enhance liquidity.
    Aug 17, 2015. 10:36 AM | Likes Like |Link to Comment
  • SandRidge Energy: A Positive First Step, But A Significant Additional Debt Swap Is Needed [View article]
    Raw Energy,

    These are very interesting points.

    On the conversion feature, I think the press release was not detailed enough (it does not provide a clear enough explanation of the company's conversion option, for example), I also had many questions.

    With regard to SWD, I would just note the the majority of the third-party volumes are SD-operated and represent Repol's/Atinum's interests (and probably other interests) in SD-operated wells. So SWD volumes are currently highly dependent on SD-operated production volumes.
    Aug 16, 2015. 03:03 PM | 1 Like Like |Link to Comment
  • SandRidge Energy: A Positive First Step, But A Significant Additional Debt Swap Is Needed [View article]
    lbenjamin,

    You are exactly right, the company will exercise its right to convert immediately once that right becomes exercisable.

    The extra incentive is given to convert owners to increase the likelihood of early conversion, even before the stock reaches $1.10.

    However, there is one little hurdle: the market needs to see $1.10 value in shares. Currently, it does not appear that it does.
    Aug 16, 2015. 01:07 PM | Likes Like |Link to Comment
  • PDC Energy: More Resilient Than Exxon, And For A Good Reason [View article]
    Hi TOT,

    Thank you for the kind word. Much appreciated.

    Agree on Oxy, very well run in general.
    Aug 15, 2015. 10:16 PM | Likes Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    Mike,

    Actually they did. They said they see the potential but have no plans to test it in the immediate future. After they lost the Canyon wellbore, I think their appetite for exploration has gone down. Judging by how LPIs' Wolfcamp program is performing, the LSS in Glasscock and Reagan may be gassier. In fact, the read-across to their acreage in Howard County appears more certain.

    With dollars being scarce, operators are in no rush to delineate in new areas unless they have to. Drilling in proven areas works better for cash flows.
    Aug 15, 2015. 03:54 PM | Likes Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    Phoenix_investor,

    Great point with regard to W&T position. Very prospective. QEP also looks to be in the right zip code. PXD obviously has significant potential.

    I would just say that delineation has just begun and will take some time. What counts is differentiated performance, not just in-line performance, versus the best wells in other horizons.

    Another word of caution, some of the wells are producing on ESPs. I would say, three years of production history would be needed to derive an accurate idea of an EUR.
    Aug 15, 2015. 02:58 PM | Likes Like |Link to Comment
  • SandRidge Energy: A Positive First Step, But A Significant Additional Debt Swap Is Needed [View article]
    Steves Opinion,

    I would just caution against double-counting EBITDA - the economic benefit of the midstream is currently captured in the company's consolidated EBITDA, isn't it.

    Also, my guess would be that the feasibility of any midstream monetization is predicated on the resolution of the distress risk.
    Aug 15, 2015. 01:50 PM | 1 Like Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    Geocat,

    ~$55 is my rough estimate of what it would take for the company to grow its production in high single digits while spending within cash flows, assuming the best inventory is drilled around existing infrastructure. This is really a maintenance capex figure that does not include growth initiatives (such as lease retention, delineation in new areas and new horizons, etc.).
    Aug 15, 2015. 01:45 PM | Likes Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    22023171,

    Thank you for the kind word.

    The reason I backed out VNOM value out of FANG's Eneterprise Value is because I also backed out VNOM EBITDA - to get to an apples-to-apples ratio.

    Viper is a different business. It does not have operating costs, has little corporate overhead. very different from FANG. I would look at these two parts separatly.

    With regard to FANG's operating results, I agree, impressive. However, with regard to future growth, it's a function of where you see oil prices. If, for the sake of argument, one were to take a view that oil price averages $50-$60 per barrel for several years, one may need to rethink the growth outlook. If, by contrast, one thinks that a substantially higher price is inevitable and a recovery is coming soon, FANG is well positioned to resume growth.
    Aug 15, 2015. 01:14 PM | Likes Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    Pablomike,

    Thank you for pointing out - just submitted a fix. My sloppy copy/pasting - did not grab the full paragraph.
    Aug 15, 2015. 10:36 AM | 1 Like Like |Link to Comment
  • Diamondback Energy: Lower Spraberry Continues To Impress [View article]
    Hi Mike,

    Depletion by legacy vertical wells can certainly be an issue, both from oil in place perspective and drilling/completion perspective. (When attempting to place a new wellboe in close vicinity of depleted rock, one may encounter lost circulation, lost frac volumes, etc. via natural fractures or faults that communicate with depleted rock).

    That being said, I would be surprised that the entire LLS is compromised on PXD's acreage. Something's gotta be left there. PXD's may simply busy with other horizons for the moment and may not feel that it will see an uplift from LLS the same way as FANG can in Spanish Trail.

    One more thought on verticals - PXD has drilled a lot of those. The comment may relate to them having already targeted the LLS interval as part of the Spraberry completion. But I cannot not sure.
    Aug 15, 2015. 07:21 AM | 2 Likes Like |Link to Comment
  • Chesapeake Granite Wash Trust: Stress-Testing At $50 Per Barrel [View article]
    Hi Mark, it is actually on my to do list. I've been a little behind. Hope to catch up soon.
    Aug 14, 2015. 09:27 PM | 1 Like Like |Link to Comment
  • PDC Energy: More Resilient Than Exxon, And For A Good Reason [View article]
    Hi Cal Johnson,

    Terrific point. Let's just look at the environment - very few (if any) international or offshore megaprojects work at prices suggested by the long end of the futures curve. Is the futures curve "wrong?" Very possibly. But hoping for an oil price above $65 in five years is a bet. Should XOM commit capital to new projects? Here is the alternative - go with technology and low cost of capital (hence cancel Arctic plans and focus on the Permian - exactly what XOM is doing).

    I think OXY is the least probable acquisition candidate for XOM, just form the business nature perspective. EOG is more interesting. There are many other targets that appear logical. XOM has very effective acquisition currency.
    Aug 14, 2015. 07:31 AM | Likes Like |Link to Comment
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