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Richard Zeits  

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  • 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
  • Gastar Exploration: Why Has The Stock Declined? [View article]
    It is really about prices - benchmarks and regional discounts. Difficult to make money.
    Aug 13, 2015. 02:15 PM | 1 Like Like |Link to Comment
  • PDC Energy: More Resilient Than Exxon, And For A Good Reason [View article]
    Meridian6,

    It appears that NGLs is in fact the most troubled part of the hydrocarbon mix as the market appears to be very strongly oversupplied. Things may change over time with more exports but for the time being NGLs appear to be priced below nat gas on a BTU parity basis.

    Is it an issue for PDCE? It certainly is. However, the biggest driver for the stock is oil price in 2017. Currently, the market is most focused on uncertainties through the end of 2016. PDCE seems to be reasonably well protected. A year from now, focus will clearly be on 2017. PDCE is wide open on oil in 2017.

    As I said, ultimately, it is all about well productivity vs. well cost. Another year can also make a big difference on both fronts.
    Aug 13, 2015. 10:38 AM | Likes Like |Link to Comment
  • PDC Energy: More Resilient Than Exxon, And For A Good Reason [View article]
    David-in-CT,

    Sounds it has been an 11-bagger for you - congratulations! (May I borrow your crystal ball for the weekend please? :) )
    Aug 13, 2015. 08:19 AM | 2 Likes Like |Link to Comment
  • PDC Energy: More Resilient Than Exxon, And For A Good Reason [View article]
    Michael,

    Thank you for the kind word.

    I don't disagree, PDCE and XOM are very different companies. But it does not hurt to contrast and compare using metrics that different companies may have in common - return on ongoing investment activity, for example.

    Also, it is interesting to anticipate companies' next moves, as such moves may also move the stock.
    Aug 13, 2015. 07:43 AM | 1 Like Like |Link to Comment
  • Ultra Petroleum: Excellent Cost Reductions, But Higher Gas Prices Needed For Prosperity [View article]
    Index60/40,

    I don't think there are economic pipeline routes that can flow gas into the Rockies from the East. That being said, nat gas is like a liquid in a system of connected vessels - physical molecules do not necessarily need to go to the other part of the system for the pressure to equalize all the way across.

    In other words, Marcellus gas does compete on price with gas supplied to the West Coast (no matter what they try to say) via supply substitution. Differentials are a slightly different story.
    Aug 12, 2015. 02:20 PM | 2 Likes Like |Link to Comment
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