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Richard Zeits  

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  • WPX Energy: The Bakken Potential [View article]
    Pablomike,

    The drop in service costs improves the trade off, in some cases. Also, it is a matter of technical skill and experience in this area. It is natural that it take time for an operator to go from 3 million pounds to 15 million pounds. EOG started out on that route a bit earlier than peers but eventually the industry will catch up.
    Jul 1, 2015. 08:09 AM | 1 Like Like |Link to Comment
  • WPX Energy: The Bakken Potential [View article]
    Mp11932,

    It really depends on the specific stock and the entry point. Macros overwhelm other factors, more often than not.
    Jun 30, 2015. 02:12 PM | Likes Like |Link to Comment
  • Gastar Exploration: Addressing Challenges [View article]
    Kruk,

    The Utica result was indeed a positive this morning - should help Gastar with production.

    I agree, a $4 price realization in Appalachia would make a big difference. So would $80-90/barrel oil. I have always been in the camp that there is no point in discussing value before taking a firm view on commodity macros.

    The question, however, is whether the market does share the specific view and, if not, would the contrarian view materialize.
    Jun 30, 2015. 11:46 AM | Likes Like |Link to Comment
  • Gastar Exploration: Addressing Challenges [View article]
    Okoil,

    Thank you for great points. A fair comment on produced water, I will make a change.
    Jun 30, 2015. 10:31 AM | Likes Like |Link to Comment
  • Gastar Exploration: Addressing Challenges [View article]
    Kruk,

    You wrote: "your analysis seems to be somewhat misleading since you state that Gastar's production (i.e. new drilling) is heavily weighted to the first quarter and somewhat the second quarter..."

    -- I certainly did not state that and I did not imply that. My comment related to the capital spending. Moreover, in my interpretation, I am fully relying on the company's guidance, for both spending and production. With regard to production, I thought I said it is "expected to stagnate or even decline."

    You wrote: "...since they will drastically reduce drilling expenditures in the second half, they could be cash flow positive for the rest of the year."

    -- It really depends on commodity prices you are using. Using the strip pricing and some model assumptions, I estimate moderate outspending in Q2-Q4, based on the capex guidance. But I think every reader should do his or her own math. As you validly pointed out, it is not overly complicated.
    Jun 30, 2015. 10:11 AM | Likes Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    Macombet,

    It is an interesting point. Sounds like Earth Science and seismology will become very popular disciplines in universities.
    Jun 28, 2015. 10:20 AM | Likes Like |Link to Comment
  • Natural Gas: A $3.50 Commodity? [View article]
    Aricool,

    I think we are on the same page. Spec LNG does not work very well as concept, so every new project is looking for long-term anchor buyers.

    However, the U.S. tolling formula for liquifaction is remarkably competitive. It beats many green field projects worldwide. It actually beats new pipeline projects from Russia, once all costs are factored in.
    Jun 27, 2015. 02:46 PM | 2 Likes Like |Link to Comment
  • Natural Gas: A $3.50 Commodity? [View article]
    Aricool,

    Contracts are a prerequisite for the vast majority of U.S. LNG projects. LNG projects are project-financed (with few exceptions).

    So if a take-or-pay purchase agreement is signed by a foreign utility for 20 years forward, where do you think will that utility buy natural gas first, at a landing point in Europe or at Henry Hub?

    I am looking, for example, at the NBP/HH spread for next winter and it is currently at ~$4.40/MMBtu.

    I think HH wins.

    The bigger point I would not overlook is the oil link. The bet here is on the Brent/HH ratio, since contracts are often signed for 20 years.
    Jun 27, 2015. 12:51 PM | 3 Likes Like |Link to Comment
  • Natural Gas: A $3.50 Commodity? [View article]
    Aricool,

    I may have to disagree on the LNG exports. The source of US LNG competitiveness is that it is structured as tolling contracts (HH + liquefaction toll + fixed mark up). Essentially entire capacity is contracted under LT contracts. As a result, variable cost is HH. So there will be no demand reduction because off lower oil prices.
    Jun 26, 2015. 09:26 PM | 3 Likes Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    Oyibo777,

    Given the situation, is there any alternative to addressing the issue openly, thoroughly, and with full public review? When I put myself in the regulators' shoes, I certainly understand what and why they are doing.

    Again the challenge is not the 3-magnitude quakes that are mostly benign - it's the uncertainty of future quakes.
    Jun 26, 2015. 02:44 PM | 2 Likes Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    Sadfacejack,

    It is an interesting argument.

    The question is, however, whether the market will (or should?) view E&Pers as fully liability-free, looking at the situation from today's vantage point (when no major damage has been incurred).

    In fact, the solution could be liability insurance. Hurricane insurance has existed for years in the offshore business. It's just a little expensive.
    Jun 26, 2015. 02:16 PM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    TimmiesRegular,

    In fact, you just raised a very interesting point. One of the concepts that I have seen in research papers relates to the possibility of a "domino" of triggers, both in space and time.

    The trick is, in my view, is that it is probably impossible to know for sure if a specific earthquake that occurs, let's say, a year after a full moratorium on drilling and water disposal, is a natural event or a "triggered" event.

    Moreover, if a "triggered" event occurs, is it triggered by CHK's well, SD's well or DVN's well - assuming there is an operational overlap in the area. So does an operator who has stopped injecting altogether "off the hook" for prior injected volumes, if its neighbors continue to operate?
    Jun 26, 2015. 02:07 PM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    Curious O&G Investor,

    My understanding that the overwhelming consensus in the case of Oklahoma and Kansas, at least for the time being, that the cause is water injection, not fracking. The document from Kansas Geological Survey at the end of the article is an interesting read in this regard.

    I am working on a follow up to talk about other areas.
    Jun 26, 2015. 01:56 PM | Likes Like |Link to Comment
  • Bakken: Defying Oil Price Gravity [View article]
    Qniform and David,

    Actually it appears to me that the question of recoveries is a matter of the context.

    For wells already drilled it is what it is. One can drill infill wells, but often they are less economic.

    For new wells, one can think of variations on the theme of frac intensity and well density.
    Jun 24, 2015. 05:04 PM | Likes Like |Link to Comment
  • Eclipse Resources: Challenges Are Not Over [View article]
    Hi Raw Energy,

    Great comment.

    Ultimately, nat gas prices will be a big factor. It is difficult even for better established operators with NG under $3.
    Jun 24, 2015. 04:50 PM | Likes Like |Link to Comment
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