Wednesday, August 6, 2014

EOG 2Q14 Results -- August 6, 2014

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Other Investment News

EOG Transcript, over at SeekingAlpha:
  • EOG's workhorse assets, the Eagle Ford and the Bakken meet or exceed "high" expectations
  • steadily improving completion designs
  • pad completions 
    • a lot of offset wells are taken off-line
    • wells take longer to flow back as new wells are brought on-line
    • production growth can be lumpy rather than linear
  • in the Bakken
    • shifted to more multi-well pad drilling this past year
    • encouraged by early production from first 700-foot-spaced wells
    • results still pending
    • after achieving peak rates, well production is flattening out nicely, delivering excellent rate of return
  • during 2Q14, EOG plans to drill both MB and TF on EOG's Antelope Extension acreage
    • will test various benches of the TF in both core and Antelope
    • later this year will get first data point from the third bench
  • Q&A
    • railcar safety issue? non-issue for EOG
    • spacing in the Bakken? on their third set of down spacing; with good success with 1,300-feet spacing (4 wells / section)
    • spacing in the Bakken? now on their third set of down spacing; with good success with 1,300-feet spacing (4 wells / section)
    • now testing 700-foot spacing (8 wells/section); initial results look good
Seeking Alpha noted in the presentation:
  • In an investor presentation today, EOG Resources touted a pair of plays in the Permian Basin the company believes have the potential to achieve returns in excess of 100% each
  • The Leonard Shale is a shallow play believed to have potential reserves of 550M barrels of oil net to EOG, while the company is still evaluating potential reserves for Second Bone Springs; the two plays sit below 73K net acres EOG holds in the region
Reporting today:
  • CNP, forecast 23 cents, beats by 7 cents; beats on revs, raises FY14 EPS
  • CHK, forecast 44 cents, misses; 36 cents; raises guidance; Zacks;
  • DNR, forecast 27 cents; misse; 26 cents; Zacks;
  • DVN, forecast $1.40; in-line; $1.40; Zacks;
  • ETP, forecast 64 cents; after market closes;
  • QEP, forecast 33 cents; after market closes;
  • SD, forecast 4 cents; beat by 2 cents;
  • RIG, forecast $1.12; after market closes;
The Space Story Of The Decade
Without question, this is the outer space story of the decade: it should make Mr Obama very, very happy. The US did not build this; the European Space Agency did. This is simply incredible:
After 10 years and a journey of four billion miles, the European Space Agency’s Rosetta spacecraft arrived at its destination on Wednesday for the first extended, close examination of a comet.
A six-minute thruster firing at 5 a.m. Eastern time, the last in a series of 10 over the past few months, slowed Rosetta to the pace of a person walking, about two miles per hour relative to the speed of its target, Comet 67P/Churyumov-Gerasimenko.
“It is like driving a car or a bus on a motorway for 10 years,” said Andrea Accomazzo, the flight director, at a post-rendezvous news conference. “Now we’ve entered downtown. We’re downtown and we have to start orienting ourselves. We don’t know the town yet, so we have to discover it first.”
Over the coming months, Rosetta and its comet, called C-G for short, will plunge together toward the sun.
In November, a small 220-pound lander is to leave the spacecraft, set down on the comet and harpoon itself to the surface, the first time a spacecraft has gently landed on a comet.
My understanding is that "a Mr Wolowitz" will be in charge of landing the spacecraft on the comet. 

The bad news: Mr Wolowitz works in a non-metric environment; the ESA works in a metric environment. We've seen this movie once before. 

The Big Bank Theory, Mars Rover Theory

A Note for the Granddaughters

What a beautiful day this has turned into. A great day for a flâneur. 

I'm in a Long Beach, California, McDonald's on Pacific Coast Highway, where no one looks like me. It has to be one of the friendliest McDonald's I've visited in quite some time. It is the exception when I find a McDonald's where the staff is not friendly; it's just that I haven't been in a McDonald's in the past two weeks. The only place where I can recall a McDonald's not being friendly was in NYC about 30 years ago. And a McDonald's at some airport, a long time ago. But today, the typical, wonderful friendliness.

I'm waiting for my car to be serviced in preparation for the trip back to Texas. When I walked in (to McDonald's) I noticed that the breakfast menu was still up; hamburgers wouldn't be served until 11:00. When I asked what time it was; she said, "10:53." On the dot, apparently. Something tells me her shift got over at 11:00 which would also explain why she was so friendly.

In Germany, restaurants generally had a table reserved for "regulars," called a Stammtisch. Here, at this McDonald's there was a table for four with this sign on the wall: "This table is reserved for the police department." It was empty. I sat across from it. I almost expected Joe "Jack Webb" Friday to wander in. Speaking of which, to get back to the Bakken, wouldn't it be a hoot for Emerald Oil to start naming their wells after great TV shows from the 50's and 60's. Start with "Car 54, Where Are You" and Toody and Muldoon. 

Jiffy Lube is still the best place in the world for an oil change. Also Firestone. I don't like going to dealers much any more: the wait is always way too long. But they have really nice waiting rooms, and if you like to look at cars you can't afford, then getting your car's oil changed at a dealer is the place to go.

 The first thing the mechanic said, "On behalf of Jiffy Lube, I apologize for the mechanics in Texas (where you last had your car serviced). They forgot to put the air filter clamp back on."

The downside?

"The car probably used a bit more gas."

And so it goes; I just thought the Chrysler minivan was .... speaking of which .. the first trip out to California in our other Chrysler minivan which I drove alone (thank goodness) from San Antonio had the smell of leaking gasoline the entire trip. I was a bit worried when I connected a) the smell of leaking gasoline, and, b) 120-degree weather in San Bernardino County. But I got to LA okay. When I brought the van to our trusted "oil change" person, he asked me to park the van across the street in the empty lot. Yeah, it's fixed. A cracked plastic fuel line: cracked due to sitting in the hot sun for several months without being driven. The fuel line was spewing gasoline into the west Texas desert, the New Mexico desert, the Arizona desert, the California desert, and unto the sprawling Los Angeles interstate highways for about 1,504 miles. Mileage: not so good.

So, back to Long Beach. I told the Jiffy Lube folks I would take a walk for the half-hour while they changed the oil and serviced the 60,000-mile transmission recommendation. They told me that back in Dallas that at 60,000 miles the transmission would need to be serviced, so I was expecting that. Nothing else but they have my cell phone number in case they need to call me.

The young woman at Jiffy Lube (the only time I've seen a young woman at a Jiffy Lube) asked if I would like my windows washed and the floors vacuumed. Very, very friendly service.

Immediately after leaving the Jiffy Lube location, I found 15 pennies, a dime, and a nickel -- I had to dodge a few cars to get them all, and it was a bit weird to be doing this in front of what-looked-like-an-abandoned-ObamaCare-health-clinic with "pregnancy tests" stenciled on the glass door (sort of like "Sam Spade, Private Detective"). I've taught my granddaughters the art of finding coins on the street. The second most important rule: if you see one coin, look for more. Dropped/lost coins seldom travel alone. The first most important rule: watch out for traffic. A rule I don't think I have to teach: a penny partly hidden by dog poop is probably not worth picking up. A dime? Depends. On how much of the dime is visible, I suppose.

My coffee and hash browns (they don't serve hamburgers until 11:00) cost $2.22, so I had 22 cents in found change.

I knew there was a possibility that the day would start out well. I have never, ever talked business with a financial adviser in person. It's a long story, but to cut to the chase, I actually made an appointment to meet a financial adviser in person at the bank where we have an account. I was well prepared, but had no real interest in doing this, so when he said that he was licensed only in California, and because I was from Texas, he could not talk "financial advice" with me. That was wonderful. I fulfilled my spousal duty of scheduling time with a financial adviser in person but he was restricted by law or by the SEC or by the San Pedro police department from talking about my account or talking about anything that had to do with finances. My only question was whether the account was a margin account (another long story, don't ask). His expertise was in this area according to the signs outside and inside the bank and on his desk, and according to his business card. But he couldn't answer that question, whether it was a margin account because he was restricted by law or by the SEC or by the San Pedro police department from answering that question. He was able to bring up my account on his computer, so he knew.

Actually, I think he broke the law when he said it was not a margin account; actually he didn't come right out and say that but one could tell by his facial expressions it was not a margin account when I told him I bought $1,000 in securities on that account last Friday and the transaction came in at $1,005.36, and now my account is in arrears of $5.36. The look on his face was priceless.

He asked me how I ever got into that account. I told him I've had the account for 30+ years and how I got into it was a story longer than he would really be interested in. So, and I kid you not, he simply asked, with that countenance of incredulity, "So you just kept putting money into this account for 30 years?"


So, maybe it wasn't the law or the SEC or the San Pedro police department that kept him from talking financial stuff with me. He probably thought I was crazy.

So, it was a very pleasant meeting. It took up about 15 minutes; he was still apologizing (and thanking me for my service to this country) as I left.

And that's when I drove down to get the car serviced. All of a sudden I had two hours free that I thought was going to be spent with a financial adviser.

What a beautiful day for a flâneur.


  1. I hope you have many more days like this. Priceless!!!

    1. Thank you; yes, it was a great day. Some days are, indeed, priceless.