Updates
October 20, 2016: random notes regarding the SM Energy deal to buy additional acres in the Permian; and to finance that deal by selling some Bakken assets to Oasis.
October 20, 2016: Mike Filloon has a Bakken update on RSP Permian's Silver Hill acquisition in the Delaware Basin of the Permian.
October 20, 2016: Rigzone/Bloomberg -- more on SM Energy's plans in the Permian -- a must read.
October 19, 2016: Oil & Gas Journal on this deal:
- Oasis: acquires 55,000 net acres; 226 gross operated locations; from SM Energy; $785 million
- acquisition: 50 million boe of proved reserves; 63% of which is consider proved developed producing and 77% of which is oil; will produce 12,400 boe/d 4Q16
- Oasis: 3Q16 production averaged 48,509 boe/d; 81% oil
- Oasis: increased its full-year standalone company guidance to 50,000 boe/d
- Oasis: current well costs: now down to $5.2 million on 4-million-lb-slickwater completions
- Oasis' natural gas processing plant in Wild basin now online; operating as planned; will allow October, 2016, production to average over 50,000 boe/d
Original Post
- SM Energy will sell its Williston Basin assets located outside of Divide County for $785 million
- Oasis is the buyer of the SM Energy assets; again, this is their assets "outside of Divide County"
- SM Energy to acquire 37,500 net acres in West Texas; SM will have 82,450 acres in Midland Basin
- $1.1 billion cash plus 13.4 million shares of SM common stock to be issued to the seller
- seller: QStar LLC, a portfolio of EnCap Investments L.P.
$1.6 billion / 37,500 acres = $40,000/acre
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Newfield will sell North Dakota Bakken assets to finance STACK play in Oklahoma. Link here.
Newfield paid $470 million this year to expand its drilling rights in the central Oklahoma shale fields, part of a flood of investment into one of the few U.S. regions where drilling is still profitable at current prices.
It’s a matter of "when, not if" Newfield sells its drilling rights in the Williston shale basin, [CEO Lee] Boothby said. Newfield currently holds rights on 85,000 acres in the Williston. No specific deal is on the table right now, he said.Back of the envelope: 85,000 x $5,000 = $425 million.
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LNG Unable To Compete With Coal in Asia
Despite an over 90 percent coal price rally to almost $100 a tonne, and even with relatively low LNG prices of $6.50 per million British thermal units (mmBtu) , versus $20 per mmBtu in 2014, gas still can not compete with coal in Asia.
For LNG to be competitive, coal needs to trend toward $110 a tonne in Asia.
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10/18/2016 | 10/18/2015 | 10/18/2014 | 10/18/2013 | 10/18/2012 | |
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Active Rigs | 32 | 67 | 190 | 184 | 186 |
RBN Energy: understanding rate regulation for a new crude oil pipeline. A continuing series.
Oasis to offer 46 million shares of common stock. Link here.
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The Market
Open: up about 75 points. Goldman Sachs quarterly earnings surged 47%; easily beat expectations. Shares up 2% in early trading. As reported yesterday, Netflix shares have surged; up almost 20% in trading today on reports of huge global subscriber increase; Netflix is set to become #2 in dollars spent for "own" content. Only ESPN will spend more. If I recall, around $6 billion to be spent by Netflix, and about $7 billion by ESPN for "own" content programming. Of course, Oasis was expected to drop with today's news and shares are down almost 4% to under $11. XLNX is moving in the right direction now after a few down days. US Silica holdings, I would assume, is trending up again; let's see: yep, up about 1%. RSP Permian showing a bit of profit taking, down about 1.3%.
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