This is a "cut and paste" from one of my earlier postings. It's that important (the PN link was sent to me by a reader: a huge "thank you.")
A reader sent me this story. It supplements an earlier EOG story: very important.
In the latter link, Papa says there are only four plays worth discussing (the rest are all "insignificant"): the Bakken, the Eagle Ford, the Permian, and the Barnett.
In this newest link, Papa has revised his opinion: there are only TWO plays that are important: the Bakken and the Eagle Ford.
This is an incredible story -- everyone needs to read.
EOG Resource’s top executive Mark Papa raised a few eyebrows Sept. 4 when he told attendees of Barclays energy conference that only two horizontal liquids plays in the U.S. matter — the Eagle Ford and the Bakken.
The rest are “insignificant” in terms of future U.S. production, Papa says, including those his company is invested in, such as the Wolfcamp, Permian and Barnett plays.
In fact, in 2013, it is “likely” the Houston-based company will be “stealing some capital from the Permian and … Barnett combos” for company operations in the Eagle Ford and Bakken, Papa said.
This story, by the way, is at odds of so much that has been published about the Permian lately (one example). It appears Papa, like Wayne and Steve, is skating to where the puck will be. Again.Now some comments.
I wonder if he's forgetting about the Utica?
When I posted the earlier story about Papa stating only four plays were discussing, a reader noted that was in EOG's best interests. Well, of course.
However, in his most recent remarks, he is even dissing a couple of EOG plays. Interesting.
Another data point: Mr Papa retires retires in mid-2013. For some CEOs there is not a lot of difference between fading away and retiring. Something tells me that Mr Papa is not going to fade away. I look for him/EOG to make a move in the Bakken. It's possible the move will be in the Eagle Ford, but two other data points to consider:
a) EOG has been relatively "status quo" in the Bakken for the past two years; predictable and not particularly exiting for a blogger or an investor; and,Remember: updates of "all" Bakken players can be found at the 2Q12 earnings page. EOG must be doing something right: in 2Q12, EOG beat consensus estimates by 18 cents.
b) the QEP/Helis deal raised the bar both in estimated value of Bakken assets and in urgency to acquire such acreage
As long as I'm rambling, two more data points:
a) it's hard for me to believe that Chesapeake won't sell its North Dakota acreage;Disclaimer: this is not an investment site; do not make any investment decisions based on what you read at this blog. This is certainly not a recommendation to trade in EOG. It's just idle rambling by someone who gets a kick out of the Bakken.
b) although Congress may sort it out later, there's no guarantee: don't forget the "fiscal cliff" which will impact the wealthy significantly
Re papa:
ReplyDeleteSelf serving.
EOG Barnett combo and Permian are too gassy and NGL centric. He avoids EOG's other plays, mostly gas or for sale or both.
Now, EOG is mostly drilling Eagle Ford. Bakken is hot, mostly for others. So, he includes it. If EOG was not in it, he would say "only one real play."
When Papa applauds a play EOG is not in, listen. Until then, he is spinning.
He will retire. What stock options does he have? Is EOG for sale? Does he want the price up soon?
EOG has some great stuff, and some flubs, like they all do?
Did Papa mention their bad wells in the Marcellus JV that they had to drop? Or their ND Spearfish? (compare to Corinthian results.)
They all spin. What I don't like is bad mouthing the competition. That is common.
The EOG EF play will announce better curves by winter. Great play.
EOG Bakken waterflood is important.
Anon 1
But lots of very interesting data points. I love the weekends when I have some freedom to re-read some stuff readers have sent me earlier -- I see things I missed earlier.
ReplyDeleteWhat I find most interesting here: we can see if EOG makes some announcement in the next 12 months based on the CEO's comments. That will be the "proof in the pudding" as they say. Will EOG be just another good operator in the Bakken or will they take their operations there to a new level? Among the operators, I would argue that QEP, OAS, and BEXP brought their operations to a new level; the others have been on a steady but predictable incline.
The Bakken is making most Bakken-centric CEO's look good but I still think that some CEOs are going to rise above the rest. I still get a kick out of ONEOK. Heckmann buying Power Fuels is another.
EOG missed the Utica, so it doesn't count.
ReplyDeleteSee Halcon Barclays presentation on Utica, but also on Bakken. Note the log scale in the type curve, page 21. That is one way to flatten the decline curve! Important to see, and beware.
Anon 1
The link for the presentation:
ReplyDeletehttp://files.shareholder.com/downloads/ABEA-5X1N65/2059934157x0x595887/19ed5cef-4190-423d-b153-fbde84882150/Barclays_Halcon_vFINAL_090512.pdf
I don't know if I would have caught that "flattened" decline curve. I've seen the decline curves so often, I've become numb to them, and seldom look at them any more. I probably would have mistakenly attributed the flattened decline rate to the small, vertically-challenged graphs.
Thank you for pointing out. Halcon has quite a few irons in the fire -- a lot of different plays.