Thursday, October 20, 2016

Bakken Update: RSP Permian's Silver Hill Acquisition -- October 20, 2016

From SeekingAlpha.

  • The Acreage in Loving County has eight proven intervals, with the Wolfcamp providing very good economics at $50/Bbl
  • RSPP only strengthens its position, as its Loving acreage may be better than its core in Midland
  • The average Silver Hill well economics in 2016 have a type curve that produces a net of over $3 million in just 31 months
  • RSPP has a high ceiling in Loving, because its well design is much better than Silver Hill's so well performance should improve
Less than 30 minutes ago I noted in a post that operators and investors are starting to look at a different method of "measuring" mineral acres. Obviously the have been doing this internally for quite some time, and anyone paying attention has done the same thing. But generally, it was done in a "qualitative" manner. Now it's being done in a "quantitative" manner.

From the linked Filloon update:
We really liked this purchase based on the location. 41,000 net acres may not seem huge when looking at deals in other US plays. It is a huge deal, based on the large number of intervals. Looking at horizontal acres (if we consider all of the intervals and locations that can be drilled per section) it comes out to 512,000 net acres. It contains 5,800 economic locations.
RSPP's Delaware leasehold has a combined thickness of 4,500 feet compared to 1,800 in Midland. The majority of Delaware intervals produce more resource per foot on a BOE basis. IRRs are a little better in Midland, but natural gas percentages are higher in the west. Silver Hill has completed 37 wells.
Valiant Ambition: George Washington, Benedict Arnold, and the Fate of the American Revolution
Nathaniel Philbrick
c. 2016
DDS: 973.4 PHI
Chapter 9
Unmerciful Fangs
Begins with Joseph Reed, champion of Pennsylvania's radical Constitutionalists.
Fell out with Geo Washington in the winter of 1776 over his clandestine correspondence with Charles Lee.

Reed adamant in hanging colonists accused of treason. Went after well-to-do Quakers.

Reed and Cadwalader: former friends; began to despise each other; Benedict Arnold was the litmus test.

Arnold, as governor of Philadelphia had been targeting the radical Constitutionalists.

Reed becomes president of the state's Supreme Executive Council, making him the most powerful man in one of the most powerful states in the country.

But things intervened.

Geo and Martha Washington moved from Middlebrook, NJ, early winter, 1778, to Philadelphia for temporary winter quarters, so that he could meet with Congress on plans. 

Washington increasingly upset over Benedict Arnold fighting with the states' other leaders.

Late January, 1779, Geo Washington back to Middlebrook.

February: Geo Washington planning trip to New York via New Jersey. Remember: most Brits have gone south.

By now, Reed going after Benedict Arnold. But not enough evidence to convict him.

Geo Washington refused to take sides.
Arnold's life falling apart: marriage on the rocks; financially in deep trouble; leg not healing; a total mess. And Reed still after him.

Many areas of the country where colonists deeply divided. By 1779, Arnold believed the experiment in independence had failed.

Arnold wanted the Brits back, but that was assuming they could win the war. A big assumption. Spain was about ready to join the French on the side of the colonists.

But the small British Army continued to hassle the poorly fighting colonists in New York area; it was hard to say who might win. Arnold decided to tip the scales.

Arnold still a huge supporter of Geo Washington, but writes a hysterical letter to Washington on May 5, 1779 -- and references "money" which will be his downfall. 

And that's where the chapter ends. Arnold's court martial had been delayed from May to June and he intimated to Washington he would send out feelers to the Brits if necessary, and that if that was treason, he should be found guilty and executed.

So, at this point, we have two punch-drunk armies (as Philbrick calls them) with no clear winner. The colonists remain divided. France has joined the colonists against the Brits, and the Spanish may soon do likewise. Benedict Arnold, a broken man, is ready to put out feelers to the Brits to try to tip the scales in their direction. And he has sent a letter to the only man who might help him, suggesting what he is thinking.

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