COP Earnings Transcript -- July 27, 2018 -- No One Is Talking About The Red Queen Any More

Note for newbies, putting Bakken production in perspective -- no one is talking about the Red Queen any more:

• back in 3Q12, COP was producing 26,000 boepd with five rigs (and going to eight rigs) in the Bakken
• now, 2Q18: two rigs in the Bakken and producing 82,000 bpd 

Lifting cost in the Eagle Ford: $2 / bbl

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COP, 2Q18, earnings transcript, at SeekingAlpha, and "slide deck" is here.

• cash flow has been running high relative to the sensitivities we provided last November; why?
• production is higher than we projected and the increases in production are coming mainly from high margin, unconventionals that currently have no cash tax
• interest expense is lower as a result of the accelerated reduction in debt
• reference point
• at $50 WTI: we generate CFO of $7 billion
• at $65 WTI: $10 billion
• that turned out to be too low
• recalibrated:
• at $65 WTI: $11.5 to $12 billion depending on differentials
• the market has not yet fully appreciated the cash-generating capability of our assets
• strong benefit of our Brent-linked portfolio
• bottom line: cash from operations exceeded CapEx by $1.2 billion
• cash flow more than funded the dividend and share repurchases: together this represented a return of capital to shareholder of about 30%
• operations, production by play:
• Eagle Ford: 182,000 bpd (not specified whether bo or boe)
• Bakken: 82,000 bpd
• Delaware: 28,000 bopd
• third quarter production guidance: 1.215 to 1.255 million bpd
• third party outage in Canada will continue, but will be offset by additional high margin growth from the Big 3 unconventional plays
• milestone: greater than 300,000 bpd from the Big 3
• production growth in the Big 3
• company's goals: 22% growth or better, year-over-year
• actual in 1Q18: 20% -- company not happy; missed the 22% goal
• now: at 37% growth, year-over-over
• rigs:
• Eagle Ford: 7 (up from 6)
• Delaware:2 (down from 3)
• Bakken: 2
• but look at that: with 2 rigs in the Bakken -- 82,000 bpd; 3 rigs in the Delaware, 28,000 bpd
• and it's going to get even better in the Bakken -- amazing side note
• completions: COP refers to them as "Vintages"
• Vintage 4 in the Eagle Ford; have just started using Vintage 4 completion strategies
• now testing Vintage 5
• manufacturing stage in the Bakken and Eagle Ford; not yet there in the Permian
• Eagle Ford: lifting cost -- $2 / bbl and super-high margin -- that's why they are adding a rig ot the Eagle Ford and cutting back a rig in the Permian
• why are they keeping rigs in the Permian? 
• maintain leases there
• to "do" the Permian efficiently
• to continue to drill quad pads
• an analyst questioned whether the Permian was still core to COP; the answer, "yes"
• one less rig in the Permian will affect Permian production in 2019; not in 2018
• analyst: "you're generating a ton of cash beyond even your buyback plan"
• analyst: " wall of cash potentially over the next two or three years if oil prices stay at these levels
• why they don't "build DUCs" -- it's not efficient "we drill a well, we think yoiu should complete the well. These are great wells, and so that's an extra 9,000 there. And then the last 9,000 bpd or so that makes the 25,000 bpd (across the Eagle Ford), the last third, is really three.... plus 15,000 in the Eagle Ford and a plus 10,000 in the Bakken ...
• the Eagle Ford is really – the numbers are driven by new drills, but we are doing some recompletions, particularly in situations where we do what we call defensive refracs, where we have an area where we have a pressure depleted zone and we're drilling a new child well next to a parent well that sort of thing. But that's not a key driver in the volumes beat   

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The Victorians

A.N. Wilson

c. 2003

pp. 230 - 231

From the chapter, "Clinging to Life":

If one had to isolate a single all-consuming idea which has taken hold of the human race in the post-politial era in which we now live, it is the interrelatedness of natural forms -- the fact that we are all on this planet together -- human beings, mammals, fish, insects, trees -- all dependent upon one another, all very unlikely to have a second chance of life either beyond the grave or through reincarnation, and therefore aware of the responsibilities incumbent upon custodians fo the Earth.

'Let it be born in mind,' Darwin writes in The Origin, 'how infinitely complex and close-fitting are the mutual relations of all organic beings to each other and to their physical conditions of life.'

This surely explains why, in our generation, Darwin has grown in importance and stature, whereas almost all his contemporary thinkers and sages are half-forgotten.

Herbert Spencer is all but unread. With the demise of European communism, it seems to many -- especially to the majority who have not read Marx -- as if The Communist Manifesto and Das Kapital are dead.

Freud, in many schools of psychology, is discredited; Hegel is of more interest to historians of philosophy than as a living inspiration to many of our contemporary philosophers.

Carlyle and Ruskin are unknown to general readers; Mill is read selectively by students, but is no household name. But neo-Darwinians -- Richard Dawkins, Daniel C. Dennett and the ret -- can still write bestsellers.