CLR 2Q18 Highlights That Caught My Eye -- August 11, 2018

Link here.

Bakken 2.5: 

• "step change" in well performance across the Bakken: # of wells that produced greater than 100,000 boe in 90 days:
• first fifteen years (2000 - 2014): 12 wells/year
• past three years (2015 - 1Q18): 157 wells/year
• memo to self: note to Art Berman; Jane Nielsen 
• in first fifteen years: CLR had one Bakken well in ND that produced 100,000 bbls in 90 days
• last three years: CLR had more than 25 wells that produced 100,000 bbls in 90 days

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From The CLR 2Q18 Presentation

Huge:

• "step change" in well performance across the Bakken: # of wells that produced greater than 100,000 boe in 90 days:
• in first fifteen years: CLR had one Bakken well in ND that produced 100,000 bbls in 90 days; in addition, CLR had one Bakken in MT that produced 100,000 bbls in 90 days
• last three years: CLR had more than 25 wells that produced 100,000 bbls in 90 days
• Bakken type curve EUR increase; oil-weighted focus 
• 1.2 million boe (2Q18) vs 1.1 million boe (1Q18)
• budget breakeven at low 40s WTI
• oil currently unhedged
• says it has the highest "recycle ratio" among peer-- slide 5 -- see notes at end of this post below
• record CLR Bakken 30-day rate: 3,104 boepd; Mountain Gap 7-10H
• 35 Bakken wells deliver 2,282 boepd average 24-hour rate
• 4 of CLR's top ten 30-day rate Bakken wells
• $3.5 million incremental first-year cash flow per well
• record production driven by 60-stage completions
• DAPL's impact on CLR and the Bakken in general (and to think a few malcontents tried to shut it down)

Nice:

• free cash flow: almost $1 billion 
• 2Q18 LOE per boe: $3.49
• new subsidiary, joint venture with Franco-Nevada: minerals acquisition

Okay:

• production guidance, 2018 production: high side raised to 300,000 boepd; 24% y/y growth
• production exit rate raise to 325,000 boepd on high side
• capex increased from $2.3 billion to $2.7 billion ($400 million increase)

Regarding 60-stage completions:

• CLR boasts 70 "60-stage" optimized completions
• adds $500K cost per well
• provides $350K incremental first-year cash flow per well
• ROR doubled to 175% (~ 7-month payout)

EUR history:

• 2011: 430 mboe
• 2014: 980 mboe
• 2015: 800 mboe
• 2017: 980 mboe
• 2018, 1Q: 1.1 million boe
• 2018, 2Q: 1.2 million boe
• CLR notes that the "rocks did not change"

Top 10 CLR-operated wells Bakken wells (those in bold red make the top 10 list for the entire Bakken -- all operators):

• Mountain Gap 7-10H (#1 of all Bakken wells) (see this post; one post among many)
• Monroe 6-2H (tracked here)
• Mountain Gap 8-10H1 (#2 of all Bakken wells)
• Lansing 6-25H (tracked here)
• Uhlman Federal 3-7H (#3 of all Bakken wells) (tracked here, along with the Pittsburg wells)
• Pittsburgh 3-7H (#4 of all Bakken wells) (tracked here, along with the Uhlman Federal wells)
• Vardon 2-14H (tracked here)
• Tarentaise Federal 1-19H
• Vardon 4-14H
• Tarentaise Federal 3-19H (tracked here)

Notes:

• ROR: 
• pre-tax rate of return (ROR) is based on projected cash flow and time value of money; costs include completed well cost, production expense, severance tax and variable operating costs.$3.00 Henry Hub is used for oil price sensitivities and $70 WTI is used for gas price sensitivities.
• With regard to "recycle ratio":
  
  • definition here
  • peers: APC, CXO, DVN, EOG, NBL, NFX, OAS, PXD, WLL, WPX, XEC