Saturday, August 11, 2018

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):
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

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