CLR Acquisition In The Power River Basin, Wyoming -- February 17, 2021

CLR February, 2021, presentation, link here.

CLR may refer to this as the "Samson deal," or the "Samson acquisition" or the "Samson leasehold."

History of Samson Resources, from the blog's "operators page":

• 2017, January: transfers 130 wells to Resource Energy CAN-AM, LLC 
• 2016, August: files new Chapter 11 exit plan; 
• 2015: files for bankruptcy; that plan ultimately failed as oil prices continued to plummet
• November, 2014: Samson Resources Bakken assets up for sale? Samson Resources Bakken assets said to be worth less than $500 million
• sells 20,000 acres for $30 million to Magnum Hunter; Divide County, along Canadian border
• sells 120,000 acres in Divide County and northern Williams County to CLR
  
• previously private, bought by a consortium led by KKR in 2011 (?) for $7.2 billion; Bakken assets worth $650 million (?)

Note the "relationship" of Samson Resources with CLR. 

For background by the company go to this site first: undated, but it appears to have been posted late 2019, or early 2020, with strategic overview/plans for calendar year 2020:

• headquartered in Tulsa, OK
• March 1, 2017: Samson Resources emerged from bankruptcy as Samson Resources II, LLC
• 85 new equity investors
• assets in
• East Texas / North Louisiana
• Wyoming: Greater Green River and Powder River basins
• September, 2017:
• the company sold its assets in East Texas/North Louisiana for $525 million
• company paid off existing debt and make a large cash distribution to its sharebholders
• In September, 2019:
• the company sold its assets in the Greater Green River Basin
• declared another special distribution to its sharesholders
• 2020: pure play Powder River Basisn
• 132,000 net acres
• 2,400 state permits
• 10,000 bopd (73% liquid)

Then this site, January 4, 2021:

• to sell all of its Powder River Basin to an undisclosed buyer for $215 million in an all-cash transaction;
• the company exited 2020 producing 8,500 boepd (75% oil) from the Powder River Basin
• the sale is expected to close on/about March 4, 2021
• effective date: January 1, 2021
• following the closing, the company will have divested substantially all of its upstream assets
• the company's only remaining upstream oil and gas assets will consist of approx 24,000 net leasehold acres, 23,000 net mineral acres and 40 non-operated wells, all located in East Texas, Oklahoma and Louisiana which the company anticipates divesting in early 2021
• using proceeds fro that sale, the company will pay off approx $13 million in debt and make a cash distribution to its unitholders
• CEO: Joseph A. Mills
• founded in 1971 by Charles Schusterman
• following the closing of the Powder River Basin sale, the company will begin the process of winding down its affairs and moving toward final dissolution

Now, the February, 2021, CLR corporate presentation, linked above, slide #11:

• straddles Campbell and Converse counties in Wyoming
• net resource potential:
• 400 million boe
• 75% oil
• net acres: 130,000 (80% held-by-production)
• current net production: 9,000 boepd, 80% oil
• federal permits: 96 in-hand (6 rig years)
• purchase price: $215 million
• close: March 4, 2021
• three of the top five wells in the Powder River Basin in the leasehold position
• average IP30: 2,670 boepd (88% oil); 2,670 x 30 days = 80,000 boe per 30-day month
• CLR 2-rig program starting in 2Q21
• initial targets: Shannon, Frontier, and Niobrara
• future targets: Sussex; Mowry, Muddy
• the six formations: 4,800' stacked play

Back-of-the-envelope:

• $215 million / 130,000 net acres = $1600/acre
• one primary target
• two secondary targets
• three future targets, in a stacked play

CLR is tracked here.

• last time I checked, May, 2018, 796,000 net acres in the Bakken
• 130,000 / 796,000 = 16%

Monthly Drilled, Completed Wells And DUCs In The Bakken And Permian -- Most Recent Data, January, 2021

A reader provides me the number of wells drilled, completed, and drilled/not completed (DUCs) each month. I've abbreviated the chart. I've only provided the data from the Bakken and the Permian, and I've only included certain months going back to January, 2014.

I've always been impressed with how little the number of t6DUCs really changes over time in the Bakken, running between 700 and 850. Back in December, 2014, there were 732 DUCs in the Bakken. Fast forward to January, 2021, and there were 745 DUCs in the Bakken.

During that same period, from December, 2014, to January, 2021, the number of DUCs in the Permian increased from 1,036 to 3,468.

In the Bakken the number of drilled wells (around 20) and the number of completed wells (around 40) have remained fairly steady. 

In the Permian, the number of drilled wells dropped from over 600 in December, 2014, to 187 in January, 2021. Likewise, the number of completed wells in the Permian dropped from 577 in December, 2014, to 225 in January, 2021.

The "187" drilled wells in January, 2021 in the Permian is the most since April, 2020. Likewise, the "225" completed wells in January, 2021, is the most completed since April, 2020.

No conclusions drawn, simply presenting the data.

No New Permits; Twenty-Two Permits Canceled -- WTI Closes At $60 -- February 16, 2021

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Nice for former WPX shareholders: 

DVN: was up 4.45% today before the close. Held that gain after hours. 

Comment: folks may not recall but there was an article not too long ago that said shale operators were going to have a ton of cash to give away. If I can find it, I will link it. Later: here it is. It's an old story. Not sure if it still has relevance.

GS: bullish on energy, ZeroHedge via Oilprice, link here.

Et tu, WB: 

********************************
Back to the Bakken

Active rigs:

$60.05	2/16/2021	02/16/2020	02/16/2019	02/16/2018	02/16/2017
Active Rigs	15	56	64	56	39

No new permits.

One permit renewed:

• Resource Energy CanAm: a Bettle permit in Divide County

Twenty-two permits canceled:

• EOG (19): eleven Burke permits in Mountrail County; five Austin permits in Mountrail County; one Parshall, one Sidoia, one Van Hook permit, all in Mountrail County:
• White Butte Oil Operations (2): two Jore Federal permits in McKenzie County;
• Slawson: one Wolverine Federal permit in McKenzie County
  

BRK Announces Changes In Portfolio -- 3Q20 13-F Filing -- February 16, 2021

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.  

Link here.

• gold: sold off of its shares in Barrick Gold, a position first disclosed in 2Q20 
• this seemed so out of character for Buffett -- to have bought it in the first place
  
• Chevron: up 2.61% after announcement
• new stake in Chevron
• up 2.05% during normal hours
• after hours, up another 2%
• closed at $93.13; after hours, trading at $95
• bought 48 million shares of Chevron
• about $4.5 billion?
  
• Verizon: up 2.75% after announcement
• 147.6 million shares;
• $8.6 billion
• 6th largest holding in his portfolio
• Verizon is parent company of Yahoo!Finance
• VZ was flat today; after hours, moved up 3.05%; moved up $1.65; trading at $55.80
• waiting for link to see how many new shares bought
  
• new stake in E. W. Scripps & Co
• bought 23 million shares
  
• boosted shares in positions first disclosed in 3Q20
  
• AbbVie
• Bristol Myers Squibb
• Merck -- was down 1% during the day; after the announcement, after hours, up 0.5%;
  
• PFE: sold all shares in PFE
  
• selling off its holdings in banks
• exited his position in JP Morgan
• exited his position in PNC Financial
• cut his stake in Wells Fargo, by 58%, selling 75 million shares 
• trimmed his position in US Bancorp
  
• trimmed his Apple stake by about 6%
  
• trimmed Apple stake by about 6%; selling 56 million shares
• Apple is still BRK's largest stock holding

The buzz all day on CNBC: banks would benefit from rising rates. Interesting that he sold. 

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S&P 500

"Earnings estimates racing higher." -- CNBC

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Apple Car

Why Apple is getting serious about an Apple car. Link here. Munster estimates the smartphone market to be worth $450 billion, a figure Loup Ventures arrived at using 1.4 billion annual unit sales with an average selling price (ASP) of $310.

The analyst estimates the global market for new vehicles, including cars, light trucks, commercial vehicles, and semis to be about $2.8 trillion.

My comment: that may be, but smartphone seems to have a relative small number of "relevant" players; on the other hand, I've run out of fingers and toes counting all the legacy marques and all startups getting into EVs. Of course, ten percent of $3 trillion is $300 billion. That is "new vehicles." Then we get into market share of EVs / ICEs in new vehicles.

CLR Earnings 4Q20-- February 16, 2021

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

CLR closed up 5.5% today.  Investors seem happy with these results. CLR flat after hours, after announcement.

From SeekingAlpha yesterday:

• Continental Resources is scheduled to announce Q4 earnings results on Tuesday, February 16th, after market close.
• The consensus EPS estime is a loss of 8 cents; (-114.5% Y/Y) and the consensus Revenue Estimate is $774.79M (-34.9% Y/Y).
• Over the last 2 years, CLR has beaten EPS estimates 50% of the time and has beaten revenue estimates 63% of the time.
• Over the last 3 months, EPS estimates have seen 10 upward revisions and 11 downward. Revenue estimates have seen 8 upward revisions and 3 downward.

Just out:

The Company reported a full-year 2020 net loss of $596.9 million, or $1.65 per diluted share. For full-year 2020, typically excluded items in aggregate represented $172.9 million, or $0.48 per diluted share, of Continental's reported net loss. Adjusted net loss for full-year 2020 was $424.0 million, or $1.17 per diluted share (non-GAAP). Net cash provided by operating activities for full-year 2020 was $1.42 billion and EBITDAX was $1.68 billion (non-GAAP).

The Company reported a net loss of $92.5 million, or $0.26 per diluted share, for the quarter ended December 31, 2020. In fourth quarter 2020, typically excluded items in aggregate represented $10.6 million, or $0.03 per diluted share, of Continental's reported net loss. Adjusted net loss for fourth quarter 2020 was $81.9 million, or $0.23 per diluted share (non-GAAP). Net cash provided by operating activities for fourth quarter 2020 was $487.5 million and EBITDAX was $572.0 million (non-GAAP).

Adjusted net income (loss), adjusted net income (loss) per share, free cash flow, free cash flow yield, EBITDAX, net debt, net sales prices and cash general and administrative (G&A) expenses per barrel of oil equivalent (Boe) presented herein are non-GAAP financial measures. Definitions and explanations for how these measures relate to the most directly comparable U.S. generally accepted accounting principles (GAAP) financial measures are provided at the conclusion of this press release.

Productions and operations update:

Full-year 2020 total production averaged 300,090 Boepd. Full-year 2020 oil production averaged 160,505 Bopd. Full-year 2020 natural gas production averaged 837.5 MMcfpd. Fourth quarter 2020 total production averaged 339,307 Boepd. Fourth quarter 2020 oil production averaged 176,639 Bopd. Fourth quarter 2020 natural gas production averaged 976.0 MMcfpd.

The Company achieved its 2020 completed well cost targets in both the Bakken and Oklahoma, with go forward well costs in the Bakken of approximately $690 per lateral foot, at a 10,000' lateral length, and in Oklahoma of approximately $1,070 per lateral foot, at an 8,200' lateral length. These all-in well costs include drilling and completion (D&C), full facilities and artificial lift. Cost savings are 70% to 80% structural and are being driven by a reduction in drilling cycle times, stage counts, proppant volumes and stimulation days, as well as the optimization of artificial lift.

 

FY20: $1.4 B Cash Flow from Operations & $275 MM Free Cash Flow (Non-GAAP)

• 4Q20: $488 MM Cash Flow from Operations & $332 MM Free Cash Flow (FCF)
   o $168 MM in Non-Acquisition Capex 
   o 176.6 MBopd & 976 MMcfpd Average Daily Production
   o $2.80 Production Expense per Boe

• FY20: Fifth Consecutive Year of Generating Positive FCF
   o $1.16 B in Non-Acquisition Capex ($1.2 B Guidance) 
   o 160.5 MBopd & 837.5 MMcfpd Avg. Daily Production (155-165 MBopd & 800-820 MMcfpd
      Guidance) 
   o $3.27 Production Expense per Boe ($3.50-$3.75 Guidance)

FY21: Projecting Sixth Consecutive Year of Generating Positive FCF

• In Excess of 40% of Cash Flow from Operations Projected toward Shareholder
  Capital Returns through Debt Reduction and Future Dividends¹ 
   o Targeting Approx. $4.5 B Total Debt by YE21; <$4.0 B by YE22

• Approx. $2.4 B of Cash Flow from Operations; $1.0 B of FCF; 12% FCF Yield²  (non-GAAP)
   o 58% Reinvestment Rate; 3-4% Total Production Growth; Budgeted at $52 WTI & $2.75 HH
   o $5 Increase in WTI = Approx. $250 MM Increase in Cash Flow

• Expanding Operations into the Oil-Weighted Wyoming Powder River Basin in March 2021
   o Adds 130,000 Net Acres & 400 MMBoe Net Unrisked Resource Potential to CLR Portfolio