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Hey Oil Barons.......

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On 3/28/2018 at 8:39 AM, AnonymousInternetPoster said:

For those that care, lots of new sand company activity in West Texas; Preferred Sands, Hi-Crush, Alpine Silica, Black Mountain Sand, Hi Roller and US Silica.

Good luck finding enough trucks/drivers to haul all of that sand.

 

On 3/28/2018 at 8:58 AM, Neonmoon said:

They'll come back...they always come back

(or someone will invent a different solution)

 

On 3/28/2018 at 9:05 AM, Trey3216 said:

You mean, like, rail?? 

Many companies are already testing alternatives to sand. Sand has inherent cost and logistical problems. I’m not saying the industry will solve this problem anytime soon, but I’m not going to bet against industry ingenuity in the long run. 

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3 hours ago, tequila said:

VNOM changing over to C-Corp.  

 

The Link

I think they're actually changing their tax status from a pass-through partnership to a partnership taxable as a corporation.  Subtle difference.

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It seems Saudi Aramco made an interesting move to purchase a bunch of downhole equipment from various providers a few days ago.  I saw that Pinnacle had some wireline trucks up for auction recently and Weatherford closed many of its Petroleum Consulting services including borehole seismic here in the US.   Anyone have more information on if Aramco is getting into the business of hydraulic frac monitoring?  

 

Aramco buys a bunch of shit

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1 hour ago, Johnny Chimpo said:

Oil Baron checking in from Kazakhstan. Things are starting to pick up a good bit for my company. 

hiring?

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Hard to say, they were staffing up personnel through consulting firms pretty heavily for a while but I think they’ve more or less reached a steady point for this project I’m on. 

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I don't have any info about Saudi Aramco on the services side, but they're making a huge push into diversifying into various specialty chemicals.  They bought a CO2 based polyol company, Novomer, not that long ago and they are hiring like crazy.

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The project I’m contracted to is trying to wrap up and it’s funny watching the young client/corporate engineers from around the US struggle with 2 years in Kazakhstan vs Midland, TX.

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5 minutes ago, Llano Estacado said:

The project I’m contracted to is trying to wrap up and it’s funny watching the young client/corporate engineers from around the US struggle with 2 years in Kazakhstan vs Midland, TX.

So you’re equating Kazakhstan with Midland, or saying it’s favorable to Midland?

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Kazakhstan ain’t so bad. I’m on 28/28. I’m headed to Spain for my next days off then Italy next days off after that. Then Prague and Budapest for August. I think I’ll be alright. 

 

For the record I told them midland was the only place I wouldn’t go :)

Edited by Johnny Chimpo

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More, so many of them are working for a major, but didn’t really think out their next move or long term career path. Some of them are a little shocked they aren’t getting offered 9x80 desk postings at corporate after 12-24 months out of school on a large cap-ex project. I guess as an oilfield brat from W Texas, I always anticipated a nomad career with somewhere in TX being homebase. Just funny to me seeing people 5-10-15 years behind me.

“I like deep water, but don’t think I could live in South Louisiana.”

“I think I would like working plant turnarounds, but I could never live in Lake Charles or Baytown!”

“I want to see the world while some else pays. Job postings in Midland, Kazakhstan, or West Africa!?! Gross.”

There’s not really a wrong answer, choose what works for you, but snowflakes also need to get woke that they’re just a cog in the machine.

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I’ve worked in some great locations and some real shitholes, but I’ve never turned down any job when requested.  I am pretty adaptable so even the shitholes haven’t been that bad and the big bucks more than make up for it.

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11 minutes ago, skipmcgee said:

https://www.eia.gov/todayinenergy/detail.php?id=35692#

US production is projected to continue to be dominated by PADD 3 and by light sweet crude (ie from tight formations).  Medium sour (Alaska and L48 offshore) is projected to fall from 30% of present production to 18% in 2050.

These fuckwits can't predict a crude draw vs build from one week to the next but they are making projections out to 2050?

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Devon to lay off 300 

https://www.reuters.com/article/us-devon-energy-layoffs/devon-energy-will-lay-off-9-percent-of-staff-to-boost-returns-idUSKBN1HH2VT

Quote

 

HOUSTON (Reuters) - Devon Energy Corp said on Tuesday it would lay off 300 workers, roughly 9 percent of staff, part of a plan to streamline operations and boost the shale oil producer’s sagging returns and stock price.

The cuts will affect all areas of the company’s operations, not just its Oklahoma City headquarters. Staff will be let go “in the weeks ahead,” Devon said in a statement.

Devon, like many of its shale peers, has come under pressure from Wall Street in recent months to focus less on production and more on ways to boost shareholder returns. The company’s stock had, as of Tuesday’s close, lost more than 20 percent of its value in the past year despite a jump in oil prices.

 

Devon said it expects the cuts to help save $150 million to $200 million annually by 2020. “The oil and gas industry is in a lower-for-longer commodity price environment, which requires Devon to transform the way it operates,” Devon spokesman John Porretto said in a statement.

 

 

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35 minutes ago, T’Boo Ted Marshall said:

LGCY has been on a tear the last 90 days.  Never thought I would see that from them.  

Pretty wild ride for them.  I remember scooping up some of their bonds for .05 and .08 on the dollar during early '15.  Sold most of them in the .30's for some dumbass reason.  

{Charles Barkley} "I'm a dumbass" {Charles Barkley} 

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58 minutes ago, T’Boo Ted Marshall said:

LGCY has been on a tear the last 90 days.  Never thought I would see that from them.  

No longer a zombie MLP brah. 

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21 minutes ago, Trey3216 said:

Pretty wild ride for them.  I remember scooping up some of their bonds for .05 and .08 on the dollar during early '15.  Sold most of them in the .30's for some dumbass reason.  

{Charles Barkley} "I'm a dumbass" {Charles Barkley} 

Not entirely dumb on your part - if you poured proceeds into the equity. 

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No longer a zombie MLP brah. 
I was talking to an investment guy a couple weeks ago who was talking about how MLPs are great for funding ops. I told him that I would exercise caution, especially in a post-August 2014 world and he kind of shrugged me off. As long as it is OPM, I guess.

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2 hours ago, Rex Kramer said:

Not entirely dumb on your part - if you poured proceeds into the equity. 

Couldn’t.  IB changed how we can hold some IRA assets last year.   Had to rid of the MLP’s in some instances.   Can’t even hold Icahn Enterprises anymore (and their fat 8+% dividend).  

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2 hours ago, Eastwood said:
3 hours ago, Rex Kramer said:
No longer a zombie MLP brah. 

I was talking to an investment guy a couple weeks ago who was talking about how MLPs are great for funding ops. I told him that I would exercise caution, especially in a post-August 2014 world and he kind of shrugged me off. As long as it is OPM, I guess.

Huh?  MLPs are terrible for funding ops - whatever that means - because they don’t exist anymore or if they do, they’re (MidCon the only one left?) struggling big time. 

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Huh?  MLPs are terrible for funding ops - whatever that means - because they don’t exist anymore or if they do, they’re (MidCon the only one left?) struggling big time. 
I thought they were all gone. I told him as much, but if one was approaching him for money that I'd be very cautious because they were often used as vehicles for either fraud or for people who had no business being in oil getting to play oil baron with other people's money. Sure, there were a couple that had good intentions and a couple of solid people behind it, but in my experience that was the exception, not the norm.

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Thoughts on the gas supply issue out in the Permian? Seems like there is a ton of associated gas with all the increased oil production. And now with Apache ramping up gas production in Alpine High, I'm really curious to see how much of a discount Waha is to Henry Hub in the coming year+. Is Mexico or LNG supposed to absorb all this?

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Saudi is going to support a rise for Aramco IPO. After that, the cuts will disappear and the price will fall.

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10 hours ago, MadTrapper said:

Thoughts on the gas supply issue out in the Permian? Seems like there is a ton of associated gas with all the increased oil production. And now with Apache ramping up gas production in Alpine High, I'm really curious to see how much of a discount Waha is to Henry Hub in the coming year+. Is Mexico or LNG supposed to absorb all this?

This right here. Something is going to have to change.

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10 hours ago, MadTrapper said:

Thoughts on the gas supply issue out in the Permian? Seems like there is a ton of associated gas with all the increased oil production. And now with Apache ramping up gas production in Alpine High, I'm really curious to see how much of a discount Waha is to Henry Hub in the coming year+. Is Mexico or LNG supposed to absorb all this?

It’s a problem. Bloomberg article I read the other day talked about Waha going to zero. Not sure about that, but I do wonder if it affects crude production. 

There’s a lot of infrastructure coming in service in the next few years. That will help differentials. 

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It’s a problem. Bloomberg article I read the other day talked about Waha going to zero. Not sure about that, but I do wonder if it affects crude production. 
There’s a lot of infrastructure coming in service in the next few years. That will help differentials. 
Nailed it. Shits bad right now but new takeaway and LNG export options will help. Best we can hope for is a minimal differential within 5 years. NGL value will continue to incentivize gas production.

Been lurking here for a while, not a trader but work in the industry. Currently in Oz doing elengee. Will try to keep tabs on what's happening.

Cheers

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With the collapse of MLPs, who are the buyers of mature conventional assets now? For example, Denbury has an asset package now of mature established CO2 floods in Mississippi. Reasonably steady 7,000+ bbl/d with minimal upside. The best thing is to buy and hold. It generates a pretty steady $5 million per month of free cash flow. Who are the buyers for something like that?

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With the collapse of MLPs, who are the buyers of mature conventional assets now? For example, Denbury has an asset package now of mature established CO2 floods in Mississippi. Reasonably steady 7,000+ bbl/d with minimal upside. The best thing is to buy and hold. It generates a pretty steady $5 million per month of free cash flow. Who are the buyers for something like that?
Nobody right now but they will generate s mlp type structure soon. It's gonna be different this time. ;)

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3 hours ago, PappyVanVinceYoung said:

With the collapse of MLPs, who are the buyers of mature conventional assets now? For example, Denbury has an asset package now of mature established CO2 floods in Mississippi. Reasonably steady 7,000+ bbl/d with minimal upside. The best thing is to buy and hold. It generates a pretty steady $5 million per month of free cash flow. Who are the buyers for something like that?

These used to just be private, cash-flow heavy companies that paid dividends/distributions.  They still are, to some extent.  The flexibility to increase or decrease the dividend depending on market conditions is what can enable them to survive during a downturn.  In that respect, public upstream MLPs were too rigid.  

I think patient private capital is the answer here.  Something cash-flowing so much is severely limited on the upside, but is also very protected on the downside.  Lots of cash flow with aggressive hedging, moderate leverage, and some low-risk development is a nice business model.  A pension fund or endowment should be all over that asset.  Buy the asset, pay out dividends when appropriate, re-invest cash flow when appropriate,  pay down debt when appropriate, lever up where appropriate, and finally, exit when appropriate.  It's not a tough business model but the lack of patient capital is definitely an issue.  

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