Permian News of General Interest


#21

Forbes article summarizing which operators are boosting spending in Permian.

Link


#22

Wade, interesting article, but their are some glaring omissions. Maybe the reporter focused on larger companies. For example, LUXE Energy (who has my lease) is drilling just north of I-20 in Blk C18 Section 3or4, and is looking at more plans to drill elsewhere. I hope they do…would like to see an article about them. All the best, and thanks for all your info on this site. navgoat


#23

Fred- Agree there are some omissions.

Several items of interest in link. 1) Energy Transfer and 4 other companies are constructing a new 30" oil line from the Midland Basin to Houston; 2) Vista is going to add an oil loading facility at its frac sand rail terminal in Pecos and says it can ship 400,000 barrels per month.

Link - good email newletter to subsribe to that is free


#24

IMPORTANT OIL AND GAS INVESTOR ARTICLE. The link below is to a June 2018 article called Productivity Analysis which analyses the Permian (and other plays) operators based on production reports and compares them on gross revenues per well, and gross revenues per lateral foot. Very interesting, and confirms a substantial disparity among operators on who can wring more out of the rock. Some of that disparity can be explained by the fact some operators are just in better areas. In the Delaware, Conoco, EOG, and Energen are 1, 2, 3. Concho, surprisingly, is 9th.

This may require a subscription.

Link


#25

WTG is building a gas processing plant in Glasscock Co., and Cogent is expanding their plant in Reagan Co. next to the Big Lake II plant.

Link


#26

BLM auction brings $95,000/acre. Not kidding. Leases are for 10 years with a 12.5% royalty, though.$95,000 per acre


#27

Permian basin lease auction nets nearly $1 Billion.

Permian oil auction raises close to $1 billion

Assets in NM sell for $95,001 an acre

By Kevin Crowley and Ryan Collins Bloomberg

The price to access unexplored shale assets on the New Mexico side of the Permian Basin soared to $95,001 an acre in a federal government auction, a record high for North America’s biggest oil field.

The state’s previous record was $40,001 an acre set in December, according to a statement Thursday by the U.S. Department of the Interior. Overall, the two-day auction saw bids on 142 parcels of land and raised $972 million, more than the whole of 2017 and double the 2008 record.

Federal Abstract Co., a firm in Santa Fe that bids on behalf of anonymous investors, was listed as the record bidder, according to the U.S. Bureau of Land Management. The company, which paid $387.4 million in total for rights to 17 pieces of land, didn’t immediately respond to a phone call seeking comment.

OG Resources Inc., Devon Energy Corp., ExxonMobil Corp. and Chevron Corp. would be “logical buyers” of the tracts because they own nearby drilling rights, Scott Hanold, an Austin-based analyst at RBC Capital Markets LLC, wrote in a note Friday. Contiguous leases are essential for drilling long, horizontal wells.

The auction provides a rare peek into how oil producers value drilling rights in the Permian, most of which is in Texas, where land and minerals are privately owned. Record prices show that despite a recent slowdown in activity because of pipeline shortages, explorers view the Permian’s stacked layers of oil-soaked rock as a unique long-term asset.

“We were expecting high bids, I can’t say I was expecting $95,000” an acre, said R.T. Dukes, Lower 48 upstream research director at Wood Mackenzie Ltd. “The Permian is the center of the oil universe when it comes to investment right now and just because of a few pipeline constraints that’s not going to change.”

The New Mexico auction’s high price is “tremendous positive read-through” for Permian oil stocks, which have an average valuation of about $32,000 an acre, according to analysts at Seaport Global Securities LLC.

The $95,001 price tag for the drilling rights is about 16 percent higher than what Concho paid earlier this year for RSP Permian Inc.

On the day that deal was announced, the amount generated heartburn for Concho investors, who sent the stock tumbling 10 percent.

The auction was competitive, with multiple rival bidders pushing up the price of the New Mexico acreage, Dukes said.

“This could be a company that has another thousand or two (thousand) acres around it that they really can’t drill without having this acreage,” he said.

//////////////////////////////////////////////////////////////////////////////// More good news for Reeves county. I said $50,000/NMA was coming…and here it is for some.

ol’ Lawrence in Verhalen, Reeves county, Tx
:sunglasses::rofl::ribbon::heart:


#28

And people think Im crazy for not wanting to sell my 1% ORRI for 2 mill. on 2330 acres really that I valued at 20 to 50 mill hmmm. !!!


#29

Lucid signs deal with Marathon to handle their gathering system in SE New Mexico.

Link


#30

This is my first “original” posting, so I hope I am doing the correctly.

I just found this article about how the City of Portland, Oregon, is installing electric power turbines in it’s city water pipelines. I wonder if this would work in oil, gas, and water pipelines in the oil fields?

https://www.upworthy.com/portland-now-generates-electricity-from-turbines-installed-in-city-water-pipes?c=upw1


#31

Article about trying to fix highways in Permian, especially 285.

Highway work


#32

Matador acquiring 8400 acres in Lea and Eddy Counties.Matador acquisition


#33

Charles–

I would imagine it only makes sense where there is a lot of gravity or natural pressure. Otherwise, you are spending more energy to turn the turbines than you are going to get out, according to my vague recollection of physics.


#34

Please feel free to post items in this group.

MRT reports for Sep. 23.

MRT Wildcats


#35

Pitchfork Ranch in Lea County sells to oil investors. Rumors are that Loving ranchland sold for hundreds of millions because of the water rights it had.

Pitchfork Ranch sale


#36

Technical article has pictures showing how much variety there is on how the rock fractures

Hard to predict


#37

Stock analyst article (grain of salt here about the companies it discusses) talks about big runup in bonus prices

Big bonuses


#38

Matador is company who paid up to $95,000/acre for BLM lease

They must have really wanted that lease


#39

Carlyle commits another $620 million to Diamondback

link


#40

Wade -

I’ll keep an eye out on how successful Portland’s experiment is.