ADI - Adelphi Energy

[Hatchy]

http://www.foxbusiness.com/story/ma...hillips-scales-drilling-discloses-texas-buys/



"We're going to be a player in unconventional resources in a big way in the future," said Gallogly, speaking at ConocoPhillips' analyst meeting in New York.

ConocoPhillips has acquired a leading position in south Texas' Eagle Ford shale, buying up 300,000 net acres ahead of the rest of the industry at low cost, Gallogly said. The company also has a position in Louisiana's Haynesville Shale.

What a smart bunch they are over there at ConocoPhillips. That's surely how every company wants to play it, grab a huge acreage "at low cost". Somehow I think they might be finished getting their acreage, and have announced it now so that there's upward price pressure for anyone else trying to follow suit.

Nice to see that the Eagleford is a play that they're actively persuing in 2009, which is only one of 4 they're going after this year in the "unconventional play" sector - and all they're going after is Shale according to that graphic. So they must really think they can score a big hit from their Shale plays.

Would be nice for ADI to be teamed up a bit more directly with ConocoP, but I doubt we'd be considered on that big money stage.


Great bit of commentary yesterday Agent, loved the insight given when you pull it all together.

 

[Agentm]

conocophillips latest presentation announces their early entry into the eagleford.

its also part of the major exploration program for 2009

Good acreage positions in many of
best unconventional resource plays

• In 2007/08 added >750,000 net acres in
North American resource plays

• Optionality to sustain long-term organic
growth onshore

• Reducing 2009 spend in the most price
sensitive plays

Extensive experience in CBM, shale,
and tight gas reservoirs

2009 exploration spend focused in
Barnett, Bakken, Montney, and
emerging Eagle Ford shale play







[/url]

What a smart bunch they are over there at ConocoPhillips. That's surely how every company wants to play it, grab a huge acreage "at low cost". Somehow I think they might be finished getting their acreage, and have announced it now so that there's upward price pressure for anyone else trying to follow suit.

Nice to see that the Eagleford is a play that they're actively persuing in 2009, which is only one of 4 they're going after this year in the "unconventional play" sector - and all they're going after is Shale according to that graphic. So they must really think they can score a big hit from their Shale plays.

Would be nice for ADI to be teamed up a bit more directly with ConocoP, but I doubt we'd be considered on that big money stage.


Great bit of commentary yesterday Agent, loved the insight given when you pull it all together.

ConocoPhillips flaunts its exploration finds

ConocoPhillips put its exploration efforts front and center Wednesday in an apparent effort to debunk Wall Street’s view that the Houston-based oil major grows by acquisition rather than finding its own oil and gas.

That view was bolstered when ConocoPhillips slashed $34 billion in asset values late last year to bring them in line with oil and natural gas prices that plunged from lofty highs as the worst recession in decades gripped the globe. The company also is eliminating more than 1,300 jobs.

Some analysts said the write-offs exposed the potential weakness in ConocoPhillips’ prevailing growth-by-acquisition strategy.

Bernstein Research analyst Neil McMahon suggested in a recent report that ConocoPhillips consider spinning off its exploration operation.

“A truly exploration-focused spinoff would undoubtedly catch the eye of true exploration geologists, whereas ConocoPhillips may not,” McMahon wrote.
80% of capital budget

Chairman and CEO James Mulva and his executive team sought to rebut such views on Wednesday during a conference with analysts in New York.

The company expects production to be flat at 1.8 million barrels of oil equivalent per day this year, and ConocoPhillips cut its capital spending. But about 80 percent of that $12.5 billion capital budget will fund exploration and production. And of that, 37 percent will go to major ongoing projects while 36 percent is poured into exploiting new and existing resources.

Mulva stressed that the company has always found reserves on its own in addition to acquisitions but acknowledged that “we have not distinguished ourselves in terms of exploration success.”

The company isn’t shopping for more assets and aims to bring on another 900,000 barrels of oil equivalent per day over the next decade with its current portfolio.

Asked about acquisitions, he said: “We don’t need to do anything to be the company we want to be five or 10 years from now. We’ve got a lot on our plate.”

Larry Archibald, the company’s vice president of exploration and production, also acknowledged the analysts’ skepticism, noting that “some of you tough critics have challenged me by saying, ‘What exploration?’”

Strategic projects in the pipeline include engineering and design to develop the Shah natural gas field in Abu Dhabi, a partnership with Abu Dhabi National Oil Co., and a liquefied natural gas and coal bed methane business in Australia stemming from the company’s new joint venture with Origin Energy.

Startups planned for this year include projects in Indonesia and Qatar.
Additional acreage

Archibald noted that the company has gained acreage for exploration as well in the Chukchi Sea off Alaska’s northern shore, in the Gulf of Mexico and in U.S. natural gas shale.

He said ConocoPhillips shied away from “feeding frenzies” at high-profile shale plays where some companies rushed in and spent $25,000 or more per acre amid the pre-recession boom in gas production. Those plays included the Haynesville in East Texas and northern Louisiana, and the Marcellus in Pennsylvania, New York, Ohio and West Virginia.

He said ConocoPhillips will keep spending in more established plays, such as the Barnett shale near Fort Worth, and the lesser-known Eagle Ford in South Texas, where the company has a leading acreage position.

“We’re going to be a player in unconventional resources in a big way in the future,” said Jim Gallogly, executive vice president of exploration and production.

ConocoPhillips also is increasing deep-water presence in the Gulf of Mexico as well as Bangladesh, where little exploration has occurred.

The company’s spending pullback is showing up in some higher-cost operations, Archibald said, including Canadian oil sands operations. And with natural gas prices below $4 per million British thermal units and a glut of natural gas in inventory, it has cut its rigs to 40 from 60.


hatchy

TCEI is 100% tied up with COP.. since moving away from initially mobil to later on burlington, TCEI found a very good region, initially they were chasing an edwards play, but burlington (pre conocophillips buyout) found something amazing in kunde 1. and that discovery well was the catalyst for many years of exploration and experimentation in laterals and different completion processes. the rock is very overpressurised and has 60 gravity on the condensate- it doesnt get any better! plus its about 80% condensate to gas in the return.. amazing stuff..

TCEI and Conocophillips have combined in their efforts in all wells. There is no doubt the current wait on the live oak wells is not for any other reason than to make sure all 3 completions we have to undertake on our laterals (Kennedy-Kowalik-Weston) will have the benefit of the latest understandings and techniques undertaken by COP and by anadarko (mr fluor does sit on the board of anadarko)

TCEI has a direct relationship with COP, so by default ADI is also involved there, not getting direct knowledge, as that would not be allowed.. but TCEI is allowed access and therefor ADI is absolutely benefiting by default from the TCEI/conocophillips jvp and sharing of data..

small minnows in some good acres.. with 3 good laterals all in the region needed.. we know these operators like conoco, pioneer, petrohawk,anadarko and apache are all going places on the shale.. and we are right in the thick of it and totally surrounded by conoco acreages..

looks good for the ADI share if success is made from the 3 laterals and a few more wells go in to prove up all the acreages..

in dewitt county the weber well has started krause.. its practically next to the hooks well that conoco have been working on there for a good years or more.... so pioneer and weber and conoco have all got eagleford action there, in karnes its conoco with the bordovsky well and our TCEI jvp with the 3 laterals and one vertical..

in live oak its all TCEI and conoco, they took the lot, pioneer managed one lateral, but difnt get much acreage around it, TCEI blitzed them big time..

EKA announced the sugarloaf 1 well will now be considered for a sidetrack.. great news there.. looks like all money invested in all wells still have plenty of options and all have massive upside potential in terms of generating significant amounts of revenue..

imho long days but early days still.. i am in until conoco pulls out.. (and that aint happening in 2009)

 

[jestex12]

Agentm,

Your last two posts were great. Great information on how these companies are positioning themselves like chess pieces each looking for that checkmate. Your prospective was also very well versed. Seems like COP have very nicely padded there porfolio's!! As for ADI investors seems like things are starting to pan out in there favor imho. Keep up the great posts Agentm!!

 

[jestex12]

Agentm,

I'm sure you saw this presentation. But, for those who are skeptical as to the significance of the southern Texas play should take a look at this presentation from 11/24/09 in particular slide's 8, 9, 18, 20, & 21.

http://www.auroraoag.com.au/docs/2008/AUT20081124.pdf

 

[Agentm]

Operations Update

TXCO has significantly reduced drilling in light of current commodity prices and liquidity constraints. It is moving ahead with a limited drilling program, focused on high-impact projects, particularly the Maverick Basin's Pearsall and Eagle Ford shale gas resource plays. It currently has two rigs operating.

In tests following a multi-stage fracture stimulation, the Briscoe Catarina West 1H (50 percent working interest through completion) flowed at rates as high as 6 mmcfde from the Eagle Ford with a high liquids content. On the Pearsall play, a multi-stage frac is under way on the San Pedro Ranch 2 (50% WI through completion) following mechanical delays. Targeting the Georgetown formation, the Burr C 7-231XH (50% WI) flowed at rates as high at 1.9 mmcfe with high liquids content in tests.

Management Perspective

"TXCO's leasehold assets have excellent prospects but currently we face extraordinary challenges following the unprecedented collapse in oil and gas prices that occurred late last year," said Chairman and CEO James E. Sigmon. "We are moving ahead, within current financial constraints, to drill the Eagle Ford, Pearsall, Georgetown and other highly prospective plays. We're taking aggressive and prudent actions to re-set financial obligations of the Company and to our stakeholders. We also are continuing our strategic alternatives review. Our goal continues to be converting the extensive potential of our large acreage position with multiple plays into stockholder value."

 

[Agentm]

conoco transcripts from COP - ConocoPhillips Analyst Meeting

http://www.conocophillips.com/NR/rd...1E41942B98/0/2009analystmeetingtranscript.pdf

John Carrig - ConocoPhillips - President, COO

I wanted to mention the new play that we're working, Eagle Ford shale in South Texas. We've accumulated over 300,000 net acres. The key here is to be one of the first, the people who discovered the play instead of one of the people who come in the back end and pay extra for the acreage. Larry's going to talk more about that play in the exploration section. Strong positions in many of these top resource plays in the Lower 48.


Larry Archibald - ConocoPhillips - VP - Exploration

We also do a lot in onshore North America, about 190 wells there, a very successful program. We're going to talk about a few successes but if I had any disappointments it's a few of the bigger growth opportunities. We drilled some nice wildcats, had some nice discoveries in '08. Some of the bigger ones slipped into '09. The good news is we're drilling some of those now and we'll talk about some of those programs.

Really the big news for me in '08 was the acreage position that we built up in some high impact plays. Starting out in North America, we invested over $1 billion in some several high impact plays, notable the Chukchi Sea. We'll talk about that. Deepened our position in the Gulf of Mexico, particularly in the emerging Lower Tertiary play. And many of you don't know it but we continued to quietly pick up large acreage positions in the best North American resource plays and we've tended to shy away from the feeding frenzies in the better publicized ones but we'll talk to you about some of those positions.

Before we get to the Big E I do have to mention briefly the North American resource plays, although we're going to spend less money on them. A lot of you don't realize what a huge footprint we have in many of the best plays in North America. Jim already mentioned that San Juan Basin that we are the biggest player, that's the mother of all CBM plays, only rivaled by our new position in Origin. But in the shale gas plays we have some impressive positions. We're going to continue to spend some money in exploration in several of the best established ones.

In 2009, we'll continue to spend money in the most profitable hearts of the Barnett, the Bakken in North Dakota which is more liquid, Montney in Canada, and Jim mentioned the Eagle Ford. While people were making very expensive, highly publicized moves in Marcellus and Haynesville and other places, we were quietly putting together a few hundred thousand acres in the emerging Eagle Ford play at a few hundred dollars an acre.

We didn't say much about it but now that our competitors, PetroHawk and Apache have bookended our positions and making a lot of public announcements about the good rates they're getting out of their horizontal wells, we're coming out of the closet on that one. We also have some smaller HBP positions in some of the plays like the Haynesville, but again, chose not to join the feeding frenzy for high priced acres last year. Exciting position, we've got some great legacy positions. Some of this acreage we'll own for a long time and we're going to be a player in unconventional resources in a big way in the future.


and for the people who dont get what the giant conocophillips are talking about..

its pure and simple really.. they are talking about the exact same play that adi is currently exploring. with TCEI a jvp partner with conocophillips as well as having a small jvp called sugarloaf AMI with adi.

its all happening in 2009 for them and i would hope that adi also shares some success in the eagleford.

 

[Hatchy]

AgentM,
Thanks for the research over the last few das, very interesting.

Having a read of that transcript - it reminds me of how Steve Jobs talks about his next greatest product - they are full of enthusiasm about the eagleford... that's so good to see.

I don't get why some people are selling down at this point. We may see 5c today. Wish i'd held out when I topped up at 30c.

It seems as though all the Giants in oil and gas are putting aside projects just to be able to explore the eagleford. This surely has to come to the attention of the market. I guess small caps will just continue to be hammered.

I don't think it matters for those holding long term. In my opinion we'll see ADI firm up it's position in texas, but will spend some cash doing so, which hopefully will be made back if the flow rates of Kennedy become what the neighbours have. We may still not see price movement though, but let it flow let it flow let it flow.

I hope that 4mil from Yemen is enough. I know I didn't have the cash to support this recent raising. Did anyone else?


Hatchy

 

[Agentm]

AgentM,
Thanks for the research over the last few das, very interesting.

Having a read of that transcript - it reminds me of how Steve Jobs talks about his next greatest product - they are full of enthusiasm about the eagleford... that's so good to see.

I don't get why some people are selling down at this point. We may see 5c today. Wish i'd held out when I topped up at 30c.

It seems as though all the Giants in oil and gas are putting aside projects just to be able to explore the eagleford. This surely has to come to the attention of the market. I guess small caps will just continue to be hammered.

I don't think it matters for those holding long term. In my opinion we'll see ADI firm up it's position in texas, but will spend some cash doing so, which hopefully will be made back if the flow rates of Kennedy become what the neighbours have. We may still not see price movement though, but let it flow let it flow let it flow.

I hope that 4mil from Yemen is enough. I know I didn't have the cash to support this recent raising. Did anyone else?


Hatchy

whats interesting about these wells in this formation is that they appear to be capable of very long sustained flows. they will decline as any well does, then flow far longer than any chalks well ever has. this point has been mentioned many times in the AUT presentations.

all operators with eagleford exposure have got their 2009 plans set in the eagleford. pioneer, apache and petrohawk.. all looking at it and exploring its characteristics. COP describes their position as being "bookended" with pioneer and apache and petrohawk all neatly around them.. we are literally in the mid section of those players. and totally surrounded by cop and tcei.

I agree the US$4 mill or AUS$6 mill is plenty for adi.

there is still more work to be done in yemen on exploration, and plenty of operators are finding yemen very attractive and want some avenue to get exposure in there..

ln terms of todays activity, $10k in shares today thus far, not much at all.. and obviously the person exiting is getting a whipping.. the buyers are doing a great job.. to exit in no news territory will often pay you dearly imho..
small trades and very little turnover in adi shares this year really.. this year so far 142 trades for $173,000 in value.. not really seeing much buying pressure on the adi share,,

imho the progress of adi is best summarised as this..

adi has drilled 4 wells, 1 vertical and 3 horizontals.

the vertical is a candidate for a lateral as it did flow from the eagleford but managed to get water from the buda,,

the kennedy well is totally cased and the formation sits behind cement. a frac is being designed.

weston is also totally cased and cemented, and is yet to be opened up.

kowalik, is open hole and flows.. is said to be damaged, and these are the flow rates.. Initial production rates of 4.2 mmscfe/d were observed from this unstimulated well with rates of 1.4 mmscfe/d recently achieved

2 laterals sitting there waiting for a frac, one well flowing but damaged. and also expecting some form of stimulation there..

its been said by all partners that they can see potential upsides in all the wells, and i have not seen any eagleford wells flowing open hole, all are being fraced with 10 or 12 stage multifracs.. so its likely there is some truth in the potential for these wells to flow at much greater rates..

but its great to see conoco being the last to come clean on the eagleford.

 

[hashertu]

Agentm. Slightly off topic.
Can an operator start drilling in Texas before getting an RRC approved drilling permit? Drilling in this sense means drill bit making a hole in the ground rather than surface preparations.
TIA

 

[Agentm]

is possible to drill without a permit?

if you did it, and struck oil or gas and then sold it on the market you would be charged with the various criminal offenses that come with it.

the purpose of the process is to firstly have a lease signed over to you, then you have to get a permit, and once the RRC looks at all the possible complications and sees that all the correct documents are in order, it will approve the permit. things like ground water has to be protected so any one contemplating drilling without rrc compliance would be in severe trouble for sure..

to drill without one would be something else, if you could get a drilling outfit to do it would be a task in itself, and to think you could get away with it with all the paperwork that comes with sales to the pipeline, imho it would be somethiong that you could not get away with for long.. it could also mean that the completed well would be awarded to the landowner as a penalty and if the operator had a leased from you, it would in all likelihood forfeit its capacity to stake any claim to it. i think any sales from the well would also be paid back to the landowner 100%..

very risky to do, i doubt if anyone would attempt it..

 

[Agentm]

from the st mary presentation from the Howard Weil 37th Annual Energy Conference yesterday.

they have a JVP with TXCO and Anadarko as well as their own acreages there.

still as upbeat on the eagleford. the recent well tested is about 2500 feet, similar rates to the TCEI/COP wells a few miles away

 

[estseon]

Hi agent,

just wondered if it could be clarified a bit.

At its peak, Kennedy (the only Block B well in the Shale so far as I am aware - ignoring SL-1) produced 25 boepd per 100ft. That was calculated equating 10,000 cu ft of gas = 1 Barrel.

That production rate has tailed off significantly - wrong fracc design.

If the horizontal referred to in the presentation paper is 2,500 ft long and tested at 6mm, that is almost spot on that initial flow at Kennedy: 24 boepd/100ft.

Presumably, they used the right fracc design and their well has remained open.

However, we have not seen any other Eagleford disclosed flow results although you refer to TCEI/COP wellS. Marlene Olson is an Eagleford vertical that EME has an interest in but nothing has been reported. So, are you saying that COP/TCEI has an Eagleford fracc design that works?

Could a re-work and new multi-stage fracc of Kennedy be the next TCEI Block B operation?

 

[Agentm]

Hi agent,

just wondered if it could be clarified a bit.

At its peak, Kennedy (the only Block B well in the Shale so far as I am aware - ignoring SL-1) produced 25 boepd per 100ft. That was calculated equating 10,000 cu ft of gas = 1 Barrel.

That production rate has tailed off significantly - wrong fracc design.

If the horizontal referred to in the presentation paper is 2,500 ft long and tested at 6mm, that is almost spot on that initial flow at Kennedy: 24 boepd/100ft.

Presumably, they used the right fracc design and their well has remained open.

However, we have not seen any other Eagleford disclosed flow results although you refer to TCEI/COP wellS. Marlene Olson is an Eagleford vertical that EME has an interest in but nothing has been reported. So, are you saying that COP/TCEI has an Eagleford fracc design that works?

Could a re-work and new multi-stage fracc of Kennedy be the next TCEI Block B operation?

estseon, the questions you ask are difficult for an investor to know.

TCEI/conocophillips in live oak have the following wells drilled.

Kunde 1, Kunde 2, Kunde 3, Baker 1, Baker 2, Marlene Olsen, Olsen Baker and lastly Lasca Butler Searcy.

Now of them EME have been involved in 5 wells. and marlene olsen, which is a vertical well testing the eagleford, was fracced months ago, i knew about it in january. but as you know the shareholders are not updated in the UK on that at all, i think on the asx you would find reporting is required on things like fracture stimulation of wells. you could also draw a conclusion that EME is not being informed of events on their wells at the moment. I know of other operational things that also are not being reported by eme.. my own view is that eme is limited in their knowledge of operations in live oak currently as i cant comprehend why an update wouldnt be made if they had the information in hand about the potential production from the vertical well or whether they will put a lateral into that well in the future....

regarding the frac on kunde 3, it was on an 1800 foot section of the well. if its on rock that is not naturally fractured, then its promising, but the result is to what many competitors are getting, but what is interesting is that petrohawk and swift a few weeks ago as well as apache and anadarko are claiming very high rates off their multi stage frac designs. i have not seen the completion reports on kunde 3 so i cant comment on the current frac design, i have seen the completion reports on quite a few of the competitors, and if conoco is following their path i have to see any evidence of it, and if conoco is changing their views on how to frac their wells we will be the last to know.

one thing is certain, TCEI/conoco is nearly replicating some of the very impressive results of their competitors and we have yet to see any announcements or evidence of them using multi stage frac techniques as well.. conoco at the moment is completely in a different ball park when it comes to frac processes.


the rigs have completed 2 wells for conoco this week, and one will go to bordovsky and finish the lateral to the east of our acreages, and the other will drill one of the eskew wells on live oak.

the new pipeline is going in everywhere in live oak, and i know kunde 3 is being worked on a lot, so its not just on the sales pipeline and producing, there must be issues there at kunde 3 imho..

still a very high risk high reward investment, and the obvious thing needed is for jvp to move forward on the laterals. but when??

my view is that they are getting closer to understanding this formation and swift have really cracked it open a few miles away in mcmullen county, 10.4 mmcfpd/e, and keeping a close eye on that one as well as the petrohawk well next to it

the delay in opening the laterals up right now are very much justified. i think the wait will increase the probability to deliver commercial success there..

 

[estseon]

Thanks for your comment, agentm.

The February production reports filed by Burlington on RRC show Marlene producing at about 2/3rds the rate of Kunde 1, their original vertical. We don't know whether that is a result for the full month but there was no condensate on site reported for the beginning of the month, so possibly not. EME advised in its Interims (mid December 2008) that testing on Marlene would be the lower 2 zones, both described in that report as Eagleford. EME has said nothing about this well since that interim report. It is possible that EME's interest in that well may have been terminated when the TCEI agreement was terminated (reported 9 January).

 

[Agentm]

pioneers recent howard weil presentation

again they mention the work they are doing, with a frac of their well in dewitt county in april 09, and they mention the pending frac of the petrohawk wells in lassalle and mcmullen

 

[jestex12]

Agentm,

Like your last post. Looks like the Eagleford is showing how expansive it is. The potential for my area in Dewitt is looking better, and better every day!!! Once again thanks for the coverage Agentm!

Jestex

 

[Agentm]

hey jestex..

it does look like dewitt is going to be a busy place for the eagleford, with pioneer on side of the fault and conoco and everyone else having a lot of the region north of it....

some pictures of the live oak wells conocophillips are drilling and completing

lasca butler searcy

kunde 1

kunde 3

kunde 3 flaring earlier this month as operations continue on the well

 

[Lucky_Country]

Still here just waiting on news and slowly accumulating.

I would like to hear what they plan to do with there existing well and in what kind of timeframe they intend to do it in.

I have been watching a few shares with SPP they all seem to be selling at very low prices with directors participating they must surely know the bottom of the cycle and are snapping them up at bargin prices.

ADI management have put there cash forward Im sure they are not in the business of good money after bad.

All taking time but Im sure we will be rewarded definately more upside than downside here.

 

[estseon]

Brilliant photos. I haven't seen a sky like that since last year.

At some time, the operator will be unplugging the bottom 900 ft of Kunde 3 and flowing it with the recently fracced top 1,800 ft. EME should report revised flow figures once they have done that.

 

[Agentm]

eme release today

RNS Number : 8456P
Empyrean Energy PLC
31 March 2009

31 March 2009
Empyrean Energy PLC
("Empyrean" or the "Company"; Ticker: (EME))




Salary sacrifice and grant of options


Empyrean today announces that certain directors and management have agreed to take 30% of their current salaries in equity for the next 12 months. The move to take a percentage of salary as equity has been initiated by the directors because they believe that the Company is presently undervalued. The foregone salaries will be converted to equity at the same price as the recent capital raisings at 3p. The amount of foregone salary totals GBP84,960 and along with the Company's GBP900,000 raised in recent placings puts the Company in a stronger financial position to development its assets. The conversion to equity will result in the issue of 2,832,000 new ordinary shares. These new shares will also be subject to an orderly market arrangement with Blue Oar Securities for a period of 12 months.


The salary to equity conversion has been performed under existing share
allotment authorities, and the new shares issued will equate to 2.94% of the
enlarged issued share capital of the Company following allotment.


The company has also resolved to grant options over 3,700,000 ordinary shares of 0.2p each in the Company to its management. The options will be granted with an exercise price of GBP0.04 per share. All options will expire 3 years from the date of the grant.