ADI - Adelphi Energy

[Agentm]

http://seekingalpha.com/article/170934-swift-energy-co-q3-2009-earnings-call-transcript?page=-1

Finally, as of yesterday, we entered in to a join venture agreement in South Texas to exploit and develop the Eagle Ford shale. This particular transaction is very strategic for us. We’ve taken a portion of our Eagle Ford shale position in the AWP area, and teamed up with Petrohawk, a well respected shale resource player to develop jointly 26,000 acres. We will provide the important details of this arrangement later in the call.

.........

During the third quarter, we advanced preparations to drill horizontally in the Eagle Ford shale for the fourth quarter, and both in our newly announced joint venture as well as the undeveloped acreage outside of the venture, we plan to drill additional wells. The exceptional value this play brings cannot be ignored. We’ve analyzed the locations and the results of wells that have been by others in the industry, and we believe our acreage remains highly prospective, particularly in the AWP area and certain other areas of South Texas where we have sizable acreage positions.

We will be developing this play, beginning with wells drilling in the fourth quarter of this year and into 2010. The most turbulent portion of this particular economic downturn appears to be behind us. However, we appreciate how quickly the environment can change. We have managed our business prudently and we’ll be cautious as we increase activity levels in the fourth quarter of 2009 and into 2010.

..............


Finally, we announced yesterday a joint venture agreement with Petrohawk to develop an approximate 26,000 acre portion of our Eagle Ford shale acreage in McMullen County, Texas, in and around the AWP field. At least one well will be drilled to test the Eagle Ford shale horizon in this 26,000 acre prospect during 2009. We currently expect our rig to remain active in the area during 2010.

The company will retain a 50% interest in the approximate 26,000 acre prospect area, which covers leasehold interest, beneath the Olmos formation and inclusive of the Eagle Ford shale formation, extending to the base of the Pearsall formation.

Swift Energy received approximately $26 million in cash consideration upon closing of this agreement. Petrohawk will also fund approximately 13 million of capital expenditures on Swift’s behalf within the first 12 months of the joint venture.

Presently, Swift Energy expects to utilize this entire 13 million amounts to cover drilling and completion cost of horizontal wells targeting the Eagle Ford shale in the joint venture area. If the full amount is not utilized during the first 12 months of this agreement, the difference will be paid to Swift as a cash consideration.

Petrohawk will serve as an operator during the drilling and completion phase of the join development, and Swift will operate the wells drilled once they’ve entered the production phase, subject of course to the terms of the agreement.

The company is also planning to spud a horizontal well to test the Eagle Ford shale on its undeveloped acreage position outside of the joint venture. As with all of our operations, we will provide results from drilling activity in this joint venture during our regularly scheduled quarterly conference calls or in the event that any results are material in nature.


........................

We recently entered into a joint venture agreement to accelerate the development of a portion of our AWP acreage believed be prospective for the Eagle Ford Shale.

We plan to spud a horizontal Eagle Ford Shale well within this joint venture during the fourth quarter. We will also begin testing the Eagle Ford Shale on our acreage outside of this joint venture area this year. A secondary equity stock offering and closing of our South Texas joint venture have allowed us to significantly improve our balance sheet and reduce our borrowings on our credit facility.


......................

Leo Mariani - RBC

Curious here as to while you got the decision to go out and JV 26,000 acres, you had talked about having a bigger position, roughly 90,000 acres that are prospective, just curious as to how you got the decision to get out there and just do a portion of this versus doing a bigger piece.

Terry Swift

Clearly, we do have a very significant acreage position in South Texas, both for the Olmos and prospectively as well as the Eagle Ford Shale. The Eagle Ford Shale is a homogeneous type of resource play, but even then there are sweet spots in this play and through the drilling programs that are going on now and will go on into the next year, folks are going to find some really nice places to drill out there and some areas that maybe aren’t as good as others. We decided that was strategically important for us to accelerate our drilling in this play and to go into the play with a partner that we thought would bring exceptional technical expertise to us as it had already had been a well respected shale player.

As to why, we ended up with just 26,000 acres, we do want to keep a bunch of it for ourselves. We felt that strategically this was the right type of deal, it worked well with out partner. We’ve got acreage in and around it, that’s a 100%. We got acreage in other parts of the play, that’s a 100% . We are looking forward to with Petrohawk on this 26,000 acres and teaming up with their technical expertise and expanding then expanding beyond this play area where we’ve done the deal.

Leo Mariani - RBC

Okay, are there any other sort of significant terms for JV like maximum or minimum wells that get drilled in a year and this 100% for the 50-50 JV where either of you has a right to propose a well?

Terry Swift

Yes, we each the right to propose a well. There is no minimum or maximum. We do have one obligation well that has to be drilled. We are in the planning mode to begin that well here within the next 30 to 60 days. Each party has a right to propose wells. We spend a lot of time working through the agreement terms on both sides and we think we’ve ended up with a very good agreement.

Leo Mariani - RBC

Any estimate in terms of ASPs for that first well out there and what it might cost you.

Terry Swift

We going to hold back on some of that information until we actually get the first well spudded. It should be clear that the first several wells in here, we are going to conduct some more science, get some core data that’s not present in the area because we want to optimize the results out here and Petrohawk has worked closely with us on the science side. We are in complete agreement that the first couple of wells will probably be a little more expensive than the most that subsequently come forward.

Bruce Vincent

Clearly, initially we are going to drill a pilot hole, we are going to take cores, and we’re going to run a full suite of logs to understand the geology better. If you look at what Petrohawk is doing in the Hawkville field. The reason they are interested in our acreage is they believe and we believe too that the same trend runs wide underneath AWP. If you run the other side, if you look at the Pioneer well, we are right smack in the middle between the Pioneer well and what the Petrohawk has been doing. We would fully expect both, looking at Petrohawk’s experience and our experience at driving the cost down in the Olmos horizontal drilling, it should drive those cost down as you start doing repetitive drop drilling.


..........


Unidentified Analyst

When you look out at your Eagle Ford program in 2010, can you kind of put a range as to how many wells you guys think you can drill either on your own or with the JV?

Terry Swift

We actually won’t come out with our complete budget and presentations until the February analyst meeting, and that’s where we go through all that in detail. However, we are clearly looking at that. Within the venture in AWP with Petrohawk, we do expect the rig to continue to run all year drilling Eagle Ford wells in that venture.

There maybe a slowdown initially between the first couple of wells in order to get some good data, and we will be spotting those wells across the acreage. It’s a big position, so we’ll have those first several wells be more like appraisal wells before we go in to what we hope to be a manufacturing mode. I think it’s reasonable to expect a rig to running there all year.

Additionally, I think I our other Eagle Ford positions, you’ll see us stepping around the play. As we’ve noted, several of the positions we think are extremely highly prospective, and then there is some other areas we are looking at drilling of others, and we may stay away from that and watch the results of others before we move in there. You could expect us to maybe have a rig running in the other parts of our acreage throughout all 2010.

Bruce Vincent

Yes, but we could easily be moving that rig back and forth between Olmos and Eagle Ford. You are not going to distinguish much between that. One of the real advantages of AWP is you are tied right into the market so you can get stuff on production immediately. Some areas have more gas marketing and distribution issues, and so you’ll need to both evaluate the acreage and understand the performance that you can get, and then deal with market access. Sometimes that takes a little so don’t want to drill a bunch of wells and keep them shut-in.

Unidentified Analyst

The right way to think about it though is, you guys should probably have at most one horizontal rig that you guys are operating in South Texas next year?

Terry Swift

We are likely to have one horizontal well drilling program that is on 100% Swift acreage, whether it is Olmos or Eagle Ford, other rig on the joint venture acreage.

 

[Agentm]

elpaso also spoke a few minutes ago about their recent well in the eagelford


http://ca.sys-con.com/node/1171296

-- $0.23 adjusted diluted earnings per share (EPS) versus $0.35 in 2008.
A sharp increase in Pipeline Group earnings was more than offset by lower
natural gas and oil prices.
-- 2009 adjusted earnings per share guidance raised to $1.15 to $1.20.
-- Third quarter 2009 reported EPS of $0.08 per diluted share versus
$0.58 in 2008. A sharp decline in natural gas prices in the company's
Exploration and Production (E&P) business was the major reason for lower
reported earnings.
-- Third quarter 2009 Pipeline Group earnings before interest expense and
taxes (EBIT) rose 17 percent from the third quarter of 2008.
-- Third quarter production averaged 732 million cubic feet equivalent
per day (MMcfe/d), including 71 MMcfe/d of Four Star volumes. Strong
domestic results, particularly from Haynesville Shale activities, offset
delays in Brazil's Camarupim project.
-- The company announced that its first Eagle Ford shale well was
successful and that it had increased its acreage position to 112,000 net
acres.


"I am very pleased with our third quarter financial results and the solid execution by our Pipeline and E&P businesses," said Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation. "We placed the Piceance Lateral Expansion project in service during the quarter -- on time and on budget, while at the same time advancing other projects in our committed backlog as well as new growth opportunities. In E&P, we continued to generate excellent results from our Haynesville Shale program and have ramped up our activity level to five rigs. Importantly, we are transferring our Haynesville expertise to the Eagle Ford Shale, where we are off to a great start. In summary, we are generating consistent results that will provide sustained value creation for our shareholders."


El Paso also announced that its first Eagle Ford shale well in La Salle County, Texas was recently drilled with a 4,000 foot horizontal lateral and completed with a 16-stage frac. The well is still cleaning up with volumes steadily increasing. The current flow rate is approximately 6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi. The company has almost doubled its lease position to 112,000 net acres. El Paso will maintain a one-rig program as it progresses in this new play.

 

[Agentm]

so swift and elpaso announced their well programs and intention

this from pioneer a few minutes ago

http://austin.dbusinessnews.com/viewnews.php?article=bwire/20091103006794r1.xml

Pioneer Natural Resources Reports Third Quarter 2009 Results

Recent highlights include:

Scott Sheffield, Chairman and CEO, stated, "Despite a substantial reduction in drilling activity for 2009, our high-quality assets delivered production growth of 7% during the first nine months compared to last year, and we continue to expect full-year production growth of at least 5% per share. We remain committed to a free cash flow model, with excess cash flow being used to reduce debt this year."

"Improving oil prices and our strong derivative positions support operating cash flow forecasts of approximately $1 billion in 2010 and $1.4 billion in 2011. As a result, we are aggressively ramping up our drilling program in the Spraberry field and will continue our successful oil development program in Alaska. We have also expanded our Eagle Ford Shale drilling program where we hold 310,000 gross acres in one of the premier shale plays in the U.S. With this drilling program and the expiration of our 5 MBOEPD volumetric production payment obligation, we expect to once again generate quarterly production growth in 2010, while preserving our free cash flow model."


Operations Update

In South Texas, Pioneer's daily production for the first nine months of 2009 rose 4% to 76 MMCFPD versus the prior-year period benefiting from its strong 2008 Edwards Trend drilling program. The Company also recently announced a significant discovery in the Eagle Ford Shale play where it holds 310,000 gross acres overlaying the Edwards Trend. The Sinor #5 well flowed at an initial rate of approximately 11.3 MMCFEPD of gas (approximately 8.3 MMCFPD of liquids-rich gas and 500 BPD of higher-valued condensate). The liquids-rich gas contains 1,200 British thermal units per cubic foot. Pioneer now plans to continuously operate one rig in the play through 2010 and test the benefits of longer laterals and additional frac stages. The Company is drilling its next well and will evaluate a further rig expansion as additional drilling results are known. Pioneer is also exploring a joint venture strategy to accelerate development of its extensive Eagle Ford acreage position.



all great statements from 3 fine companies, run by real genuine and well respected oilmen



take note of this if you think your investment in the eagleford is sound, one thing to really keep a close watch on is size of the play..

conoco, swift, pioneer and many others are looking to farm out

right now i see two small cap aussie participants in the eagleford with substantial acreages and one is actively expanding its acreages, and at the same time we see the monoliths of the industry in texas, all very capable of finding cash and managing some of their exploration positions.. all with eagleford exposure and some with extensive experience in the well designs, but they are all saying they want to farm it out..

just a word of caution, i think everyone knows what i am talking about.. but i think you should be very clear on what a small cap company in this play is capable of exploring and what costs it would be to them to expand into these plays.. it has to be an essential consideration as to whether that company is a true long term stayer and player or in for a short term red flag buy me out i will never make it otherwise strategy..

all imho and dyor

 

[Agentm]

would love to see an announcement like el paso put out be replicated in the sugarkane acreages

El Paso also announced that its first Eagle Ford shale well in La Salle County, Texas was recently drilled with a 4,000 foot horizontal lateral and completed with a 16-stage frac. The well is still cleaning up with volumes steadily increasing. The current flow rate is approximately 6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi. The company has almost doubled its lease position to 112,000 net acres. El Paso will maintain a one-rig program as it progresses in this new play.

imagine an ADI well producing 6 mmcfpd on a well producing 1500 bopd in condensate, and then cleaning up with volumes increasing

elpaso have achieved some real excellence there

pioneer went from disaster in their first frac to a pretty successful second go at it in live oak

TCEI has done a mini frac in the eagleford in kennedy and i would say the designs floating around at the moment would not look anything like that design from last year. things have improved remarkably

first cab off the rank will be the chalks well. Weston 1H

 

[martyfar]

just a word of caution, i think everyone knows what i am talking about.. but i think you should be very clear on what a small cap company in this play is capable of exploring and what costs it would be to them to expand into these plays.. it has to be an essential consideration as to whether that company is a true long term stayer and player or in for a short term red flag buy me out i will never make it otherwise strategy..


Hiya Agent,

Thanks for your post. Its certainly encouraging in recent times to see the Eagleford getting such positive commentary from sources "right across the board".

May I seek your "opinion" on whether or not you see ADI in a financial position in the near future (12mths or so) to develop its share of the Sugarloaf play ... I'm assuming all going well and we have the proceeds from a few flowing wells to play with

Also, can you offer some insight into the kind of problems / dilemas the small players such as ADI, AUT, and EKA, may encounter as a result of "mixin it with the big boys" in the board game "Oil Monopoly"

many thanks

 

[gerkin02]

would love to see an announcement like el paso put out be replicated in the sugarkane acreages

El Paso also announced that its first Eagle Ford shale well in La Salle County, Texas was recently drilled with a 4,000 foot horizontal lateral and completed with a 16-stage frac. The well is still cleaning up with volumes steadily increasing. The current flow rate is approximately 6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi. The company has almost doubled its lease position to 112,000 net acres. El Paso will maintain a one-rig program as it progresses in this new play.

imagine an ADI well producing 6 mmcfpd on a well producing 1500 bopd in condensate, and then cleaning up with volumes increasing

elpaso have achieved some real excellence there

pioneer went from disaster in their first frac to a pretty successful second go at it in live oak

TCEI has done a mini frac in the eagleford in kennedy and i would say the designs floating around at the moment would not look anything like that design from last year. things have improved remarkably

first cab off the rank will be the chalks well. Weston 1H

Agentm,

Swift energy probably paid no more than $400 us an acre for the 26000 acres that it has entered into with petrohawk (12-18 months ago).

Now petrohawk has effectively paid $3000 us an acre to farm into this.

If you were swift would you be happy with the upside obtained in such a short time frame with still retaining a 50% interest.

As swift has a 90000 + acre position it probably has a reasonable amount of drilling to retain leases.

Other majors aquired land cheaply and it makes good business to farm out on good terms.

If adi was to use some of its cash to expand into the eagleford,how much additional land would it be able to aquire in todays market?

Great posts,lets keep everyone thinking.

Well done and all the best.

 

[Agentm]

just a word of caution, i think everyone knows what i am talking about.. but i think you should be very clear on what a small cap company in this play is capable of exploring and what costs it would be to them to expand into these plays.. it has to be an essential consideration as to whether that company is a true long term stayer and player or in for a short term red flag buy me out i will never make it otherwise strategy..


Hiya Agent,

Thanks for your post. Its certainly encouraging in recent times to see the Eagleford getting such positive commentary from sources "right across the board".

May I seek your "opinion" on whether or not you see ADI in a financial position in the near future (12mths or so) to develop its share of the Sugarloaf play ... I'm assuming all going well and we have the proceeds from a few flowing wells to play with

Also, can you offer some insight into the kind of problems / dilemas the small players such as ADI, AUT, and EKA, may encounter as a result of "mixin it with the big boys" in the board game "Oil Monopoly"

many thanks

Adelphi’s strategy over the past year has by necessity
been defensive. We have been rigorous in preserving
capital and directing our efforts to retain equity in those
parts of our business most likely to generate revenue
and value in the near term.
In practice, this has involved the sale of Yemen Blocks 7
and 74 and the farm-out of equity in the Sugarloaf AMI.
In addition, we withdrew from AC/P32 in the Timor Sea
and assigned our rights to the Indonesian Bengara South
Block to a third party following the default of our previous
farm-in partners for that asset.
This rationalisation process is nearly complete, after
which we can concentrate on the Sugarloaf Project.
Once we see the results of the first farmin operations
there, we will be well placed to adopt the best
growth strategy.








positive is one way to put it.. as someone pointed out to me, with petrohawk paying $3000 an acre for 50% partnership with swift to get some acreages close by in mcmullen, and with the knowledge the condensate is higher in our acreages, you would conclude that any success by TCEI/Hilcorp must be considered favorably

how all partners and players in the region are financed for this is a question that should be more directed at the individual companies themselves. have they cash reserves, the capacity to develop acreages, funding is a primary consideration.

have all players come through and gained capital and put their companies in order?


what problem other players will have in their capacities to fund their incredible acreages is up to the individual to assess and price themselves.

my view on adi is that despite offers made to expand i think they have held a conservative approach, and are still in the position to be able to expand into the acreages as a long term player and hold their own, i dont think they have overextended and i am certain the ability to manage the sugarkane development commitments in the future are totally an achievable target.

having the cash in the bank, and more to come should the second block sell, eliminates the concerns of massive dilutions in cap raising on adi

i recall alex a while back at an agm saying the most probable way to get it done would be cap raising and debt finance in combination. but with capital in the bank i think the near term looks ok.

imho the parcel that a company like adi or eka hold are manageable, but holding massive acreages like some others do is a different story imho

 

[estseon]

Moving forward, the cash generated from the production will first repay Hilcorp's outlay (so far as I can gather) and will then be split in the new WI ratio and will be available to fund future development of S/L.

ADI has a buffer of $5m+ and that should be viewed in terms of the number of wells that can be financed. At the new WI, and assuming $7m per well, just to put some numbers in, that represents 7 new wells after the fracture stimulation of the 3 drilled wells and 3 new wells.

Whether that will be sufficient to bridge the operations between commencement of new well 4 and full payout of Hilcorp (don't know whether payout will work on a well by well basis - it might) will depend on the payback period for the wells. To get some feel for that, say 1,500 bpd (ignore gas) at $30 retained (just to put a number in) gives approx $50k per day. So, payback using those figures plucked out of the air would be 140 days- so within 6 months. The first of the new wells won't be until 2010. It then depends on how many rigs are deployed. If they can move the drilling rig on every month, the first well should be producing by the time that the 3rd one is started and the existing wells should be producing cash for the JVPs to share by the time that the 3rd one is drilled.

So the 1st new well should be starting to fund new drilling (after paying out Hilcorp) by the time that the 9th is spudded, the 2nd by the time that the 10th is spudded and so on. But the 3 existing wells would have paid out the frac costs and might be financing 1 new well every 3 months.

So, put that in a spreadsheet and you can see that the buffer of $5m could be sufficient to bridge until the development of S/L is self-funding.

However, by the time that $$$ are ringing in the till from successful production, the SP is going to be very different from the current one and so raising additional capital (if required) will be far far less dilutive.

 

[Bubba Oil]

Petrohawk provided an update on the Eagle Ford Shale play in their 3rd Quarter Financial and Operating Results Press Release (11/4/09):

Eagle Ford Shale

Petrohawk drilled ten operated wells and one non-operated well during the third quarter in Hawkville Field. Seven of the operated wells were completed with an average initial production rate of 6.7 Mmcf/d and 220 Bc/d, or 8.0 Mmcfe/d using a 6:1 ratio for condensate, or 10.0 Mmcfe/d using a 15:1 ratio. There are currently sixteen operated wells on production. The average initial rate of all sixteen wells is approximately 7.8 Mmcf/d and 143 Bc/d, or 8.7 Mmcfe/d or 10.0 Mmcfe/d depending on which ratio is used. Current gross operated production is approximately 55 Mmcf/d and 1,300 Bc/d, or 75 Mmcfe/d using a 15:1 conversion ratio. Net operated production is currently approximately 49 Mmcfe/d using a 15:1 conversion ratio. Twelve of the sixteen wells on production have at least 30 days of production with the average rate during the first 30 days being 7.1 Mmcfe/d using a 15:1 conversion ratio.

Drilling operations in the Hawkville Field have continued to gain efficiencies with the average number of days from spud to total depth for the nine non-pilot holes drilled during the quarter being 19 days. This efficiency has resulted in an average spud to rig release cost of approximately $2.3 million, with current total drilling and completion costs averaging approximately $5.3 million. The Company currently has two operated rigs running and one non-operated rig working in the play. Petrohawk intends to focus drilling operations during the next quarter on the high condensate yield area of the field due to more restrictive hunting season restrictions in the dry gas window area and the Company's desire to take advantage of the current disparity between condensate and natural gas prices.

In addition to the decrease in drilling days, Petrohawk is continuing to refine completion techniques used in the play. The first seven completions in Hawkville Field had an average lateral length of 3,736' with an average of 10.6 stages pumped across an average stage length of 350'. The last nine completions had an average lateral length of 4,356' with an average of 15.3 stages across an average stage length of 285'. In addition to the increased lateral length and associated increase in the number of stages and decreased stage length, the Company is increasing the sand concentration to 2.5-3.0#/gallon for each stage. These combined changes in the completion design appear to have resulted in better well performance that Petrohawk hopes will result in higher EUR's. Additionally, the Company will be extending the lateral length on its wells to approximately 6,000-6,500' when possible, a change that is also expected to translate into potentially better overall well performance.

 

[Agentm]

Petrohawk

Twelve of the sixteen wells on production have at least 30 days of production with the average rate during the first 30 days being 7.1 Mmcfe/d using a 15:1 conversion ratio.

Pioneer

Initial rate of approximately 11.3 MMCFEPD of gas (approximately 8.3 MMCFPD of liquids-rich gas and 500 BPD of higher-valued condensate).


Elpaso

6.1 MMcfe/d with a flowing tubing pressure of 5,200 psi.


St mary


• The Galvan Ranch 1H (SM 100% WI) . The well had a maximum seven day sales average of 8.0 MMCFED.
• The Briscoe Apache Ranch 1H (SM 100% WI). The well had a maximum seven day sales average of 7.1 MMCFED.
• The Galvan Ranch 4H (SM 100% WI) . Currently the well is flowing at a rate of 7.0 MMCFED at a flowing wellhead pressure of 3,600 psi.

St. Mary’s first well in this program, the Briscoe G 1H (SM 100% WI), was initially reported to have an average sales rate over its initial seven day flow period of 5.6 MMCFED.
St. Mary will be completing the Briscoe G 2H (SM 100% WI) and the Briscoe B 1H (SM 100% WI) in the coming weeks.


Conocophillips


Sig Cornelius

Sure. I'd be happy to. I referred to some successful results that we've had recently on our well, our last well, the BrodskyA7well. We had online for relatively short period of time but we are very encouraged it's got a flow rate of nearly four million cubic feet a day, but more importantly around 1500 barrels a day of condensate. So that has been part of our strategy to focus on plays that have a very high these shale plays that have a very high liquid content, obviously very important on the economics.
We have a very substantial position there, close to 300,000 acres when you consider our interest in the Eagle Ford and the adjoining Austin Chalk play. You are correct. We have been entertaining some offers for potential farm out of our position, but we are not going to farm it out unless we see a compelling value proposition. So far we have not seen that so.


4 mmcfpf 1500 bopd



its an interesting observation that all wells in a very broad region, spread over many many counties, are delivering very commercial wells.

the greater majority are in the western part of the trend, and the highest well with condensate delivery is on trend in KARNES COUNTY and EAST of ADI acreages, conocophillips bordovsky, 4mmcfpd 1500 bopd ip


looking forward to the upcoming works on the ADI weston well, the first chalks well to be stimulated in a week or so.. mid november is very much a possibility

will be very interested in wells in the eagleford also in the sugarkane region including the adi kennedy well in the near term.

after a long long wait i am having trouble thinking of reasons to sell out of adi..

maybe soon groundhog days will be gone..

 

[adobee]

Petrohawk

looking forward to the upcoming works on the ADI weston well, the first chalks well to be stimulated in a week or so.. mid november is very much a possibility

will be very interested in wells in the eagleford also in the sugarkane region including the adi kennedy well in the near term.

after a long long wait i am having trouble thinking of reasons to sell out of adi..

maybe soon groundhog days will be gone..

they better do something soon.. i have to pay a deposit on a house in four weeks.. and am waiting !!!! if they do something i can then leave the profit in.. if they dont.. i will have to pull out .. and i know that if this happens an announcement will be the following day !!?!?!

 

[Miner]

they better do something soon.. i have to pay a deposit on a house in four weeks.. and am waiting !!!! if they do something i can then leave the profit in.. if they dont.. i will have to pull out .. and i know that if this happens an announcement will be the following day !!?!?!

Petrohawk



[
looking forward to the upcoming works on the ADI weston well, the first chalks well to be stimulated in a week or so.. mid november is very much a possibility

will be very interested in wells in the eagleford also in the sugarkane region including the adi kennedy well in the near term.

after a long long wait i am having trouble thinking of reasons to sell out of adi..

maybe soon groundhog days will be gone..

Dear Agentm and Adobee

I do follow ADI postings with great hope and interest.
But I am a bit frightened to see both your postings are suggesting a SELL thought.

I hope the ADI reports should rather support us to buy more ADI

I am still holding and honestly hoping patience will bear its own fruit

Good luck to all ADI holders.

 

[Agentm]

the heavy selling down of adi in the past weeks from .18 to .12 was not me, i looked today and my levels are as high as they ever were.

i said i cant think of any reasons to sell.. far cry from saying the share is a sell as you put it.

adobee is looking for and exit in 4 weeks. i think by then some value may be given to adi.

if petrohawk have valued the eagleford acreages in the AWP field in mcmullen @$6000 an acre, (50% partnership paying $3000 an acre) then imho adi has about $27,000,000 acreage value for the 20% it owns of eagleford in the sugarkane. and i view the sugarkane as far more condensate rich than the petrohawk jvp acreages.. then the chalks must hold some value on top of that imho. adi has $5.5 mill more cash in the bank than before also.. so a $30+ mill company is a view i hold of adi just on acreage value and cash..

hilcorp only gets their % share of regions they actually develop, and hold nil % on anything not developed... they did not pay up front.

my view that adi is far more a share that can be very easily valued in the old benchmark of .30 like before..

all imho..

 

[gerkin02]

the heavy selling down of adi in the past weeks from .18 to .12 was not me, i looked today and my levels are as high as they ever were.

i said i cant think of any reasons to sell.. far cry from saying the share is a sell as you put it.

adobee is looking for and exit in 4 weeks. i think by then some value may be given to adi.

if petrohawk have valued the eagleford acreages in the AWP field in mcmullen @$6000 an acre, (50% partnership paying $3000 an acre) then imho adi has about $27,000,000 acreage value for the 20% it owns of eagleford in the sugarkane. and i view the sugarkane as far more condensate rich than the petrohawk jvp acreages.. then the chalks must hold some value on top of that imho. adi has $5.5 mill more cash in the bank than before also.. so a $30+ mill company is a view i hold of adi just on acreage value and cash..

hilcorp only gets their % share of regions they actually develop, and hold nil % on anything not developed... they did not pay up front.

my view that adi is far more a share that can be very easily valued in the old benchmark of .30 like before..

all imho..

Petrohawk have paid $39m for 50% of 26000 acres.Therefore 13000 acres at 100%.
$39m divide by 13000 acres equals $3000 per acre.

Hope this clarifies things.

 

[jancha]

they better do something soon.. i have to pay a deposit on a house in four weeks.. and am waiting !!!! if they do something i can then leave the profit in.. if they dont.. i will have to pull out .. and i know that if this happens an announcement will be the following day !!?!?!

Hey Adobee do you think you can sell today so we can get that announcement out & make a profit? Only kidding but i know where your coming from.
ADI does'nt seem to come out with too many announcements & if it weren't for Agentm keeping us up to date i dont think there would be as much interest in this one.

 

[Agentm]

Petrohawk have paid $39m for 50% of 26000 acres.Therefore 13000 acres at 100%.
$39m divide by 13000 acres equals $3000 per acre.

Hope this clarifies things.

lol

holy cow.. that is embarrassing.. your right, i doubled it up with the 50% rule..

i eagleford is good value, and adding in the potential of the chalks on top makes the acreages a good asset for adi.

 

[gerkin02]

lol

holy cow.. that is embarrassing.. your right, i doubled it up with the 50% rule..

i eagleford is good value, and adding in the potential of the chalks on top makes the acreages a good asset for adi.

I listened to petrohawks webcast today and they stated that 1mmcsfd gas plus 100bls condensate is equivelent to 2mmcfd gas.

If adi can get 4mmscfd gas plus 1200bls condensate that equates to 16mmscfd gas equivelant.

These are Haynesville rates with a substancially reduced well costs.(leases are $5000 an acre in the Haynesville shale)

The economics here are truely off the chart.

The punters are asleep and we need results.

All the best.

 

[Agentm]

transcripts posted by saf on another site..

this is pioneers transcripts from a conference call

i will post it in 2 parts with slides


“So we’re really excited about getting back to drilling after what's been a slow drilling year, 2009. Slide 12 is, and a couple of slides thereafter are some details surrounding the Eagle Ford Shale expansion. We’re extremely excited about the recent well results from the Sinor #5.
As Scott has already mentioned, this well IPed at substantial rates, 11.3 million cubic feet per day equivalent and importantly had a large component of both condensate and NGL such that we can calculate that about 55% of the production is essentially liquids and only about 45% gas.
We were somewhat limited on the extent of the lateral section of this well to only 2,600 feet. We’ll be increasing that as we look forward to future wells. Importantly, we had originally planned about a five well program as we embarked upon our Eagle Ford Shale development.
Now we’re planning to keep that one rig at a minimum growing all the way through 2010 to assess the resource potential in various areas of the field with one of the main objectives being to increase the length of laterals and increase potentially the number of frac stages.
And toward that end we have our second well drilling. It’s shown as the second – the southern most of the two red stars below the Sinor well. This well is about 2.5 miles away from the Sinor well. We’re starting as we speak to drill the horizontal section here shortly. It will itself have about 4,600-foot lateral and the plan is for 16 stages of fracs to be pumped.
And so we’re very much looking forward to this well as the second of several wells looking forward. We’ll have to evaluate a further program expansion as we look the results of this well and additional wells to decide whether to increase the rig count in the play.
As Scott has already alluded to we think there is benefit associated with exploring joint ventures opportunities. We've got a lot of acreage here, the objective is to accelerate the development of that acreage in the Eagle Ford and we think a joint venture could potentially do just that.
Importantly as we return to slide 13, the liquids components of this first well is indicative of potential significant value added when it comes to the economics of these wells, especially based on today's commodity price model where you have based on today's nearby strip prices something like 16 to 1, oil to gas ratio.
So if I were to calculate then the type of impact from the liquids just using the IP of the Sinor #1 well, Sinor #5 well is an example, you would take a dry gas well of the similar volume 11.3 million a day, $5 gas and achieve about $57,000 per day revenue.
If we then compute the amount of revenue that's generated from the Sinor # 5 well, giving consideration to let's say $70 condensate, NGL price is about 50% of that and the remaining dry gas after shrinkage, we would achieve some $96,000 a day of revenue, about a 68% increase compared to the revenue from the dry gas well.
So you can see the very significant impact of a combination of condensate and 1,200 Btu gas on the economics of these wells. And another way to think about it is liquids rich Eagle Ford well with 11.3 million cubic feet a day equivalent IP would have essentially the same revenue as if we had a drilled a dry gas well with about 19 million cubic feet a day dry gas IP.
So it's clear that the liquids content is going to continue to be a critical component in the overall economics and maybe one of the keys to the Eagle Ford shale economics being very competitive as compared to several other shale plays.
So obviously we're very excited about the play and its impact on Pioneer going forward and we have lot more to talk about in subsequent quarters as we begin our exploitation of the Eagle Ford shale”

 

[Agentm]

more from the pioneer conference call

Q & A

Michael Jacobs -Tudor, Pickering, Holt & Co.

On your JV commentary the Spraberry ramp is generating some pretty nice free cash in 2011 plus how do you think about using that cash to accelerate the Eagle Ford whether it would be in Live Oak or the Dewittarea?

Timothy L. Dove

I would look at it like a Spraberry it's going to build on itself in regard to just for ramping up Spraberry, it may or may not have a lot of free cash flows into ramping it up to a 1000, it will start generating significant free cash flow in 2012 and beyond.
And we will take some of our long life gas assets that will be having free cash flow and using some of that to accelerate the Eagle Ford play along with a possible JV, so.

Michael Jacobs -Tudor, Pickering, Holt & Co.

Did you guys take a look at the swift assets and so why didn't you get involved?

Timothy L. Dove

We have a policy Michael not to comment on what data rooms we go into. So obviously if you look at, Tim made a comment on this, but if you look at our acreage map, we have extended acreage buying into McMillan County, which is where the swift acreage is.
So obviously it's very, it's close to our acreage. So but just can't comment on what data rooms we go into.

Michael Jacobs -Tudor, Pickering, Holt & Co.

One last question on (inaudible) if we assume best case results from the Eagle Ford, which hope might get into to a development case, would that increase your willingness or your desire to sell international assets?

Timothy L. Dove

We always look at different ways to come up with capital in regard to accelerating obviously the first one will be in regard to JV strategies over looking at with a lot a people are very excited about the Eagle Ford Shale and Petrohawk stating it is good or better than the Haynesville.
And with the oil richness of it that obviously that’s number one but obviously we are always open to looking in other ways to raise capital to accelerate Spraberry and also the Eagle Ford play

David Kistler - Simmons & Company

Okay that's helpful. And then just talking about CapEx for a second, if you look at what you guys been thrown out as your potential budget going forward, there's obviously an opportunity throw off free cash flow tying that to your comments on looking at a JV structure for the Eagle Ford to accelerate drilling there.
Do you think about deploying that gap of free cash flows straight to the Eagle Ford and accelerating that on your own? I guess the gist of the question is does the CapEx number that you throw out have a bias upwards potentially?

Scott Sheffield

Obviously, we need to see some more results. We're watching activity all around our acreage. There's over 20 rigs running now and the Eagle Ford is picking up significantly. And so we're getting reports on all of the wells that lot of our acreage being tested on the outside parameters at the same time we are testing it internally.
So the more data we get the more of comments we have, we will definitely be accelerating in spending that. But at same time I think it's important to deliver free cash flow under any model that we go forward at the same time we need more data to accelerate greatly the Eagle Ford play

http://seekingalpha.com/article/171...call-transcript?page=-1&find=eagle+ford+shale

 

[Agentm]

http://seekingalpha.com/article/171891-eog-resources-inc-q3-2009-earnings-call-transcript?page=-1

Michael Jacobs - Tudor, Pickering, Holt

Hoping you can nail me out the conceptual question, you are purview to more industry chatter than most. I’d like your thoughts on how you think about geologic versus economic risk in South Texas as you think of acreage North and South of the Edwards Reef?

Mark Papa

Yes. That’s code for what’s going on in Eagleford and our flip response is to know how the Eagleford, but it’s an open secret that we are drilling some wells at Eagleford, but it’s just too soon for us to really opine on the results we’re achieving or what acreage position we have. So all we can offer on that is that in subsequent calls, not necessarily immediately the next call perhaps, but in subsequent calls within the next 12 months we’ll disclose what the situation is in South Texas.





Murphy oil a bit more open



http://seekingalpha.com/article/171...tion-q3-2009-earnings-call-transcript?page=-1




Onshore US we are in the midst of a three well drilling program that will extend into next year and marks our initial Eagle Ford shale drilling in South Texas.

The first well is nearing total depth and testing should be completed within a month. We are continuing to acquire acreage and moving towards 200,000 net acres in the play. These are early days for us but our acreage is well situated and has good promise.


Paul Sankey – Deutsche Bank

And is there any major moving parts relative to what you said at you analyst meeting, for instance that we should be aware of.

David Wood

No not really, I think things are moving along pretty well. The big step up for us is going to occur actually in 2011 when we get Tupper West on production in the second quarter and we bring on 180 million cubic feet a day so that’s the next big step up that we’re going to look at. We are drilling Eagle Ford wells, an Eagle Ford well now. We have anticipation that in a success case we will have some of that come on but we’re a few steps away from that.

So that could be something else that we would look to add in the event that that works.


Blake Fernandez – Howard Weil

And then you had mentioned the preference to lease rather then acquire and obviously you’ve been adding to your Eagle Ford position, do you think that’s really where you’re area of focus is going to maintain for right now or do you think you’re going to start to evaluate some other shale play opportunities.

David Wood

We’ve been looking at all, pretty much all types of North American shale opportunities and we settled on the Eagle Ford for a lot of good reasons I think. Having said that we haven’t drilled a well yet. We’re drilling one now which should be at TD this weekend in its horizontal section and then we should flow it here and have some results in a month.

I’m happy to keep growing the Eagle Ford position based on the data that we’ve seen. The well that we’ve drilled, we haven’t flowed it yet but its done all the things that we would ask. The section has drilled more like Haynesville section then anything else that we’ve seen.

And so we the play is well worth making. And 200,000 acres getting that, it puts us with a great footprint and I think one of the pluses for that particular play is the richness of the gas as well. So there’s lots of good reasons. Above ground issues are less then some other plays.

Being able to lease has lots of advantages, one of which you don’t have to write a big check to start off with and the second thing is you don’t have to make all of your commitments all at once and you can kind of space things out and so you can, it goes back to one of the earlier questions, about where the over supply of gas is likely to be.

One of the flexibilities that you want to have in these games is to slow down or speed up and if you’ve got commitments that force you to drill a lot of wells very quickly, you remove a lot of that flexibility and so one of the beauties of having leases with longer terms is that you can go in there and you can decide how fast you want to go and so both the [inaudible] play for us and Eagle Ford for us allow us that flexibility and so I like that.