RECENT POST STUFF
Here is a good example of some of the absolute shit folks have to deal with from the US shale oil industry. If you are looking
at PDP packages to buy (I'm sure as hell not!)... buyer beware.
If economics don't look too bueno on marginal producing wells the seller can fix all that just by skewing LOE data.
Change re-occuring expenses to non re-occuring, drop compressor rentals out of expenses, leave out ALL down-hole maintenace costs over the acconting period, exclude JOA COPA expenses, don't mention PA&D expenses in the sales brochure and BINGO ! LOES are automatically 30% less than what they really are.
That jacks up remaining recoverable reserves and inflates the snot out of PV10 values.
This chart is an evaluation of a recent PDP sale in the Permian Basin, courtesy Laura Freeman, who also says this: "I continue to be a bit shocked at how many cash flow negative assets people are trying to sell right now."
"...the past decade’s shale miracle did wonders for drivers, oil executives and “energy dominance” fantasies, but not for investors. It isn’t a coincidence the hit to Exxon’s credibility is rooted in the same thing that turned investors off the sector in general: an expensive pivot to shale."
Liam Denning, Bloomberg
We're proud to be an American stripper well
operator and still going
strong after 50 years. We
try and keep our stuff looking like
Southwest Muldoon Field represents
less than half our operations and its made 6.5MM BO in 60 years. It is profitable
as hell at $40 WTI.
One man's trash is another man's
Hug a stripper well operator tomorrow!
"The blog is one of the best for me personally; Mike is the Huckleberry Finn of the drilling industry." James Regan
Header Photography by