WS - PDC adding Wattenberg DUCs, suspending completions until Q4 - June 30, 2020PDC Energy significantly scaled back its Wattenberg field plans for 2020. Capex guidance was lowered by $300 million to $450 million, a 40% cut. The number of wells to be spudded was reduced by 40% to 100 from a previously planned 165. Lateral lengths will average 8,900 ft. After dropping from three active rigs, the company will run one through year’s end. The number of planned completions was slashed 45% to 120 from 220. Well costs are expected to average $2.5 million for 1-mile laterals and...
Jun 30, 2020
PS - US E&Ps execute significant Q2 oil curtailments - June 2020The coronavirus pandemic has resulted in unprecedented demand destruction for oil markets. The International Energy Agency projects that global demand will fall by a record 9.3 MMbo/d in 2020. In the middle of the lockdown, April demand was down 29 MMbo/d YOY. In response to greatly oversupplied oil markets, OPEC+ agreed in mid-April to cut 9.7 MMbo/d in May and June. The IEA estimated that global output would fall 12 MMbo/d in May. Outside of the OPEC+ cuts, major and independent US producers...
Jun 03, 2020
PS - E&Ps narrow focus as WTI rules some plays uneconomic - June 2020Capex revisions, reductions in operational plans and curtailments continue to remain at the top of the news for E&P companies. WTI spot prices spent the last two weeks of May in a $32-$35 range, marking a notable improvement from April’s last two weeks, which saw negative to sub-$20 prices. Now in the last third of Q2, many industry watchers seem to feel like we’ve weathered the worst 2020 has to serve. Of course, we’ll all get to re-live the horrors of H1 in late July and August when Q2...
Jun 03, 2020
PS - Shale operators adjust 2020 plans to weather the storm - May 2020As the oil and gas industry recovered from the last bust, the theme centered around “lower for longer.” For several years, the reality of it has been 100% true. Planned capital investments before the 2020 crash anticipated lower spending and flatto-lower activity levels. Strategies to reduce debt and achieve free cash flow over the last year have enabled many companies to be in better positions in the current sub-$30 theatre, with many wielding operational and capital cuts several times....
May 13, 2020
PS - PDC Energy Highlights - April 29, 2020PDC Energy lowered 2020 capex guidance on April 14 to a range of $500-600 million, down 50% compared to the initial target of $1.0- 1.1 billion. In the Delaware Basin, the company will release its only drilling rig in May and suspend all D&C activity for the remainder of the year. The company released its only completion crew in the play during March. PDC will continue to run a rig at Wattenberg field in Colorado’s DJ Basin and resume completions there in...
Apr 29, 2020
WS - PDC deepens 25% capex cuts to 50%, still targets FCF
- April 28, 2020In order to preserve its balance sheet strength, liquidity and ability to generate meaningful free cash flow, PDC Energy lowered 2020 capex guidance on April 14 to a range of $500-600 million, down 50% compared to the initial target of $1.0-1.1 billion. PDC anticipates generating $100 million in free cash flow, assuming $25/bbl WTI and $2.00/MMbtu Henry Hub. The April 14 reductions follow a March 11 announcement that the company was cutting capex 20-25% from original guidance and targeting $150...
Apr 28, 2020
CM - Extraordinary measures to meet extraordinary conditions - April 2020Prevailing market and social conditions have remade goals, guidance and priorities. Most companies have announced that their 2020 annual shareholders meetings will be virtual only. At two virtual meetings, holders of Chesapeake Energy (PG.3) and Nabors Industries (PG.19) common stock voted to allow their boards to reverse-split their shares by ratios of 200:1 and 50:1, respectively. Callon Petroleum (PG.4) will also reverse-split its common, and midstream fund manager Tortoise Energy...
Apr 24, 2020
CM - PDC further extends spending cuts, sees $100MM cash flow - April 2020PDC Energy, Inc. announced another round of spending cuts, this time bringing expected 2020 capital expenditures down to $500-600 million. The updated plan brings spending down another 30% at midpoint from its old $787.5 million midpoint. Overall, at a $550 million midpoint, PDC’s spending will be off almost 60% from its original $1.2- 1.4 billion forecast. As a result, free cash flow is expected to be in the $100 million range assuming $25/bbl WTI, $2/MMbtu NYMEX gas and $5/bbl NGL...
Apr 24, 2020
CM - People & Companies - April 3, 2020Amazing Energy Oil and Gas Co. named Benjamin Jacobson III CFO effective Feb. 13, succeeding Marty Dobbins, who resigned. Prior to joining Amazing Energy, Jacobson co-founded ICP, LLC, which invests in E&P companies. Apache Corp. appointed Clay Bretches EVP, Operations, a promotion from SVP Operations. He will also continue to serve as CEO and a director of Apache subsidiary Altus Midstream Co., which he has done for over a year. Basic Energy Services, Inc. has reconfigured its...
Apr 03, 2020
PS - People & Companies - March 30, 2020ConocoPhillips appointed David T. Seaton and Al Walker to its board. Seaton was CEO of Fluor Corp. from 2011 to 2019 and chairman from 2012 to 2019. Walker was president, CEO and director of Anadarko Petroleum from 2012 to 2019 and chairman from 2013 to 2019. Extraction Oil & Gas CEO and chairman Mark Erickson is leaving the company. Matt Owens has been appointed permanent CEO. Owen serves as president of the company and has been acting CEO of the company since last April. He...
Mar 30, 2020
PS - Permian operators slash 2020 plans as oil market craters - March 18, 2020The economic implications of the novel coronavirus and the oil price war initiated between Saudi Arabia and Russia have sent oil markets on a downward spiral. WTI settled at $20.37/bbl on March 18, dropping 24% on the day and 56% in the last two weeks. Shale operators across the US have acted swiftly to adjust 2020 plans and protect balance sheets. In the Permian, everyone is cutting back. Parsley Energy revised its baseline capex assumption from $50/bbl WTI to $30- $35/bbl for the...
Mar 18, 2020
WS - PDC Energy Highlights - March 17, 2020PDC Energy plans to reduce its Wattenberg field activity in Q2 from three drilling rigs and two completion crews to two and one, respectively. The company is dropping its completion crew in the Delaware Basin and running one rig for the remainder of the year. Capex was cut 20-25% from the initial $1.0-1.1...
Mar 17, 2020
CM - PDC closes $448MM in note buybacks, adjusts 2020 expectations
- March 2020PDC Energy, Inc. announced that holders of $448 million of the 6.25% senior notes due 2025 issued by the former SRC Energy tendered the notes for redemption by the Feb. 18 deadline. That leaves about $102 million principal amount of the 2025 notes outstanding. PDC assumed the notes when it bought SRC in January for $1.015 billion in stock and the assumption of its $685 million of net debt. Upon closing of the tender offer, $237 million of total assumed SRC debt remains outstanding with $81...
Mar 13, 2020
CM - Debt & Credit Briefs - May 15, 2020Battalion Oil Corp. and lender BMO amended the company’s revolving credit facility to reduce the borrowing base to $200 million on April 30. The borrowing base will be further reduced by $5 million each month from Sept. 1 to Nov. 1, the company reported. CEO Richard Little said Battalion has substantial liquidity from its hedge portfolio and was “well positioned to preserve our strength for the future.” Chaparral Energy’s reserve-based lending facility was decreased to $175 million from...
May 15, 2020
PS - Rockies Briefs - March 30, 2020Once HighPoint Resources completes all drilling and completion activity that is in progress, it will defer all activity until market conditions improve. The company has 90% of anticipated 2020 oil volumes hedged at $58/bbl, with a mark-to-market value of $225 million. Anticipating free cash flow generation this year, HighPoint plans to reduce debt by $45 million in Q1 and has no significant debt maturities until October 2022. PDC Energy plans to reduce its Wattenberg field activity in...
Mar 30, 2020