docFinder alert PLS PLS
Week of November 19, 2013 Volume 3, No. 9

Sneak preview on select pure plays for 2014

Early Capex Guidance. Gain Insight!


Cabot 2014 Capex

Up 24% to $1.425B


November 12, 2013


Full Presentation



Continental 2014 Capex

Up 12.5% to $4.05B


October 2, 2013


Full Presentation


With Q3 behind us, companies are in full planning mode for 2014.  This docFinder Alert provides you with select early insights on 2014 capital expenditure plans and the impact on some of the country's best plays.

Slide above left is from Cabot Oil & Gas - Marcellus-heavy Cabot has over 3,000 drilling locations in the sweet spot of the play alone, suggesting over 25 years of inventory. It is projecting 30-50% production growth next year on top of this year’s 44-54% growth. Capex is increasing 24% YOY to ~$1.425 billion using range guidance midpoint, so production growth should be greater than the increase in capital by significant margins. The entire increase is going to the Marcellus, which will absorb 74% of next year’s capex compared to 65% this year (much of the remainder goes toward Eagle Ford operations). Ramping production plus low costs has made the company a free cash flow leader, with over $1.0 billion expected to be generated over 2014-2015. Cabot says that cash may roll back into Marcellus and Eagle Ford acreage and development, fund new ventures or be returned to shareholders.

Slide above right is from Continental Resources - #1 Bakken operator Continental is on pace to triple production and proved reserves by 2017 (from 2012 levels), with 141,900 boepd (71% oil) in Q3. It plans to increase capex 12.5% next year to $4.05 billion, prospectively resulting in production growth of 26-32% vs. 2013 levels. Three-quarters of spend is going toward development drilling, which will rise 12% YOY. Exploration spending grows 16% at $500 million, as well. Operated rigs are expected to grow 23% to 43, and net wells will increase by the same percentage to 400 (again with three-quarters in the Bakken). A fair amount of operated rig growth will go to Continental’s SCOOP holdings in Oklahoma, where production growth outpaced companywide growth rising 14% in Q3, and Continental anticipates its count growing 50% from current levels to 18 by mid-2014. Meanwhile, total operated well costs are targeted for $7.5 million next year, down 6% from Q3 levels.

More HOT slides and data below. 

     Shown below are more slides from other independents often considered pure-plays to gain insight to the Utica, Midland Basin, Mississippian Lime and Tuscaloosa Marine Shale plays.  These include Gulfport Energy, Diamondback Energy, Sandridge Energy and Goodrich Petroleum.


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featured.slides from docFinder

Slide Slide Slide Slide

Gulfport Energy

$1.05B Targeting Utica

November 5, 2013


Diamondback Energy

$425 to $475 Million

November 5, 2013


Sandridge Energy

Capex Flat at $1.5B

November 6, 2013


Goodrich Petroleum

$375MM TMS Focus

November 05, 2013


Gulfport Energy has presences in the Permian, Niobrara, WCSB, South Louisiana and even Thailand, but its focus is the Utica where Gulfport reported 7,200 boepd in Q3 (more than double Q2 and 55% of total 3Q13 production of 13,000 boepd). It is spending ~$700 million ex-acreage next year, up 21% YOY, with 88% of total and nearly all YOY capex increase in the Utica, as well as another $250 million toward Utica leaseholds. Gulfport expects 2014 production of 50,000-60,000 boepd, up 323% from current levels and 86% from year-end exit projections, with a massive ~600% increase in the Utica to ~49,500 boepd. On Nov. 4, 2013, GPOR had a market cap of $4.7 billion and EV of $4.9 billion.


Diamondback is a red-hot pure play Midland Basin company in the Permian (shares are up 175% YTD and 204% since its October 17, 2012 IPO) leveraging the shift toward horizontal activity in the play to solid growth and lower costs (down 42% in Q3 vs. fiscal 2012). Next year’s drilling and infrastructure capex is projected at $425-$475 million, a 48% ex-acquisition increase YOY, with 85% targeting horizontal drilling and completion. Production should average 15,000-16,000 boepd next year, more than doubling from Q3 levels. Horizontal well costs should run $6.9-$7.4 million while vertical wells are $2.0 to $2.2 million.  FANG is expected to add a 5th horizontal rig in Q214 and maintain one vertical rig.


SandRidge Energy 2014 capex will be virtually flat, up just 3% from $1.45 billion to $1.5 billion. In its Midcon/Mississippian area, SD is planning a flat 308 net wells with D&C costs expected to be down from $1.03 billion to $965 million in 2014. On a % basis SD is making much larger cuts to its smaller Permian and GOM/Gulf Coast efforts, but cuts are fairly uniform on a dollar basis in the $35-$70 million range. The company is losing $215 million payable in JV carries vs. last year , and has cut back to cover the decrease. Despite cuts however, production is expected to grow 8% YOY to 99,500 boepd (42% oil). The Mississippian Lime play will generate 62% of 2014 production volumes followed by GOM/GC with 23%.


Goodrich is allocating 80% of its 2014 $375 million capex budget to the TMS.  GDR also has Eagle Ford production and Haynesville gas optionality. Production is down YTD from 85.8MMcfe/d to 79.4MMcfe/d, but oil has increased from 21% to 30% of total. The company just upsized 2013 capex from $230 to $255 million, then guided to $375 million in 2014, with $300 million in the TMS up from just $75 million last year. Eagle Ford spend will drop from $100 million to $30 million. Goodrich has yet to book any proved reserves in the Tuscaloosa, but the play holds half of the company’s potential reserves. Goodrich's Crosby 12H-1 well, the most promising well in the play, has sparked renewed vigor in the area.


Full Presentation

Full Presentation

Full Presentation

Full Presentation

featured.transactions from PLS global M&A database

11/14/13 Comstock buys 53,000 acres in the TMS play at $1,028/acre $54 MM
11/08/13 Enerplus buys 34 MMcf/d of Marcellus production$153 MM
11/05/13 EnerVest buys SM Energy's Anadarko Basin assets $343 MM
05/20/13 Carrizo buys 5,900 additional Utica acres at $12,400/acre $73 MM

Source: PLS Derrick Global M&A Database