Thursday, September 6, 2012

Barclays CEO Energy/Power Conference

** NOTE: this post has been updated with Devon Q&A.

All of the TMS players presented today at the Barclays CEO Energy/Power Conference in New York City.  Here's a summary of notes from the presentations.  All of the presentation slides are on the company websites.

ENCANA
355,000 net acres; 9.4 billion barrels in place
“20 MMBOE/section of petroleum initially in-place; 9500-11500’ TVD; significant oil infrastructure supporting this play; oil marketed at LA Light Sweet oil pricing, sometimes as high as $15/bbl premium over W.TX Intermediate; very encouraged with initial results; with more production history, starting to establish type curves; will release type curves in subsequent quarters; very pleased about reservoir performance, excited about it; working on Joe Jackson well; drilling 2 wells; significant progress made in establishing landing target for horizontal lateral which had reduced hole stability issues and allowed increased completion side intensities; do well when drilling vertically or horizontally; in the bend, we struggle to have good hole stability; Ash well: drilling with larger diameter casing program; once curve built, set drilling liner through curve and eliminate majority of problems that we’ve had…at least that’s the plan; additional advancements in completion design and improvements in overall well cost structure are on the horizon; seeing significant improvement in completion effectiveness; go from $18-20M well to $15M in short term to eventually $12M well cost; overall TMS reservoir doing quite nicely; still have work to do on drilling side; Dataroom is open; considerable interest so far; expect offers in the fall

HALCON
PRESENTATION (Floyd Wilson, CEO):
“Target 5-6 plays; targeting one million acres in the company; taking position in plays with running room; seeking 50 years of oil drilling inventory”
TMS: “Starting leasing 6-7 months ago; on way to about 100,000 acres; traditional cost improvement play; zone is there; it’s thick; susceptible to modern technologies (frac jobs); well costs quite high in early phase; need $9-10M; AFE at $11M for first wells; profile in terms of measured depth of a deep EF well so shouldn’t be a problem getting there; early stages extra money spent; EUR 600-700 MBOE play; if you get 7000-8000’ laterals; depths are approaching 14000’, a lot around 10000’; going to be a bit of a challenge; moving rig in on Broadway right now then Lambright; 12 miles apart; high confidence based on old control that we’ll find what we’re looking for; approached differently; west of activity; intentionally prospect area away from thick Tuscaloosa water bearing sands, find on top of bottom of shale section; won’t have water to contend with”

Q&A:
“have specific buy area; hope to get to 100-150,000 acres; 1/3 of way there; $1000/acre now, up from $250 short time ago
EOG
No mention of the TMS in the slide presentation.

GOODRICH
Same summary slide as in their most recent presentations. I did not listen to the webcast.

DEVON
The TMS was only mentioned in summary slides.


Q&A: “Tuscaloosa…we’ve drilled a few wells; huge resource there, no question, awful lot of oil; been moving around our acreage position; start to understand it; some promising results, some not so promising results; what we’re seeing in better areas, seeing pretty good initial production rates; other operators seeing real good initial production rates; real question is, don’t have enough data yet; what that decline curve is going to look like. No question Lots of oil there. No question this will produce oil in significant quantities from these wells, but fairly expensive wells, they’re deep; $12M or so; all depends on the what decline curve looks like as we get more data; if decline curve real steep, you’ll probably produce 250,000 barrels, that’s nice but it’s not going to drive the economics. If you have a more hyperbolic curve, it might be more in the 400,000-500,000 bbl recoverable range which will really drive those economics;  the jury is out on that part of it; it’s in the early days; only been 20 wells drilled in area that is enormous in size; worthwhile for us to take some money continue to pursue that; it’s part of our joint venture, so for us, fortunately we have a partner that is picking up a good piece of that early exploration capital because the prize is huge if it works, but it’s early.”

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