my point is
stack is profitable
the leasehold alone is worth 10x min
what was paid for it a decade ago
and you won’t see that in the rig count
logan noble payne county is worthless
Oil and natural gas 6 month 1 year and five year predictions ?
- Thread starter HighStickHarry
- Start date
my point is
stack is profitable
the leasehold alone is worth 10x min
what was paid for it a decade ago
and you won’t see that in the rig count
logan noble payne county is worthless
If STACK was profitable MRO/DVN/CLR wouldn’t have pulled out. Some of the smaller guys can make it work because they don’t have the high overhead and G&A burdening the wells.
Just following accounting guidance. They would request a waiver from the banks.
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looks like they've got until 3/21 to get the ratio to the accepted level and it looks like an SEC requirement. So, probably means nothing right now. They've got a lot of tricks they can do to get to that level of an acceptable ratio...cookin' the books may be one of them! I'm just getting my info from the dok so it's not like it's inside info...here is the article today...it's long. And they do say they can waive it...so it may be a lot about nothing.
Chesapeake files ‘going concern’ statement
Chesapeake Energy Corp. plans to slash its drilling and completions budget by 30% in 2020, hoping to keep its oil production relatively stable as it confronts ever-tightening lending restrictions, top company executives said Tuesday.
The company revealed in a regulatory filing with the U.S. Securities and Exchange Commission it could have difficulty maintaining debt ratios required by its credit agreements if oil and natural gas prices remain low.
That is because the company will be required in coming quarters to reduce required ratios of debt to consolidated earnings before interest, taxes, depreciation, amortization and exploration from 5.5 to 1, effective now, to 4 to 1 by March 31, 2021.
Continued depressed pricing for oil and natural gas could affect the company’s ability to meet those requirements and could potentially shut the company’s doors, the filing said.
“Failure to comply with this covenant, if not waived, would result in an event of default under our Chesapeake revolving credit facility, the potential acceleration of outstanding debt there under and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness,” the filing states.
That, it continued, would raise “substantial doubt about our ability to continue as a going concern,” the company stated.
Beyond its plans to cut drilling and completion costs in 2020 and striving to find other operational efficiencies, the filing states the company also is pursuing various other potential transactions and cost-cutting measures that could include reductions in corporate discretionary expenditures, refinancing agreements, capital exchange transactions and even asset divestitures.
“We believe it is probable that these measures, as we continue to implement them, will enable us to comply with our leverage ratio covenant,” the filing states.
There before
One potential deal Chesapeake could make with its lenders could look like another one it made with them in April 2016, getting them to agree to postpone regular biannual reviews of its then-$4 billion line of credit until June 2017.
In exchange, the producer pledged as collateral “substantially all of the company’s assets, including mortgages encumbering 90% of all of the company’s proved oil and gas properties, all hedge contracts and personal property,” a regulatory filing stated.
Chesapeake had finished 2015 about $9.7 billion in debt — the same amount it is carrying now.
Still, company officials noted Tuesday that is down from $10.2 billion of outstanding debt on June 30.
Might a similar deal be in the works now?
The SEC disclosure was characterized by one company official on background as a necessary requirement, but hopefully one that won’t come to fruition.
The source noted Chesapeake had estimated whenever it made its $4 billion deal in January to acquire WildHorse Resources it had anticipated an average price for West Texas Intermediate oil during 2019 of $67.25 a barrel. Actual pricing has been lower than that throughout the year.
“It is a reflection as much of the covenant structure that was put in place over a year ago at much higher prices than it is our underlying business and how we are progressing with our debt reduction,” Nick Dell’Osso, Chesapeake’s chief financial officer, told analysts on Tuesday during a call where company executives discussed the company’s latest quarterly results. “We have been keenly focused on absolute debt reduction and we’ve made great strides.
“We could go out and seek a waiver at any time from our bank group. But at the moment, we continue to be focused on strategic levers that result in permanent debt reduction.”
Third quarter results
Despite how lower commodity prices prompted the going concern warning, Chesapeake reported improved year-over-year third-quarter financial results on Tuesday.
Company officials said they were able to achieve that goal because of an increase of oil in its production mix and a decrease in cash costs so far this year.
The company reported a net loss in the third quarter of 2019 of $61 million, or 6 cents per share, on total revenue of about $2.1 billion. In the third quarter of 2018, Chesapeake reported it had earned a net loss of $146 million, or 19 cents per share, on total revenue of about $2.4 billion.
Its third quarter 2019 adjusted earnings before interest, taxes, depreciation, amortization and exploration costs was $577 million, compared to $584 million the same time a year ago.
Chesapeake CEO Doug Lawler said the company continues to make progress redefining itself from what had been predominantly a natural gas company to one that also is focused on producing oil. He said Tuesday he expects the company’s oil production in 2020 will be “flat,” and that the company expected to spend about $1.3 billion to $1.6 billion for exploration and production costs to keep it there.
“We expect our oil production to grow approximately 10% in the fourth quarter, compared to the third quarter, and we remain on track to meet our 2019 total production and capital expenditure guidance,” Lawler said.
He said the company continues to realize value from assets it acquired with WildHorse Resource Development Corp. in January.
Those assets, which Chesapeake defines as its Brazos Valley resource, produced an average of 36,000 barrels of daily during the period.
Its average daily Brazos Valley oil production in October, officials said, was about 40,000 barrels, setting a new record for the company and beating the previous WildHorse Resource recorded in October 2018, despite the fact that Chesapeake was running only four drilling rigs in the play compared to WildHorse’s five.
Companywide
Chesapeake produced an average of 115,000 barrels of oil daily during the third quarter of 2019, compared to 89,000 the same time a year ago.
Like other oil and gas companies, it continues to improve its efficiencies.
The company ran 17 drilling rigs during the third quarter of 2019, spudding 87 wells, compared to 19 rigs and 84 wells during the same period the previous year.
In the third quarter of 2019, it completed 117 wells and connected 118 to production. In the third quarter of 2018, it completed 81 wells and connected just 75 to production.
It spent about $640 million to do its work in the third quarter of 2019, compared to $551 million the same time a year ago, and officials attributed that increase to the higher numbers of completed and connected wells this year.
Its total average daily production in the third quarter of 2019 was about 478,000 barrels of oil (equivalent), a 3% increase, year-overyear, after adjusting for asset purchases and sales.
Officials said its yearover-year gathering, processing, transportation and general administrative expenses during the third quarter decreased about $1.39 per barrel of oil equivalent, while its production expense climbed about 86 cents per barrel of oil equivalent.
“Our capital efficiency improvements, expected reduction in cash costs and anticipated capital plan position us to target free cash flow in 2020,” Lawler said.
The company’s stock, traded on the New York Stock Exchange under the ticker CHK, opened off 15% from Monday’s closing price of $1.56 per share on Tuesday morning. It ended the day at $1.28 per share, off nearly 18% from Monday’s close.
Chesapeake files ‘going concern’ statement
Chesapeake Energy Corp. plans to slash its drilling and completions budget by 30% in 2020, hoping to keep its oil production relatively stable as it confronts ever-tightening lending restrictions, top company executives said Tuesday.
The company revealed in a regulatory filing with the U.S. Securities and Exchange Commission it could have difficulty maintaining debt ratios required by its credit agreements if oil and natural gas prices remain low.
That is because the company will be required in coming quarters to reduce required ratios of debt to consolidated earnings before interest, taxes, depreciation, amortization and exploration from 5.5 to 1, effective now, to 4 to 1 by March 31, 2021.
Continued depressed pricing for oil and natural gas could affect the company’s ability to meet those requirements and could potentially shut the company’s doors, the filing said.
“Failure to comply with this covenant, if not waived, would result in an event of default under our Chesapeake revolving credit facility, the potential acceleration of outstanding debt there under and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness,” the filing states.
That, it continued, would raise “substantial doubt about our ability to continue as a going concern,” the company stated.
Beyond its plans to cut drilling and completion costs in 2020 and striving to find other operational efficiencies, the filing states the company also is pursuing various other potential transactions and cost-cutting measures that could include reductions in corporate discretionary expenditures, refinancing agreements, capital exchange transactions and even asset divestitures.
“We believe it is probable that these measures, as we continue to implement them, will enable us to comply with our leverage ratio covenant,” the filing states.
There before
One potential deal Chesapeake could make with its lenders could look like another one it made with them in April 2016, getting them to agree to postpone regular biannual reviews of its then-$4 billion line of credit until June 2017.
In exchange, the producer pledged as collateral “substantially all of the company’s assets, including mortgages encumbering 90% of all of the company’s proved oil and gas properties, all hedge contracts and personal property,” a regulatory filing stated.
Chesapeake had finished 2015 about $9.7 billion in debt — the same amount it is carrying now.
Still, company officials noted Tuesday that is down from $10.2 billion of outstanding debt on June 30.
Might a similar deal be in the works now?
The SEC disclosure was characterized by one company official on background as a necessary requirement, but hopefully one that won’t come to fruition.
The source noted Chesapeake had estimated whenever it made its $4 billion deal in January to acquire WildHorse Resources it had anticipated an average price for West Texas Intermediate oil during 2019 of $67.25 a barrel. Actual pricing has been lower than that throughout the year.
“It is a reflection as much of the covenant structure that was put in place over a year ago at much higher prices than it is our underlying business and how we are progressing with our debt reduction,” Nick Dell’Osso, Chesapeake’s chief financial officer, told analysts on Tuesday during a call where company executives discussed the company’s latest quarterly results. “We have been keenly focused on absolute debt reduction and we’ve made great strides.
“We could go out and seek a waiver at any time from our bank group. But at the moment, we continue to be focused on strategic levers that result in permanent debt reduction.”
Third quarter results
Despite how lower commodity prices prompted the going concern warning, Chesapeake reported improved year-over-year third-quarter financial results on Tuesday.
Company officials said they were able to achieve that goal because of an increase of oil in its production mix and a decrease in cash costs so far this year.
The company reported a net loss in the third quarter of 2019 of $61 million, or 6 cents per share, on total revenue of about $2.1 billion. In the third quarter of 2018, Chesapeake reported it had earned a net loss of $146 million, or 19 cents per share, on total revenue of about $2.4 billion.
Its third quarter 2019 adjusted earnings before interest, taxes, depreciation, amortization and exploration costs was $577 million, compared to $584 million the same time a year ago.
Chesapeake CEO Doug Lawler said the company continues to make progress redefining itself from what had been predominantly a natural gas company to one that also is focused on producing oil. He said Tuesday he expects the company’s oil production in 2020 will be “flat,” and that the company expected to spend about $1.3 billion to $1.6 billion for exploration and production costs to keep it there.
“We expect our oil production to grow approximately 10% in the fourth quarter, compared to the third quarter, and we remain on track to meet our 2019 total production and capital expenditure guidance,” Lawler said.
He said the company continues to realize value from assets it acquired with WildHorse Resource Development Corp. in January.
Those assets, which Chesapeake defines as its Brazos Valley resource, produced an average of 36,000 barrels of daily during the period.
Its average daily Brazos Valley oil production in October, officials said, was about 40,000 barrels, setting a new record for the company and beating the previous WildHorse Resource recorded in October 2018, despite the fact that Chesapeake was running only four drilling rigs in the play compared to WildHorse’s five.
Companywide
Chesapeake produced an average of 115,000 barrels of oil daily during the third quarter of 2019, compared to 89,000 the same time a year ago.
Like other oil and gas companies, it continues to improve its efficiencies.
The company ran 17 drilling rigs during the third quarter of 2019, spudding 87 wells, compared to 19 rigs and 84 wells during the same period the previous year.
In the third quarter of 2019, it completed 117 wells and connected 118 to production. In the third quarter of 2018, it completed 81 wells and connected just 75 to production.
It spent about $640 million to do its work in the third quarter of 2019, compared to $551 million the same time a year ago, and officials attributed that increase to the higher numbers of completed and connected wells this year.
Its total average daily production in the third quarter of 2019 was about 478,000 barrels of oil (equivalent), a 3% increase, year-overyear, after adjusting for asset purchases and sales.
Officials said its yearover-year gathering, processing, transportation and general administrative expenses during the third quarter decreased about $1.39 per barrel of oil equivalent, while its production expense climbed about 86 cents per barrel of oil equivalent.
“Our capital efficiency improvements, expected reduction in cash costs and anticipated capital plan position us to target free cash flow in 2020,” Lawler said.
The company’s stock, traded on the New York Stock Exchange under the ticker CHK, opened off 15% from Monday’s closing price of $1.56 per share on Tuesday morning. It ended the day at $1.28 per share, off nearly 18% from Monday’s close.
IF... you're... say an idiot, as to what has been posted in this thread. (of course, not referring to myself...AT ALL) And this aforementioned idiot happens to be a mineral rights owner in Oklahoma and regularly get letters from people wanting to buy his/her rights... "I'll beat anyone's offer" yada, yada, yada... WTF...do they think people are that stupid?! (And this has been happening to the idiot for the past 15 years or so...just guessing... because I am definitely NOT the idiot) Yet, the idiot never sells his .... I mean his or her rights ...because his/her long deceased, wonderful, beautiful mother told him/her they'd be an idiot to sell those rights, and you get a nice bonus to your salary because of not selling... what can I... I mean the "idiot"... expect? Am I...I mean the idiot... expect to make more or less over the next several years. Or is it just too hard to predict?
Asking for the for a friend or the idiot...or WTF?!... you guys can figure it out. I don't understand energy markets... or science really. I spend most of my professional life standing in front of a former lesbian DA in a black robe (who's actually pretty cool)... trying to convince her my clients didn't do it.
Asking for the for a friend or the idiot...or WTF?!... you guys can figure it out. I don't understand energy markets... or science really. I spend most of my professional life standing in front of a former lesbian DA in a black robe (who's actually pretty cool)... trying to convince her my clients didn't do it.
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ask folks in noble county if they’d take the
3k an acre to sell their mins they were offered in 2010
ask folks in grant county who could have paid off their farms, tractors put their kids thru college and equipment the same.
there’s folks around mcallister who sit on huge dry gas reserves a commodity that’s not worth producing right now who had big offers when gas was $10 bucks a foot in 08.
they won’t see those offers again
people in grady county selling for 27k an acre under 12 wells are in a different position
as are the folks with offers
for 12k an acre under one we’ll in 14-7.
can you take that money front loaded invest it and out perform mineral production?
can you flip the cash into a 1031 tax deferred real estate exchange
what if energy prices crash
what if they go sky high
coal? solar? wind?
natural gas vehicles?
electric vehicles?
there is lots of blue sky and no hard fast rule
the best one can do is make well informed decision based on your risk tolerances
having a substantial portion of your net worth in an un diversified mineral position with the prices venture capitalist funds are paying is risky based on what mom said
is not wrong but is risky.
There is risk in everything to do with investments. And everyone will have different personal situations to determine what is best for their position. And the risks could flip 180 degrees in 5, 10 or 20 years.
Just as investing in stocks everyone's personal situation will have their own risks levels that have to weighed individually.
As you said "the best one can do is make well informed decision based on your risk tolerances"
