And there was much rejoicing in the land.... Gas Prices

[zachary]

Wildhorse is targeting the Cotton Valley and a specific entry in the Bossier Shale. These formations are about at about 9900-11000' down. Then they are doing 1 mile laterals for the most part.

[Gasser64]

Can't wait till they go back up.

[Jimbo]

Thats part of it...but depth is really controlled by the location of the pay zone itself...and its not always perfectly flat and equally thick. Thats where surveys and geosteering come into play.

My wild ass guess would be 8-10000 foot vertical, 4-6000 foot horizontal

Yes, all dependant upon formation. Three forks, bakken, niobrara are generally in the 9k area.

[GrayStangGT]

I don't know if everyone has picked back up, but our work is almost back to normal now.

[Ruffdaddy]

I don't know if everyone has picked back up, but our work is almost back to normal now.

I know a few drillers have mentioned theyre starting to pick back up...but nowhere near normal. Theyre also still at like 20-30% dayrate cuts still...at least for us land based.

What do you do?

[Trip McNeely]

This is the time to be creative and innovative. We still have to turn our production numbers with our budget cut. It's been interesting to say the least. I'm willing to bet rigs wont start ramping up until late 2016. Good time for the pendulum to swing towards pipe line projects which it is up here.

[no4njnk]

I can tell you barely anyone is building new stimulation equipment, the numbers the big boys have sitting in the yards is just sick.

[GrayStangGT]

I know a few drillers have mentioned theyre starting to pick back up...but nowhere near normal. Theyre also still at like 20-30% dayrate cuts still...at least for us land based.

What do you do?

Oilfield Electrical/Power Lines

[Strychnine]

Oilfield Electrical/Power Lines

You're the guy makes all the pumpjacks run?


BTW, I know i posted these somewhere before, but damn, it's hard to comprehend how many pumpjacks run in the PB area until you fly over it.

[Andy@PrimeTuning]

I can tell you barely anyone is building new stimulation equipment, the numbers the big boys have sitting in the yards is just sick.

Yep and the quality used equipment on the market from the smaller companies folding

[Strychnine]

Yep and the quality used equipment on the market from the smaller companies folding

When your entire business strategy hinges on being a pain in the ass to someone bigger than you and then being bought out, life sucks in times like this lol. Not saying they are all like that, but it's not uncommon at all.


Related:

Next threat to U.S. shale: Interest expense on $235 billion debt.

HOUSTON (Bloomberg) -- The debt that fueled the U.S. shale boom now threatens to be its undoing.

Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size.

The burden is becoming heavier after oil prices fell 43% in the past year. Interest payments are eating up more than 10% of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16% increase in the past year, even as revenue shrank.

“The question is, how long do they have that they can get away with this,” said Thomas Watters, an oil and gas credit analyst at Standard & Poor’s in New York. The companies with the lowest credit ratings “are in survival mode,” he said.

The problem for shale drillers is that they’ve consistently spent money faster than they’ve made it, even when oil was $100/bbl. The companies in the Bloomberg index spent $4.15 for every dollar earned selling oil and gas in the first quarter, up from $2.25 a year earlier, while pushing U.S. oil production to the highest in more than 30 years.

“There’s a liquidity issue, and you start looking at the cash burn,” Watters said.

Distressed Debt

Continental borrows at cheaper rates than many of its smaller peers because its debt is investment grade. S&P assigns speculative, or junk, ratings to 45 out of the 62 companies in the Bloomberg index.

“Our cash flow easily covers interest costs, and we expect to continue maintaining our investment-grade credit rating as commodity prices recover,” said Warren Henry, a spokesman for Oklahoma City-based Continental.

Almost $20 billion in bonds issued by the 62 companies are trading at distressed levels, with yields more than 10 percentage points above U.S. Treasuries, as investors demand much higher rates to compensate for the risk that obligations won’t be repaid, data compiled by Bloomberg show.

“Credit markets have played a big role in keeping the entire sector alive,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd., a consulting firm in London.

So far this year, S&P lowered the outlook or downgraded the credit of almost half of the 105 U.S. exploration and production companies that it rates, according to a May report.

Financial Drain

Companies have reduced spending to cope with lower prices, but those cuts will eventually lead to production declines, further shrinking revenue, Watters said.

U.S. oil production will begin to fall this month and will continue to slide until early 2016 as shale drillers reduce spending, the Energy Information Administration said in a June 9 report.

Interest expense can drain a company’s finances. At this time last year, Quicksilver Resources Inc. was spending more than 20% of its revenue on interest. The company missed a debt payment in February and has since filed for bankruptcy. Sabine Oil & Gas LLC missed an interest payment in April and another this month.

Representatives of Fort Worth, Texas-based Quicksilver and Sabine, based in Denver, didn’t return calls or emails seeking comment. Sabine shares fell 96% in the past year to 8.5 cents, and its bonds are trading for less than 23 cents on the dollar.

Corporate Defaults

Oil and gas companies accounted for one-third of the 36 corporate-debt defaults worldwide this year, and missed interest payments are the leading cause of default, according to a May 14 S&P report. Companies including SandRidge Energy Inc., Breitburn Energy Partners LP and Halcon Resources Corp. have raised cash by taking on new debt or issuing new shares.

The new debt issued by Halcon and SandRidge is secured by oil and gas assets, making it less likely that unsecured bondholders will get repaid in a default. Both companies’ older, unsecured bonds are trading at distressed levels. Halcon’s are going for 72 cents on the dollar or less and SandRidge’s for 62 cents or less, according to data compiled by Bloomberg.

The new borrowing can be expensive. Oklahoma City-based SandRidge issued $1.25 billion of second-lien debt this month at 8.75% interest, more than all but one of their existing bonds, records show. The company paid $24 million in fees and will add $109 million a year to interest payments, which are already eating up 29% of its revenue.

“It provides us with liquidity we otherwise wouldn’t have had,” said Justin Lewellen, a SandRidge spokesman. “It bought us some significant time.”

SandRidge’s shares fell 84% in the last year to $1.08.

The financial troubles of the smaller players become amplified with lower oil prices, Sen said.

“We haven’t seen the worst,” she said.

[Strychnine]

http://www.edf.org/energy/companies-wasting-significant-amount-natural-gas-us-federal-and-tribal-lands

According to a new study from the Environmental Defense Fund, in 2013, Wyoming burned, vented and leaked $76 million worth of natural gas from federal and tribal lands.

For Wyoming, they calculated 25 billion cubic feet of gas were wasted, the second highest amount in the nation, after New Mexico. Both states produce most of their oil and gas from federal and tribal lands.

[Denny]

I leaked out about that much after each time I visited Pancho's.


Good times...

[Cooter]

I leaked out about that much after each time I visited Pancho's.


Good times...

You sure you're not Pintinjarra tribe?

[GrayStangGT]

You're the guy makes all the pumpjacks run?

Yup, we make them go up and down