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WW - If you look back at the old Falcon presentations prior to 2016 you will see a monetising chart putting a valuation on the acreage in Australia at different stages of development with examples of assets sold by different exploration companies. From my recollection, there was a value of $ 4009 per acre where the acreage was proven but not in production. Is this not the target we should be aiming for ? This would equate to $ 5.30 per share. If the Kyalla drilling proves a success, then we are into a stacked play which should increase this valuation even further..... Lots of ifs and but's . However, there is a limit to what can be proven with the remaining 4 wells. I am hoping for $ 5 a share but will be content with anything above $ 3
GLA
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“Road traffic has increased dramatically,” Tracee Bentley, chief executive of the Permian Strategic Partnership, said. “The region has a severe shortage of housing, trained workers, doctors and teachers and needs expanded healthcare facilities and additional classrooms.
“The tremendous growth in Permian production is putting great pressure on local resources and infrastructure, much of which is inadequate to support current needs.”
The partnership, a coalition of 20 energy companies including Exxon Mobil, Chevron and Shell, was formed last year in recognition of the fact that the Permian has outgrown itself. This year Don Evans, commerce secretary under George W Bush, was brought in to chair the organisation, which has committed $100 million towards community infrastructure projects.
Producers and their suppliers face problems unique to the Permian. At one point there was a shortage of fracking sand, so it was brought in from outside the region. Local entrepreneurs soon got round to fixing the problem by setting up local sand mines, but they were so successful that prices collapsed and destroyed many of their businesses.
The availability of water for fracking remains a concern, as does the disposal of toxic wastewater, of which there are up to five barrels for every barrel of oil produced. Such is the lack of local supply that opportunistic investors have bought land rights to control aquifers. Private equity companies are pumping money into water management. Blackstone, the New York private equity giant, invested $500 million this year in Waterfield Midstream, which gathers, treats, recycles and disposes of water.
Permian oil is generally lighter than most grades processed by US refineries, particularly from the Delaware side of the basin, where production is accelerating fastest. This means that it must be mixed with heavier grades or exported, but there are relatively few refineries globally that deal with super-light grades. The knock-on effect is that Permian oil has sold at a discount to heavier grades.
Most of the oil extracted from the Permian is transported via pipeline to the Gulf Coast, with a smaller amount sent to storage facilities in Cushing, Oklahoma. Some is refined locally and a minute proportion is carried away by trucks and trains.
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When their work is done, the crew wheels out to the next drilling pad with accommodation in tow. Then the fracking teams move in and after them wire-liners, coil-tubers, tool-fishers, foam-pumpers and others who put the finishing touches to the well.
Some oil workers, particularly freelance contractors, live in motorhome parks, often because it is the only affordable way to bring their families to the region. Just off Highway 285 between Pecos and Orla, men in oily overalls drink beer and cook on barbecues inside a cluster of about 50 motorhomes, some impressively large.
Bradley, 64, a gas compression engineer, had flown in that day from the Gulf Coast, where he was working on offshore rigs. “This here is where the money’s at, and a ton more than a few years ago,” he said.
To house their growing workforces, oil companies are increasingly turning to “man camps” — temporary accommodation that ranges from dormitories in metal shacks-on-wheels to private en-suite rooms in wood-slatted cabins.
The oil workers live in temporary camps near the rigs in a region with few permanent settlementsThe oil workers live in temporary camps near the rigs in a region with few permanent settlements
CALLAGHAN O'HARE/GETTY IMAGES
Target Hospitality and Permian Lodging, the largest providers of upmarket oil worker accommodation in the region, do not like the man camp moniker. Target’s 800-bed site near Mentone, Texas, has a cinema, a recreation room with pool and card tables, a video games room and a large gym; its site in nearby Pecos has a basketball court and swimming pool. The bedrooms have memory-foam mattresses and blackout curtains. Food is free and available around the clock. Alcohol, drugs and firearms are banned.
Raymond King, a regional manager at Target, spent four and a half years in the Marines. He estimated that about two in five guests at the Mentone site were ex-military, including some who had recently given up lucrative contract security work in war zones for better pay in the Permian. “The three things that make or break us are good food, a good bed and good wifi,” Mr King, 37, said.
After the morning shift departed from Target’s camp near Mentone, the night shift returned. “It’s hard,” said a weary-looking roughneck. “There’s nothing to do. But you can save all your money because you don’t pay for rent, for food, anything. That’s the payoff.
“On the downside, I’ve seen some people, younger people, take all that money home and get into drinking, drugs, gambling. Problem is, if they bring that back with them here, they’re gonna get fired. Then they think about how stupid they were for throwing away a 150k job.”
Behind the story: Growing pains from breakneck expansion
The runaway success of the Permian shale industry and the prospect of further rapid expansion is causing growing pains for the region, which, being in a desert, is already low on infrastructure (James Dean writes).
THE SHALE REVOLUTION
Huge rewards lure shale oil workers to the desert ‘war zone’
The second part of a series on fracking’s impact on the US economy takes a look at the vast camps in the Permian Basin
James Dean
August 27 2019, 12:01am,
The Times
Energy
United States
Teams work alternating 12-hour shifts, seven days a week, two weeks on and two off
Teams work alternating 12-hour shifts, seven days a week, two weeks on and two off
GETTY IMAGES
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In the Permian Basin, a high school dropout can earn $60,000 a year washing dishes in an oil worker camp. If they get on to a drill rig, they could start on as much as $100,000. A former Marine with explosives experience can immediately pull in $150,000 and more than double their salary in three years. Truck drivers expect to earn six figures at least.
The downside is that they must live and work in one of the most desolate, featureless and dangerous places on earth. The shale oilfields are in the Chihuahuan desert, a sandy landscape of creosote bushes, mesquite and yucca that straddles the United States and Mexico. Huge sandstorms and thunderstorms kick up with little warning and in the summer months the temperature regularly exceeds 40C. With the incessant rumbling of heavy machinery and orange plumes of burning gas, the Permian bears an uncanny resemblance to a Middle East war zone.
“People die,” said David Johnson, a roughneck who has worked in the region for seven years. “It’s a dangerous job.” He is a derrickhand for Precision Drilling, a giant rig contractor. “It’s non-stop busy, you’re always on your toes,” he said. “On an average day in summer, you pretty much just drink water and sweat.
“The rigs round here that are burning down — it’s basically bad drilling practices. That comes from people not paying attention, people getting in a hurry and neglecting safety. It’s been happening pretty often lately.”
Mr Johnson, 37, said that most roughnecks have a love-hate relationship with the job. “The work’s tough and it gets tiring,” he said. “The money’s good. But they’re paying for you to be away from your family, to work in the harsh weather conditions. It doesn’t take much to lose a finger or lose your life.”
Oil workers have flooded into the Permian since the turn of the decade but the region supports relatively few permanent communities. Outside of small towns and cities there are not many places for workers to stay. Even no-frills motels can charge upwards of $500 a night because demand is so high and supply so limited.
The average drill rig may be staffed by 12 roughnecks and two rig managers, split into two teams working alternating 12-hour shifts. They work for seven days a week, usually two weeks on and two weeks off, although rotations are often longer. Usually they live in mobile homes next to the rigs and sometimes in temporary camps. Drilling takes between 15 and 19 days if there are no setbacks. When their work is done, the crew wheels out to th
Please see page 2 of the attached Anadarko company presentation with financial details for 2017.
https://www.anadarko.com/content/documents/apc/news/Fact_Sheets/Corporate_Fact_Sheet.pdf
Note the proven reserve figures (converted to 8.5tcf of gas equivalent IMO). Now let your mind wander and think of where we are hopefully heading in the Beetaloo.
https://www.forbes.com/sites/christopherhelman/2019/04/12/chevrons-50-billion-deal-for-anadarko-creates-leading-permian-powerhouse/
Chevron's $50 Billion Deal For Anadarko Creates Leading Permian Powerhouse
CHEVRON PERMIAN
Much of Chevron's Permian acreage was inherited from railroad land grants and thus carries no royalty burden. © 2018 BLOOMBERG FINANCE LP
Chevron’s acquisition of Anadarko Petroleum will cement the oil giant as the leading operator in the most exciting oilfield in the world, giving it a 75-mile-wide corridor across the heart of the Permian. Prior to the $50 billion deal, Chevron already had 2.2 million net acres in the Permian basin of west Texas and southeast New Mexico. Anadarko brings about 250,000 acres, much of it adjacent to Chevron’s position.
Analyst Jarand Rystad of Rystad Energy calls Anadarko’s position the “sweetest spot” of the western portion of the Permian. He expects the combined company to emerge as the clear leader in production growth, boosting its Permian output from 500,000 barrels per day to nearly 1.6 million bpd in 2025.
The past ten years of the fracking revolution has seen oil flows from the Permian, long thought to be a worn-out field past its prime, surge from fewer than a million barrels per day to more than 4 million bpd now. After years of optimizing the drilling and fracking of Permian oil wells, investments in the region are now seen as relatively low risk—breaking even at an oil price of around $45/bbl. Anadarko also brings access to copious pipeline assets that can support fast production growth.
The deal is the biggest in the oil industry since Royal Dutch Shell bought BG for $53 billion in 2015. In addition to the Permian assets, Chevron also adds 400,000 acres in Colorado, deepwater fields in the Gulf of Mexico and a liquefied natural gas mega-project in Mozambique set to begin construction.
Bolt-on acreage in a Permian sweet spot.
In the heart of the Permian's Delaware basin, Anadarko's acreage (yellow) sits amid Chevron's (blue). COURTESY CHEVRON
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Chevron will pay $65 per Anadarko share (39% premium), financing the deal with $8 billion in cash on hand plus the issuance of 200 million shares. Adding Chevron’s 3 million bpd of oil and gas production to Anadarko’s 600,000, the combined company will trail only ExxonMobil among publicly traded oil giants. (Exxon made its own Permian deal two years ago.) Combined 2018 pro forma free cash flow was $36.5 billion. Analyst Roy Martin of WoodMackenzie says “Chevron now joins the ranks of the ultramajors — and the big three becomes the big four.” (As in Exxon, Chevron, Shell, BP.)
The deal is a big move for Chevron CEO Mike Wirth, and a keen exit for Anadarko CEO Al Walker, who owns about $20 million worth of shares at the deal price. Integration of the companies will be headed by Chevron EVP Joe Geagea. According to analysts, t