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Operational Updates from Apache, Carrizo, et al.
“Matador held approximately 132,700 net leasehold & mineral acres… about 1/4 were on federal lands” - Matador
Ahead of the Q3 Earnings Season for the US E&P Sector, Operations Updates & Supplemental Information were provided by Apache, Carrizo, and Laredo, among others.
We’ll begin with Apache.
At this point (and it’s not surprising by any means), the image of Apache’s realized NGL & Gas prices, from their US operations, induces a visceral shock:
Apache’s press release also included the following note:
“Previously deferred Alpine High volumes have been returned to production, and the company reiterates its third-quarter guidance of 70-75 thousand barrels of oil equivalent per day from the field”
Apache had previously deferred natural gas production from its Alpine High operations in April, on account of low prices.
Note that they used “barrels of oil equivalent per day” in their Alpine High update.
We are particularly interested in teasing out the product mix & price realizations from the Alpine High in their Q3 results, considering the NGL & Gas Price data above.
CARRIZO & LAREDO.
Carrizo’s Operational Update is worth mentioning, if nothing else, for their hedging note:
“During September, Carrizo took advantage of the rally in commodity prices to add to its 2020 hedge position… This brings the Company’s total hedge position for the year to 25,000 Bbls/d”
From the looks of it, on the Monday following the Aramco attack (and the subsequent spike in crude prices), Carrizo added hedges.
Luck favors the prepared - those hedges are a nice win.
Laredo provided an optimistic update - to summarize the highlights:
Exceeded both oil & total production guidance
Continued to reduce well costs
Reduced the outstanding balance on their secured credit facility by $50MM
CEO Jason Pigott made the statement:
“Wider spacing has improved our well productivity…”
The ability to dial-in well spacing continues to be make-or-break for operational performance.
Matador provided an operational update that clearly has the 2020 US Elections in mind.
Matador explicitly stated:
This update is intended to provide additional information and clarity regarding the Company’s future oil and natural gas development on federal lands.
In Matador’s case, 26% of their Delaware Leasehold is on federal lands.
But that’s beside the point. Federal lands exposure is increasingly becoming a non-trivial risk factor.
We called it (and it was an easy call) - Aramco is delaying their planned IPO.
The official statement on the reasoning behind the delay is that Aramco hopes that their pending Q3 results will bolster investor confidence, following the Sept. 14th attack.
That’s it for this week - we’ll be back on Tuesday.