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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (130339)	4/20/2010 2:39:12 PM
From: Dennis Roth	3 Recommendations Read Replies (1) \| Respond to of 206184

Oil and U.S. Resiliency Logging While Investing OFS Weekly Analysis 43 pages, 34 exhibits Link: sendspace.com Excerpt: Oil and U.S. resiliency. Last week brought more momentum to the U.S. E&P push into oil resources, including Petrohawk’s allocation of $175MM of capital from the Haynesville to the oil and condensate areas of the Eagle Ford, Carrizo’s acquisition of 6.8K acres in the Eagle Ford and 50K net acres in the Niobrara oil play in Colorado, and EOG’s efforts to take oil to 45% of production by 2012. The oil and liquids-rich gas push bodes well for U.S. service. The service intensity of these liquids shale plays suggests fairly neutral service implications if E&Ps simply swap spending/activity away from gassy shales and into “liquids” ones. And to the degree spending shifts to these "liquids" plays and away from conventional sources of gas—which have on average still worse economics than many of the shale gas sources—there is potential for a favorable mix shift. We offer resiliency example in Hydraulic Fracturing. To illustrate, we estimate the U.S. hydraulic fracturing market is 88% utilized currently. With a 225 net rig count decline—primarily in conventional gas basins—but with a 35- rig increase in oil shales, we believe frac demand could grow in absolute terms (perhaps by 300K hp) and utilization could hold steady on even a growing supply base toward year-end. And if there is a general increase in frac intensity, e.g. from adding completion (and therefore frac) stages, we can imagine utilization tightening. See Exhibit 1. For further discussion please see our note Tight Squeeze; A Review of U.S. Hydraulic Fracturing, sendspace.com , published April 12, 2010.