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

To: Jim P. who wrote (181877)	2/6/2014 8:33:34 PM
From: Jim P.	Read Replies (1) \| Respond to of 206180

My pick PXD update. Message 29299312 I thought and still think the Jo Mill horizontals will prove to be just as economic as the Wolfcamp shales but FANG "Diamondback Energy" has some impressive Spayberry shale wells in Midland county. ir.diamondbackenergy.com Based on the year-end reserve report from Ryder Scott, type curves were adjusted across all areas; the biggest increase in estimated ultimate recovery ("EUR") was in the Lower Spraberry, with a 30% increase from 500 Mboe to 650 Mboe. The Middle Spraberry had a 13% increase from 500 to 565 Mboe, and the Wolfcamp B in the North Area of Diamondback's acreage had a 6% increase from 600 to 638 Mboe. The Kemmer 4210H, the Company's first non-operated lower Spraberry well in Midland County, achieved a peak 24 hour IP rate of 1,076 boe/d (91% oil) and a peak 30 day average rate of 955 boe/d (90% oil), from a 5,043 foot lateral. Normalized for the 10,000 foot laterals that PXD is planning this may be a 2100 barrel a day well in a much cheaper to drill (shallow compared to wolfcamp B QEP Resources recently entered the Midland basin with a purchase in the Eastern part of Midland county. Prime wolfcamp D acreage and very good for other zones account depth, thermal maturity = gas % high enough to have the energy to push the oil along with itto the well bore. ir.qepres.com 26,519 net acres with an average working interest of 94% and a 75% net revenue interest Energy Company, has entered into a definitive agreement to acquire oil and gas properties in the Permian Basin for an aggregate purchase price of approximately $950 million 26519 acres for $950 million is $35,000 and acre. Granted they have production with the acreage but so does PXD. PXD market cap 25 billion. Acreage 900,0000 in the Permian with with 40% of southern 200,000 acres sold to Sinopec so 820,000 acres. But PXD purchased it's MLP PSE last Q and gained 47,000 ish acres so back up to the 900,000 acres and most of PSE acreage in the prime Midland county area. PXD royalty rates over 80% NRI compared to 70.5% for QEP purchase so 14% more valuable potentially. 900,000 acres at $35,000 acre would be $31.5 billion and PXD has a market cap of about $28 billion with operations in the Eagleford, legacy natural gas, and a bit of the Barnett. I am in PXD for the asset in the Permian. Based on a 14% premium to QEP deal for better NRI interest then PXD may have closer to a $260 net asset value in the Permian basin or higher as exploratory drilling proves economics. Not a huge upside compared to the smaller players but margin of safety is significant. PXD earnings out February 10 after market close and conference call February 11. jim