Diversified Gas & Oil Share Discussion Threads

[lord gnome] 05/5/2020 12:56

Indeed. Looks like this is going to be one of the winners from the current oil and gas industry situation. Nice to have got one right for once. Smug git moment thinking of my last top-up purchases at 67p and 87p.

[pro_s2009] 05/5/2020 09:45

No problem getting through 100p.

[dunderheed] 05/5/2020 09:06

What a fantastic company!
Wish I'd bloody bought more of these than the meagre amount I hold!

[lord gnome] 05/5/2020 08:40

Creeping higher. Can it clear £1 without a bit of a retrace?

[shanklin] 04/5/2020 09:24

Several pieces of good news with the:
- improved outlook for gas prices, albeit they are not great at the moment
- imminent full listing
- ongoing success of the well optimisation strategy

[gary1966] 04/5/2020 09:18

lab305,

No dates are correct. June divi already announced. Ex 28/05 and payable 26/06.

[hashertu] 04/5/2020 09:02

Note that 90% of 2020 and 2021 production is hedged ($2.7)
So provided the couterparties don't default, the company looks as well placed as any to weather the current and future storm.

[spangle93] 04/5/2020 08:19

Lab305: apologies, once you explained your rationale last week, you were spot on

"dramatically lower oil prices combined with a fundamentally changed outlook for oil has shale oil developers, particularly within the Permian Basin, moving quickly to significantly reduce spending on new shale oil wells that, as a byproduct, also produce large amounts of associated gas. This behavioral shift is expected to therefore reduce the supply-side of natural gas"

[lab305] 04/5/2020 07:44

Except the date should surely be in June .

[pro_s2009] 04/5/2020 07:29

Yep, all reading well.

[rik shaw] 04/5/2020 07:26

'The Company expects to publish a prospectus on 13 May 2020 to support a transition of its Ordinary Shares from the AIM Market to the Official List and commence trading on the Main Market on 18 May 2020'

and another dividend declared:

[lord gnome] 04/5/2020 07:22

A good update. Reads well and sounds positive. Nothing to be overly concerned about. Looking forward to move to main market. This won't do the share price any harm and we should continue to make progress through the £1 level.Onwards and upwards.

[lab305] 01/5/2020 10:07

The point of posting the article was that large quantities of natural gas produced by shale oil drillers almost as a byproduct will now hopefully drop significantly thereby leading to a recovery in prices to the great benefit of DGO. I consider this extremely relevent to DGO future prospects.

[dunderheed] 01/5/2020 10:02

Absolutely not Spangle you know far more than me buddy and I am only coming from an area of little knowledge which you know what they say about that!

[spangle93] 01/5/2020 09:38

Ha ha, I consider my wrist slapped

[dunderheed] 01/5/2020 09:33

Agree but wtgr surely you need sand influx for shale production?!
I'm only kidding but you get my gist?
At least you don't have to worry about the "geology collapsing" with shale fraccing?
Anyway agree totally 're altering the economics but feel shale will always come back at a higher oil price especially with all in situ infrasructure.
Also agree not relevant to dgoc imho!!
Best of luck all.

[spangle93] 01/5/2020 09:18

Pro - California Resources is all about steam production of heavy oil, nothing to do with fracking, so how it made it into that article is not clear, other that I've read other things by Oil Price and it doesn't feel that their journalists have a strong petrotechnical grasp ;-) They have the fields that nearly sunk San Francisco and turned Bakersfield into a moonscape.

Dunders - it's never ideal to shut in wells, either oil or gas, not just cos of lost revenue and NPV considerations, but also because you're interrupting a dynamic fluid system, with the risk of adverse changes (e.g. water or sand influx, scale precipitation). Conversely DGO is something like 95% gas production (gas wells in later life are easier to manage than oil, should they need to be shut in), but it's not a global market to the same degree, and NPV on these old wells is less of an issue.

[dunderheed] 01/5/2020 08:12

Agree totally Spangle. Shale production assets by their very nature are totally different beasts when compared to cutting production for aging older conventional fields hence with all the existing infra structure are a lot easier to "turn back on" when the oil price determines economic to do so.

[pro_s2009] 01/5/2020 08:11

When you read that, you wonder........how were they allowed to get into this state...


.....California Resources Corp. (NYSE:CRC) is a $133.7M (market cap) company drowning in debt to the tune of more than $4 billion due by the end of 2022. The company's average all-in cost per barrel of $35 means that it's losing ~$20 for each barrel of crude it pumps. Yet, the company is unable to shut-in its wells because they require a continuous injection of steam to keep them alive..........

[spangle93] 01/5/2020 08:04

Not really - shale oil producers have little direct relevance to later life conventional gas resource and infrastructure managers.

But it's interesting if it's true that there are companies waiting to invest in failed assets, especially when the best quality areas of most plays have already been developed. You'd think that people with money would have learned lessons after 2 crashes.

[lab305] 01/5/2020 07:55

As predicted , competition beginning to crack.

The Wave Of Shale Well Closures Has Finally Begun
By Alex Kimani - Apr 30, 2020, 6:00 PM CDT
U.S. shale oil producers have so far held up admirably, hanging on for dear life amidst the biggest oil demand collapse in history. American producers continued to pump at record highs in March, even after dozens of drillers laid out blueprints to limit production.

But with U.S. storage about to hit tank tops in a matter of weeks and the world deep in the throes of the biggest pandemic in modern history, the inevitable has begun to unfold: The arduous and costly process of well shut-ins.


Oil production in the country tumbled sharply to 12.2 million bpd in the third week of April, a good 900,000 bpd less than the record peak of 13.1 million bpd recorded just a month prior. That's a 7% production cut in the space of only a few weeks and the lowest level since July.

A lot more could be on the way.

More Production Cuts

Oklahoma-based Continental Resources (NYSE:CLR), the company controlled by billionaire Harold Hamm, has ceased all its shale operations in North Dakota and shut in most wells in its Bakken oil field totaling roughly 200,000 bpd.


The company, though, has refused to sell its contracted oil to pipelines at negative prices by declaring force majeure.

Continental has defended its stance by pointing out that the coronavirus outbreak has "...brought about conditions under which force majeure applies" while adding that selling its oil at negative prices constitutes waste.

Continental made the risky gamble of betting that economic growth would lift prices and, therefore, left itself heavily exposed to low oil prices by failing to employ the industry's usual playbook of hedging future production with derivatives.

Continental is in good company, though.

Rystad Energy via CNBC has reported that six major U.S. shale producers will shut another 300,000 bpd of crude in May and June. That's ~100,000 bpd more than April cuts, thus bringing the country's total production cuts to 1.2 million bpd. The cuts will come from Continental Resources, ConocoPhillips (NYSE:COP), Cimarex Energy (NYSE:XEC), Enerplus Corporation (NYSE:ERF), Parsley Energy (NYSE:PE) and PDC Energy (NYSE:PDCE).

Continental Resources is set to slash 69,000 bpd in April and nearly 150,000 in May and June while ConocoPhillips will lower output by 125,000 bpd of oil equivalent, including 60,000 bpd of oil.

Premium: The Oil Sector That Will Suffer The Most

Rystad's head of shale research, Artem Abramov, has estimated that the biggest shale fields--Permian, Eagle Ford, and Bakken--will cut a further 900,000 bpd, 250,000 bpd, and 400,000 bpd, respectively, throughout 2Q20, with shut-ins accounting for a staggering 60% in the early stages.

Expensive Shut-Ins

A well shut-in is considered a drastic action of last resort mainly because it can result in huge or even total loss of production.

That's a big consideration in these dire times, where even oilfield values are descending into negative territory due to liabilities such as plugging wells and land remediation.

Chris Atherton, president of EnergyNet, a company that deals in oil and gas operations, undeveloped acreage and royalty interests, has told Forbes that oilfield prices have tumbled from an average price of $42,000 per net flowing barrel per day when oil prices were around $60/barrel to under $20,000 currently. Buyers started getting picky and sellers more desperate in 2019 when oil prices were still relatively high.

Things have gone to the dogs now, with a shut-in field fetching only half the price of a virtually identical field but with oil still flowing.

As Bob Bracket of Bernstein Research revealed last week, "Shut-ins are not easy decisions. When production shuts-in, problems arise. Multi-phase well flows begin to separate out, while problematic hydrates, waxes, asphaltenes form which will have serious economic implications," citing numerous examples of fairly large wells with flows exceeding 1,000 barrels/day that could not be brought back to life after being shut-in.

That's the main reason why even heavily indebted shale companies, including bankrupt ones like Whiting Corp. (NYSE:WLL), insist on continuing to pump at all costs.
Related: The Death Of U.S. Oil

California Resources Corp. (NYSE:CRC) is a $133.7M (market cap) company drowning in debt to the tune of more than $4 billion due by the end of 2022. The company's average all-in cost per barrel of $35 means that it's losing ~$20 for each barrel of crude it pumps. Yet, the company is unable to shut-in its wells because they require a continuous injection of steam to keep them alive.

Deal Mania

A shut-in well is a tough proposition for a prospective oilfield buyer, too, because it's hard to determine how much oil can be coaxed out, especially after a lengthy layoff.

The only solace for the beleaguered oil sector is that there probably won't be a shortage of takers when the worst is finally over.

Atherton says that his company has 40,000 registered users with access to $17 billion in cash ready to make deals. He has predicted that distressed companies will "turn into a flood of assets available" in a year or so.

The bottom hunters will certainly be waiting to pounce, the downside being that many investments in the space could turn worthless due to the swelling wave of bankruptcy.

By Alex Kimani for Oilprice.com

[rik shaw] 23/4/2020 07:26

Quite a decent size share purchase by a NED

[janekane] 22/4/2020 05:21

Hopefully another rise today

[janekane] 21/4/2020 19:13

Sorry lab I did know the oil was a small part of the equations but the markets reaction was pretty much as I thought it would react first thing this morning
The price of oil was minus $22 at one point however the algorithms that the computers applied were soonly manually corrected and oil did bounce back
The opening share price was down but as the oil price recovered so did the sp
The move to the main market should push us conciderably higher even in these difficult times
Hope you hang on for the rise