Chevron to Boost Spend on Quick-Return Projects

[Marina Schwarz + 1,576]

Chevron Will Spend $10B On Quick Yield Wells So Where From Here For Its Share Price

Quick-yield is the new black in oil (pun unintended).

[Rasmus Jorgensen + 936]

18 minutes ago, Marina Schwarz said:

Chevron Will Spend $10B On Quick Yield Wells So Where From Here For Its Share Price

Quick-yield is the new black in oil (pun unintended).

I have always said the short-cycle nature of shale is a real game-changer. 

[Marina Schwarz + 1,576]

You';re certainly not alone in appreciating this but a lot of praisers seem to forget that short cycle also means quicker well exhaustion rates if that's how it's called. Offshore may be slow to grow but it's got a much longer productive life. I'm not sure if in the end both sorts, conventional and unconventional don't end up costing the same.

[Rasmus Jorgensen + 936]

23 minutes ago, Marina Schwarz said:

You';re certainly not alone in appreciating this but a lot of praisers seem to forget that short cycle also means quicker well exhaustion rates if that's how it's called. Offshore may be slow to grow but it's got a much longer productive life. I'm not sure if in the end both sorts, conventional and unconventional don't end up costing the same.

OPEC and the most "advantaged" offshore oil (I stole the term from BPs Spencer Dale; my favourite oil-writer) will still provide baseload in my view. change happens at the margin. Shale (incl natgas) and renewables will duke it out in the next 3 - 5 years over how the future energy mix will look. 

Edited January 17, 2019 by Rasmus Jorgensen

[Auson + 118]

7 hours ago, Rasmus Jorgensen said:

I have always said the short-cycle nature of shale is a real game-changer. 

Anyone know who the final round bidders are on Chevrons North Sea assets ?

[Rasmus Jorgensen + 936]

3 hours ago, Auson said:

Anyone know who the final round bidders are on Chevrons North Sea assets ?

I remember reading premier oil and Chryasor. 

Personally I would think of Premier as more of a acquisation target...

[PaulG + 21]

4 hours ago, Auson said:

Anyone know who the final round bidders are on Chevrons North Sea assets ?

Chevron sold its 40% stake in Rosebank to Equinor (new name for Statoil)

[Auson + 118]

3 hours ago, Rasmus Jorgensen said:

I remember reading premier oil and Chryasor. 

Personally I would think of Premier as more of a acquisation target...

Premiers market cap is currently only £550m. There was a story in the Sunday TImes saying they might have an equity raise to buy £1.5Bn of Chevrons assets ? Not sure how they would manage that even with Chrysaor.

[Rasmus Jorgensen + 936]

7 hours ago, Auson said:

Premiers market cap is currently only £550m. There was a story in the Sunday TImes saying they might have an equity raise to buy £1.5Bn of Chevrons assets ? Not sure how they would manage that even with Chrysaor.

The problem with Premier as I see it is that they are alrady heavily leveraged. I just can't see them raising GBP 1,5 Bn in this market. I just don't think there is enough potential upside. I would expect that investors looking at betting on an oil-recovery could much more potential upside in offshore oilservice companies. I guess Chrysaor has the same challenge - limited upside. 

Maybe Ineos has better acces to finance as they can cross subsidize.  

[Auson + 118]

4 hours ago, Rasmus Jorgensen said:

The problem with Premier as I see it is that they are alrady heavily leveraged. I just can't see them raising GBP 1,5 Bn in this market. I just don't think there is enough potential upside. I would expect that investors looking at betting on an oil-recovery could much more potential upside in offshore oilservice companies. I guess Chrysaor has the same challenge - limited upside. 

Maybe Ineos has better acces to finance as they can cross subsidize.  

Do you think it would make sense for Ineos to buy Premier, as it has $4Bn in tax credits ?

[Rasmus Jorgensen + 936]

2 minutes ago, Auson said:

Do you think it would make sense for Ineos to buy Premier, as it has $4Bn in tax credits ?

I think the premier UK fields would be a good fit for Ineos and relatively easy to integrate. Ineos also seems to have the rigth profile - work assets to death on as low OPEX as possible. Not sure about the international assets. 

Generally - I think the challenge for the UKCS and most of the North Sea, except Norway, is that it has limited upside i.e. only little room to cut OPEX and big downside i.e. decom liabillity. So, with a few exceptions it is down to how you believe oil price will develop.