Brigham Exploration upgraded to Buy from Accumulate at Global Hunter
Continental Resources upgraded to Outpreform by Morgan Keegan
Look for a lot of production and reserve growth from all of our Bakken Shale companies during the second half of this year. Weather related delays in the 2nd quarter build up a backlog of wells that need to be completed and tied into production. There will also be a lot of gathering lines layed this summer that will significantly reduce gathering costs. This is particularly important for the two above.
Upgrades
Re: Upgrades
Rosetta Resources upgraded to Buy from Neutral at Pritchard
Thank God we had a bullish oil storage report today. If the price of oil can stabilize above $80/bbl the Sweet 16 will be fine and most of them are grossly oversold at today's price.
ROSE 2nd report was very good and their outlook in the Eagle Ford is fantastic. The increase in the EUR for each Eagle Ford well is HUGE news. Also, it appears they remain bullish on the potential they have in the Alberta Bakken (northwest Montana). This is bullish news for micro-cap Primary Petroleum.
Highlights for the quarter include:
Recorded 102 percent increase in estimated proved reserves from year-end -- As of June 30, 2011, the Company estimates proved reserves of 970 billion cubic feet of natural gas equivalent ("Bcfe") as compared to 479 Bcfe as of December 31, 2010.
Increased gross estimated ultimate recovery ("EUR") to 10 Bcfe per Gates Ranch Eagle Ford well -- Overall Gates Ranch Eagle Ford well performance continues to exceed expectations. Based on well performance of almost two years in some cases, the Company is revising its gross EUR to 10 Bcfe per well for Gates Ranch. With the increase from the previous EUR estimate of 7.2 Bcfe gross per Eagle Ford well, one typical Gates Ranch well has a before income tax net present value ("BFIT NPV10") of $20 million assuming strip pricing.
Set record levels of daily equivalent gas production and daily total liquids production -- During a period of significant asset divestitures, production increased for the fifth consecutive quarter averaging 161 million cubic feet of natural gas equivalent per day ("MMcfe/d"), an all-time high quarterly record. Oil, condensate and natural gas liquids ("NGLs") production also reached a record high for the quarter, averaging approximately 12,300 barrels per day ("Bbls/d"). Liquids production comprised 46 percent of the total production mix.
Expanded Southern Alberta Basin horizontal drilling program -- Rosetta initiated a three-well horizontal drilling program during the second quarter of 2011 that will continue to test the commerciality of the play. The first horizontal well was spud in the second quarter and drilling operations are now underway on the second and third wells. Rosetta plans to expand the horizontal program to include an additional four wells to be drilled by year end.
Increased daily firm transportation and processing capacity from Eagle Ford shale area by 20 percent -- Rosetta executed an additional transportation agreement in the Eagle Ford shale during the second quarter. The Company now has contracts in place for firm transportation and processing for 245 MMcf/d of gross wellhead production with 105 MMcf/d of capacity currently available. A total of 195 MMcf/d will be available no later than the third quarter of 2012 with total contractual capacity reached in 2013. These contracts will result in access to four separate processing facilities by the fourth quarter 2011.
Raised 2011 previously announced $360 million capital budget to $475 million -- Rosetta has revised its previous capital spending program to take advantage of the timely completion of its divestiture program and accelerate the growth of its shale drilling activities. In total, nearly 85 percent of capital spending will be directed toward development activities in the Eagle Ford shale.
Thank God we had a bullish oil storage report today. If the price of oil can stabilize above $80/bbl the Sweet 16 will be fine and most of them are grossly oversold at today's price.
ROSE 2nd report was very good and their outlook in the Eagle Ford is fantastic. The increase in the EUR for each Eagle Ford well is HUGE news. Also, it appears they remain bullish on the potential they have in the Alberta Bakken (northwest Montana). This is bullish news for micro-cap Primary Petroleum.
Highlights for the quarter include:
Recorded 102 percent increase in estimated proved reserves from year-end -- As of June 30, 2011, the Company estimates proved reserves of 970 billion cubic feet of natural gas equivalent ("Bcfe") as compared to 479 Bcfe as of December 31, 2010.
Increased gross estimated ultimate recovery ("EUR") to 10 Bcfe per Gates Ranch Eagle Ford well -- Overall Gates Ranch Eagle Ford well performance continues to exceed expectations. Based on well performance of almost two years in some cases, the Company is revising its gross EUR to 10 Bcfe per well for Gates Ranch. With the increase from the previous EUR estimate of 7.2 Bcfe gross per Eagle Ford well, one typical Gates Ranch well has a before income tax net present value ("BFIT NPV10") of $20 million assuming strip pricing.
Set record levels of daily equivalent gas production and daily total liquids production -- During a period of significant asset divestitures, production increased for the fifth consecutive quarter averaging 161 million cubic feet of natural gas equivalent per day ("MMcfe/d"), an all-time high quarterly record. Oil, condensate and natural gas liquids ("NGLs") production also reached a record high for the quarter, averaging approximately 12,300 barrels per day ("Bbls/d"). Liquids production comprised 46 percent of the total production mix.
Expanded Southern Alberta Basin horizontal drilling program -- Rosetta initiated a three-well horizontal drilling program during the second quarter of 2011 that will continue to test the commerciality of the play. The first horizontal well was spud in the second quarter and drilling operations are now underway on the second and third wells. Rosetta plans to expand the horizontal program to include an additional four wells to be drilled by year end.
Increased daily firm transportation and processing capacity from Eagle Ford shale area by 20 percent -- Rosetta executed an additional transportation agreement in the Eagle Ford shale during the second quarter. The Company now has contracts in place for firm transportation and processing for 245 MMcf/d of gross wellhead production with 105 MMcf/d of capacity currently available. A total of 195 MMcf/d will be available no later than the third quarter of 2012 with total contractual capacity reached in 2013. These contracts will result in access to four separate processing facilities by the fourth quarter 2011.
Raised 2011 previously announced $360 million capital budget to $475 million -- Rosetta has revised its previous capital spending program to take advantage of the timely completion of its divestiture program and accelerate the growth of its shale drilling activities. In total, nearly 85 percent of capital spending will be directed toward development activities in the Eagle Ford shale.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Upgrades
Brigham Exploration(BEXP_) was upgraded at Stifel Nicolaus from Hold to Buy. Valuation call, based on a $35 price target.