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RRC
Posted: Mon Aug 09, 2021 7:43 am
by Fraser921
Just reviewed your new report on Rrc
Question on calculating p1. Do they use strip pricing in the analysis or strip adjusted for hedges? Thanks
Does amortization change quarterly or just once a year?
I noticed CLR took theirs down H2 in guidance.
Re: RRC
Posted: Mon Aug 09, 2021 3:58 pm
by dan_s
3rd party reserve reports don't consider the impact of hedges. They are based on the trailing 12-month prices, so very conservative at year-end 2020.
DD&A rates do change slightly each quarter based on new wells being added, but the big change is at year-end based on the 3rd party reserve reports which are required of all public upstream companies. During periods of big moves in commodity prices, the DD&A rates can change a lot from year to year.
Also, "Full Cost Companies" apply DD&A to the entire full cost pool. "Successful Efforts Companies" apply DD&A rates on an individual property basis. SEC rules could not be more confusing and misleading if they tried.