[ROCKMAN]

If I've gotten the deatils right the CEO of Chesapeake (Aubrey) ahd a really bad week:

I saw a report that he sold $100,000,000 in stock recently. A friend had more details: he didn't sell...he had his entire CHK position (33 million shares) called on his margin account and it was liquidated. So from the stock high of $70/share ($2.3 billion) he was reduced to ZERO. Now that's a really bad week.

Now you have to wonder who bought the stock (around 7 - 8% of the company I'm told).They have to be prime for a takeover. Just a question of whether XTO or others likes what they.

[BigTex]

Devon will definitely lead the way in any rally of the independents.

Occidental is also attractive at current prices.

Schlumberger will lead the way on the oil services side.

DVN and SLB will outperform their peers, because these are the two companies that institutional investors seem to currently like and be familiar with, in addition to having great numbers.

Devon had been trading more or less in line with CVX and XOM for a couple of years, but this past spring something happened and DVN just took off and outperformed everyone else for months.

Stay away from RIG. I think a snake bit them or something, but they will lag the sector, even though there is no reason for this great company to have a P/E of 4.

HAL and NOV are interesting at current prices. They've been really beaten down.

[ROCKMAN]

I’ve been a fan of DVN for a good while. Friday they were trading at about 50% of their high just a few months ago. I wish I could buy more but I hit my equity limit and I try my best to follow my rules. Given their heavy NG positions, the shut-in NG in the GOM that should be going to storage for the winter peak and the NWS prediction of a "much colder than normal" this winter I won’t be surprised to see it double by Feb. They only thing that might hold them back is if they pick up Chesapeake. That might drop them a bit in the short run but could make them unstoppable in the long term. Probably should research their debt position to see if they can still fund next years budget. DVN is big in the N TX and N La. Unconv NG. CHK just bought 13,000 net mineral acres in the Haynesville Shale play from IP for $264 million last Sept. This would be a huge bonus for DVN if they can grab CHK.

[Strat]

I like APC and Oxy.

Anadarko produces nearly 500k BOE a day and they have a market cap of only 15 billion. Seems like a really good value play.

Everyone seems to like DVN but Oxy seems to be the much better buy right now. DVN has a market Cap of 3O billion vs Oxy 37 billion but Oxy generally doubles Devon's net income. Last quarter, Oxy earned 2.3 billion vs 1 billion for DVN. I bet Oxy will double DVN earnings this quarter as well. Oxy has virtually no debt and DVN has substantial debt. Oxy's super strong balance sheet may enable them to acquire assets in West Texas and San Juaquin Valley at great prices. Oxy has great management with Irani and Chazen at the helm. A lot more upside in the stock price with Oxy vs DVN IMO.

XTO is all natural gas and that makes me a little nervous. I would prefer a crude oil/natural gas combination.

[ROCKMAN]

Good point about the acquisition possibilities Strat. That could be the hot play for the next 6 months or more. At least until OPEC can become a real cartel someday.

[copious.abundance]

I think it's about time I added something to this thread.

'Twas reading today's conference call for Devon Energy and one of the guys from Devon was talking about a new part of the Woodford being opened up which they're calling the "Cana" play. It's just west of Oklahoma City. To date most of the gas drilling in the Woodford has been in eastern Oklahoma.

Of interest is the little geological lesson in the bolded part. Deeper stuff is not always "worse."

--> Seeking Alpha <--

[...]

First is an emerging Mid-continent shale play called Cana. Named for Canadian county in Oklahoma, the Cana play targets the deep Woodford Shale down in the Anadarko Basin. Devon is the largest leaseholder in the play with 112,000 net acres located in Canadian Blaine and Kettle (ph) Counties in West Central Oklahoma.

Although the shale and the clean-up play is the same shale formation found in the Oklahoma basin and Eastern Oklahoma, there are some important differences. The shale in the Cana play is found at greater depths ranging from 11,500 feet to 14,500 feet or an average about 5000 feet deeper than the shale found in Eastern Oklahoma.

The higher pressures at these depths result in greater storage capacity in the reservoir. Initial gas in place estimates for the Cana Woodford indicate upwards of 200 Bcf per square mile, with recovery factors expected to be similar to those found in the best shale plays in the country.

This gives us net risk potential on our existing acreage position in Cana of 4 trillion cubic feet equivalents. We drilled our first horizontal well in the Cana play about 18 months ago and now have completed 10 operated wells in the play including seven long lateral horizontals.

Initial well results indicate average ultimate recoveries in excess of 6 Bcf per well. In fact, four of the long lateral wells where we have significant production history have estimated ultimate recoveries in excess of 8 Bcf per well. We have been de-risking our Cana acreage and perfecting our completions and have achieved repeatable commercial results.

As we move into full scale development, drilling and completion costs should average less than $9 million per well based on the current cost environment. As we continue to optimize drilling and completion techniques and apply practices as we perfected through the thousands of successful wells in the Barnett Shale, we believe we can reduce well costs and further enhance per well recoveries.

Adding to the appeal of Cana play is the liquids rich gas with up to 1300 MMBtu per Mcf. Each development plans will likely include building up processing facility to capture additional value, just as we have done in the Barnett and the Oklahoma Woodford.

In 2009, we plan to drill approximately 27 operated horizontal Cana wells with a four rig program. We also have acquired 3D seismic over most of the play area, and we'll require acquire seismic over the remaining acreage during 2009 to further evaluate and de-risk the play.

[...]

More gas!

I've been waiting to see if anything pops up about oil in the Woodford as the opening article suggested, but so far have only been seeing stuff about gas.

[Blacksmith]

More unaudited reserves?

[Blacksmith]

keep rockman working.

[emersonbiggins]

Word in the field is that Chesapeake is winding down drilling ops down near Ardmore in April, and sending those rigs up to the Marcellus. At these prices, I'm sure there will be a few rigs simply laid down as well.

/grain of salt

[ROCKMAN]

I wish that were true Blacksmith. My client is big into UNG but that's not my area. Was big anyway: they'll be dropping 80% of their shale gas rigs in the next month. But they are cutting back other areas also. I'll probably be sent to the house in March. But there's still some work overseas. Might end up back offshore Africa. Takes longer to scale back those operations.

[Blacksmith]

Rockman.

For me this will be the last horay, after 41 years it's time to retire.

[ROCKMAN]

I know what you mean blackie. I'm at the 33 year mark so I a have a few more dues to pay.

[Maddog78]

Got great news today.
My UNG operator renewed my contract for one more yr. effective March 31st.
We are in the Woodford btw.
Don't know that much about this OKC play.
We had 2 rigs over there but are shutting them down.


2 weeks ago Devon was fraccing 1 mile away from one of our laterals and destroyed 2500 bbls of our oil based mud.
They are not our friends right now.

[copious.abundance]

keep rockman working.

Keep Maddog working, too.

[Maddog78]

Yup, exactly.

Thanks.

[copious.abundance]

Well Maddog, since you'll be working this thing you're gonna have to keep us updated. We wanna know!

[ROCKMAN]

Well Maddog...if you can't look after you OBM you shouldn't play with it.

Just a little oil field trash talk folks.

[Maddog78]

I exaggerated the animosity in that post.

We keep tabs on off block operators activities and even have a Halco rep at our a.m. meetings but somehow this fracc slipped through the cracks.

[ROCKMAN]

Hell dog...you should hope Devon doesn't invoice you for part of the frac.

If we can't harrass each the days would get boring. Besides, I'm sure it amuses the civilians.

[Maddog78]

Ha, yeah.

Better yet, since it was Baroid mud maybe Halco should cover the fracc and the mud?


For the civilians out there, this ain't mud like in your backyard.
The cost to replace this stuff was about $200,000.
btw, Halliburton owns Baroid.