Some producers are concerned that the new U.S. upstream master limited partnerships (MLPs) will ruin the domestic business, that more and more assets will go into harvest mode and not see reinvestment. If these assets go back on the market years from now for exploration companies to take another whack at them, there may be fewer explorationists in the industry and even fewer able to figure out how to crack the code on surfacing the balance of the remaining reserves. Yet, there are many more producers-and investors-excited about the emergence of the new U.S. E&P MLPs. They're excited about prices they can get for properties they will sell to them, and they're busy considering their own portfolios for assets they can spin out as MLPs, selling shares into the public market. Some are changing their existing business plan to explore less and develop more-to focus on turning their proved undeveloped (PUD) reserves into proved developed producing (PDP), and are paying less attention to probable reserves right now. "I want to create an asset package an MLP will buy," says the chief executive of a Texas-focused producer. One problem: this operator's focus is the exploration-oriented East Texas Bossier and Austin Chalk. Neither of these types of assets are the kind the MLPs are seeking. These assets involve exploration; MLPs seek production. They are "P" companies, rather than E&P companies. For more on this, see the July issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
Recommended Reading
Smart Tech Moves to the Hazardous Frontlines of Drilling
2024-10-08 - In the quest for efficiency and safety, companies such as Caterpillar are harnessing smart technology on drilling rigs to create a suite of technology that can interface old and new equipment.
Amid Flagging US Activity, OFS Sector Looks to 2025—and Overseas
2024-08-13 - Despite a slowdown in U.S. activity expected to last until 2025, overseas and offshore markets helped the oilfield services sector deliver solid second-quarter results.
Nabors’ High-spec Rigs Help Keep Lower 48 Revenue Stable in 2Q
2024-07-25 - Nabors’ second quarter EBITDA was down 1% quarter-over-quarter but the company sees signs of increased drilling activity in international markets the second half of the year.
US Rig Count Makes Biggest Monthly Jump Since November 2022
2024-07-26 - The oil and gas rig count, an early indicator of future output, rose by three to 589 in the week to July 26.
US Drillers Cut Oil, Gas Rigs for Third Week in a Row, Baker Hughes Says
2024-08-30 - The rig count is 8% below this time last year, according to Baker Hughes.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.