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Sandridge Energy
Overview
Company has 1,4 TCF of gas reserves, owns 44 drilling rigs, and major oil service business. Employees own 28%, and with board 37% ownership of company.
Company was an IPO in 2007 – focused on West Texas overthrust, where two continental plates collided millions of years ago leading to multiple traps, etc.
Likes the Pinon Field – 2600 locations and 260 wells to be drilled this year.
2008 is “year of exploration.”
8% growth in production in 2008 – but expect much higher in future.
Pinon field is south of Permian basin – where major CO 2 infrastructure is located. Sandridge has CO 2 reserves in its acreage at the Pinon Field.
Main focus of company capital spending is on E and P – don’t need acquisitions – debt to capital target is 33-50%, and the company hedges opportunistically.
Ensco International
Company has an excellent track record meeting Wall Street expectations – 33 consecutive quarters.
ESV had best safety record in 2007 in company history working toward zero incidents per year.
Highest operating margin in industry – 65% in 2007.
ROCE – 28% in 2007.
Average age of fleet is 5.5 years – company is adjusting rig age for upgrades.
ESV is making a substantial investment in deepwater – all new builds are contracted or have a letter of intent. Revenue base of company shifting from Gulf of Mexico to international. ESV now has 9% of ultra deepwater market.
International markets will continue to be strong – believes that demand will absorb new builds - North Sea market still strong – expected collapse in gas prices there did not materialize.
Iran offshore – 12 rig shortage there.
ESV has 31 rigs in the international market;
North Sea – stable - 10 rigs.
Middle East – all under priced relative to market – will roll off and be priced higher - 9 rigs.
Of the 12 left, 8 are under long term contracts.
Gulf of Mexico – supply keeps shrinking – 79 in 2008 versus 156 in 2001.
Conoco-Phillips
COP discussed business environment that they are operating in. OECD demand is flat – growth from Middle East, China and India. Resource nationalization and heightened competition to continue. They are still bullish on oil prices.
Demand to grow to 120 million barrels a day by 2030 – COP can’t see industry meeting that demand.
Cost of new supply is driving prices higher in oil markets.
Natural gas – COP has always contested the estimate of the amount of LNG that will be imported to U.S.
