Stuff We Care About Today

PXD Eagle Ford Wrap

From my conversation with PXD yesterday:

• They are disappointed by the mechanical issue here. The well had to be sidetracked and the lateral ultimately was not where they wanted it (high in the Eagle Ford) and also not as exposed to as much of the Eagle Ford as planned (500 of 3,000 feet)
• Everything looked good as far as rock quality and gas content…as expected.
• This in no way changes their thoughts on the Eagle Ford Shale, or in this area. They plan to drill another well in close proximity to this one next year.
• They didn’t have their 3D reprocessed when they drilled this well. They will for the next well.
• The next well in the play will be drilled some 40 miles to the southwest in an undisclosed county in the third quarter.
• They are sticking with the $6 mm figure for well costs here ($4mm to drill and $2 to frac) (first well is more expensive but it’s loaded with tests so that’s to be expected). He would not comment on an EUR but said the ranges out there (4 to 7 Bcfe per well were likely to be reasonable) and did not balk at all at $1 finding costs (which suggests a 6 Bcfe well at $6 mm.
• Also looking at a potential drillsite to the north east.
• Had no comment on APA’s well but had apparently been getting lots of questions about it.

Analysts got on board later in the day:

• Simmons basically said too bad on the mechanical issue, we expect them to come up the learning curve by the next well.
• Johnson Rice upgraded the stock to Overweight after stating the results were very respectable given the number of mechanical issues encountered in the well.
• JP Morgan said the rate per frac stage completed was better than the HK wells to the west .

(ATPG) - I’ll be putting together a piece here soon. Hopefully next week with this one.

Deal Watch:

APC Prices Senior Notes:

• $900 mm senior deal priced in three tranches from 5.75% due in 2014 to 7.95% due in 2039.
• Replaced portion of the $913 mm floating rate notes due in September 2009
• Deal window remains wide open, rates are getting a lot better for senior debt.

Odds & Ends 

Analyst Watch:

• (FSLR) cut to Hold at Soleil