CLR made some interesting "headlines" the other day with the release of their 2016 Capital Budget and expectations.
CLR projecting 2015 avg prod of 220Mboepd. Falls in line with the projected 25% increase over 2014's 175Mboepd. Overall corp decline rates looks to be in the 20%-25% range (depending on how focused you are on oil as oil now is about 60% of total production)
2016 is projected at 200Mboepd for production and roughly speaking $784M for D&C Capex.
Using same methodology in the model:
* Decline rate of "just" 20% (on 2015 avg of 22o) says that's 44 Mboepd given up which leaves 176Mboepd from existing capital invested
* New production of 24 Mboed required to reach the 200Mboepd 2016 target.
* Required production of 68Mboepd to achieved to forecast 200Mboepd 2016 target avg production
* $784M for D&C Capex implies the Capital Intensity of ~ $11,500boepd ($784M/68Mboped)
Compare that to the numbers being used for SSN and the reasoning I gave for that. Remember that CLR is obviously massive economy of scale but also they are much more gassy.
Just to double check my numbers (in case I am making this stuff up), CLR also put out an investor presentation back in Nov'15.
Slide 17 actually discusses Capital Efficiency (from their return point of view). They show how in the Bakken only they have improved from 2014 $21.50 boepd to $10.67 boepd for their F&D costs. So the math comes to $10.67 x 68Mboepd = $725M required D&C capital ... but remember that is only the Bakken cost model and if you blended the old cost and new cost you come up with $1,202M.
CLR also noted Cash Flow breakeven at WTI $37 Bbl.
SSN Price at posting:
0.4¢ Sentiment: None Disclosure: Not Held
