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ConocoPhillips shale output to grow 25% in 2019, CEO says, even as oil slides

ConocoPhillips (NYSE:COP) expects its shale production to increase 25% next year even as crude oil prices tumble, proving the industry’s resilience in volatile markets, CEO Ryan Lance tells Bloomberg.

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ConocoPhillips plans $6.1 billion in capital expenditures in 2019, the oil and gas giant says, which is about the same amount the Houston-based company will spend by the end of 2018.

ConocoPhillips said it said it expects to buy back $3 billion of its own stock. The company plans to increase its target payout to shareholders to more than 30% of cash from operations, up from 20% to 30%. The company said it expects 2019 production to range from 1,300 thousand barrels of oil equivalent per day (MBOED) to 1,350 MBOED.

The CEO says COP’s wells in the Eagle Ford Shale, Permian Basin and Bakken field generate cash when prices hover ~$50/bbl; the company pumped 313K bbl/day from the three regions combined during Q3, or 25% of the company’s global production.

Production growth likely “slows down at $50 but I don’t think it stops at $50 and it certainly continues if prices get back to $60,” Lance says, adding that skeptics thought shale “wouldn’t last long but it’s here, it’s a huge resource and it’s going to be resilient and long lasting.”

ConocoPhillips plans $6.1B capex for 2019, $3B in share buybacks (Dec. 10)

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 Halliburton

The oil-rich Permian basin is slowing – Bad News For Halliburton?

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Halliburton is days away from reporting 2Q19 earnings, and a shift in the narrative regarding North America could be bad news for Halliburton. Why? Below we take a look.

  • High well-decline rates burning cash as investors stay away
  • Smaller producers fight to survive, bigger ones cutting back

The promise of the Permian is shrinking.

Producers in the nation’s oil-rich shale basins are dialing back growth plans in the face of a growing panoply of problems that’s killing returns and keeping skeptical investors at bay. – https://www.bloomberg.com

Zacks Consensus Estimates are projecting earnings of $1.33 per share and revenue of $24.23 billion, which would represent changes of -30% and +0.98%, respectively, from the prior year.

 

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Business

Consolidation In The Pressure Pumping Secture

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Having a quite-fleet might not be enough to survive in the ever-volatile pressure pumping sector. As the fracking companies push for more economically viable frac spreads, the competition is getting fierce. so seeing mergers in the pressure pumping industry is expected, as more companies try to focus on new technology and make their companies viable in the “New oilfield” sector.

That brings us to the Two Houston oilfield services companies that said would merge in an all-stock deal valued at about $2 billion.

“The merger of equals unites two great companies, resulting in a broader portfolio of well completion services across an even greater footprint in the U.S., benefiting our combined employees, shareholders, customers, suppliers, and the communities in which we operate,” Keane CEO Robert Drummond said in the statement.

It’s important to note this volatility is also one of the reasons millennials don’t like to work in the oilfield.

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