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Hey Jesse. Thanks for your DD. Based on what you know so far, what pps do you believe is possible here? All in your opinion of course.
CEGX
Hi! Yes, I did. Thank you! I'll have to check out the book as well. It's good to know you found it helpful. Good luck to all of us!
DTII
He probably meant 10 cents
DTII
So you think there may not be an RS and that the current pps might be very cheap still? Do we know when we will hear from Redman?
AEPP
Hey Jesse, check out this article. It might bode well for CEGX, yes?
http://www.marketwatch.com/story/in-the-midst-of-an-oil-price-slump-one-area-in-texas-is-enjoying-a-bit-of-a-boom-2017-04-07?mod=mw_share_twitter
CEGX
April 8, 2017: In the midst of an oil-price slump, one area in Texas is enjoying a bit of a boom
In the midst of an oil-price slump, one area in Texas is enjoying a bit of a boom
By Claudia Assis
Published: Apr 8, 2017 11:33 a.m. ET
$17 billion of deals have taken place in the Permian Basin so far in 2017
MarketWatch photo illustration/Getty Images, iStockphoto
Oil markets may remain in the grip of a prolonged slump, yet one oil-and-gas producing area in the U.S. is at the center of a modern-day land grab that’s made it a bright spot for energy deals.
From energy giants such as Exxon Mobil Corp. XOM, -0.30% to scrappier exploration and production outfits, companies have raced to the Permian Basin, an area roughly 250 miles wide by 300 miles long located mostly in West Texas.
Mergers and acquisitions involving the Permian are worth $17 billion so far this year, including corporate acquisitions and asset buys, according to IHS Markit. That compares with nearly $26 billion in the area’s transactions for all of 2016 and $11 billion in 2012.
Permian deals are worth 76% of the total value of oil and gas exploration deals in the U.S. in 2017; that share was 41% in 2016 and 13% in 2012
“The interest you see in the Permian is legitimate,” said Ganesh Jois, a fund manager with Goldman Sachs Asset Management’s energy and infrastructure team. “There’s no doubt that there’s tremendous resources there.”
The bigger question, however, is whether oil futures prices will cooperate, he said.
Read more: Chevron’s road back to profitability goes through Texas’ Permian Basin
Most companies in the Permian forecast 15% to 20% production growth for this year, a pace that assumes oil futures prices around $50 to $55 a barrel. Prices below $45 a barrel, however, could crimp production.
As more companies move to the Permian, land prices have risen. According to IHS Markit, the average acre in the Permian sold for about $6,000 in 2012, while one acre sold for more than $29,000 last year and these days is worth some $22,000, although it is hard to speak of averages as prices vary according to underlying, potential value that the land is perceived to hold.
Early last year, one acre might have sold for $30,000 or $35,000; by the fall of 2016, one acre was going for about $45,000, GSAM’s Jois said. “In the past 15 months or so, we’ve seen a bit of a land grab.”
Even as prices drifted lower, interest in the Permian was sustained, which helped it gain its notoriety. That’s because the Permian benefits from being a long-established oil-producing region.
“It’s a mature region with a lot of infrastructure,” said Deborah Byers, a managing partner and U.S. oil and gas leader at consultancy EY, formerly Ernst & Young. “There’s 90 years of history there.”
A web of support
That precious infrastructure supports exploration and connects production to major markets, a web of support that newer oil plays may lack and one that keeps costs relatively low, keeping the Permian attractive amid lower futures prices.
See also: Texas’ Permian Basin is only U.S. oil-producing region where production will rise
Perry and Franken Have a 'Saturday Night Live' Moment
(0:42)
Gov. Rick Perry's nomination hearing for Energy Secretary took a light turn when he accidentally made a sexual innuendo to Sen. Al Franken. Photo: AP
Oil majors mostly left the Permian and other inland U.S. areas two decades ago to pursue deepwater exploration off the Gulf of Mexico, leaving smaller independent companies to continue to coax oil and gas from the area.
New uses of technology, a better understanding of geology, and geopolitical forces have made the Permian a renewed success, and the majors are coming back.
Major deals in the Permian this year include Exxon’s $5.6 billion deal to buy companies owned by a prominent Fort Worth, Texas, family; Noble Energy Inc.’s NBL, -0.32% $3.4 billion deal to buy assets and acres from Clayton Williams Energy, and Parsley Energy Inc. PE, -0.82% $2.8 billion deal with Double Eagle Energy Inc. assets.
When oil prices are weaker, the Permian is one of the few places where it remains economical to drill, said Sven del Pozzo, an equity analyst with IHS Markit.
The path to understanding the Permian’s lasting allure amid oil prices’ wild ride in the past two and a half years starts at understanding its stacked “pay zones.”
A pay zone is a pocket that contains oil and gas that are economically and technically feasible to produce. In the Permian, there is no single pay zone, instead there are several, stacked like giant rock pancakes.
Related: Lower profits for energy companies dampen hopes for sector recovery
Embedded in those multilayered stacks, there’s “tight oil,” and extracting the oil and gas trapped in that geological quirk has become more economically feasible in the last few decades, with evolving strategies that combine horizontal drilling and hydraulic fracturing.
Horizontal drilling is particularly efficient in the Permian and other “tight oil” formations. That’s drilling a well sideways rather than straight down, and in the process exposing more oil-rich rock to the well bore than what would be exposed by drilling a conventional vertical well.
Opportunities in natural-gas processing
For an investor, Jois said he and his colleagues are more optimistic about infrastructure companies than producers. If the 15% to 20% growth that exploration and production companies are expecting comes to pass, it would bode well for the so-called “midstream” companies, such as pipeline operators and natural-gas liquids processors, he said.
In going for such companies, investors are not taking on direct oil-price risk, he said. For the Permian in particular, there’s a “fair amount” of natural gas that needs to be processed, stored, and transported, Jois said.
Gas processing may be the area that will experience the most growth in the Permian, as more oil-pipeline capacity is coming on line, he said.
Among large natural-gas midstream companies with a presence in the Permian are Energy Transfer Partners LP ETP, -0.38% Enterprise Products Partners LP EPD, +0.11% and Targa Resources Corp. TRGP, +0.05%
Among companies with a large presence in the Permian that are often among Wall Street analyst picks are DiamondBack Energy Inc. FANG, -0.28% Concho Resources Inc. CXO, -0.59% and Pioneer Natural Resources Co. PXD, -0.32%
No one is sure how long the Permian boom might last.
New technology uses and efficiencies may encourage companies to revisit mature areas, such as deepwater Gulf of Mexico, which is already starting to happen, said EY’s Byers, who is based in Houston.
Major companies such as Royal Dutch Shell PLC. RDS.A, +0.32% and Chevron Corp. CVX, -0.39% bid heavily for Gulf of Mexico’s deepwater blocks in a government auction in late March.
For now, the interest in the Permian is a source of some amusement and surprise in Texas, she said.
“We’re like, ‘we’ve seen that rodeo before.’”
The iShares U.S. Energy exchange-traded fund IYE, -0.49% has fallen 6.3% in the year so far, while the S&P 500 SPX, -0.08% has gained 5%.
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http://www.marketwatch.com/story/in-the-midst-of-an-oil-price-slump-one-area-in-texas-is-enjoying-a-bit-of-a-boom-2017-04-07?mod=mw_share_twitter
Thanks for the explanation. So that sounds like a good thing that he ran out of shares to sell is that correct?
DTII
What is the meaning of this cross I see people mentioning? Could someone explain? Was that a 5 million share buy? And if so, that is a good thing right?
DTII
Maybe because the price was under a penny for too long? It gets reinstated when the price stays above a penny for more than 30 days believe. I'm not sure though. This is just my opinion.
DTII
Nice. And you do not believe that it will be necessary to do an RS?
CEGX
Good morning, Jesse! In your opinion do you believe that a $1 pps is achievable here?
TIA
CEGX
Any update on that report you were referring to that was due out in March?
FDMF
Thank you very much. Appreciate the reply. I will look into it.
In your opinion, what kind of pps is possible here? Perhaps a move like OWCP?
Thanks again!
CEGX
Could someone explain what kind of news is expected from this company and why there is so much excitement? Trying to learn. Also, what is the share structure here?
Thanks in advance.
CEGX
Could someone point me to some DD that has been done here? What are the plans for the company and what is the potential value here? Thanks in advance.
CEGX
Wow nice find!
MMEX
Do we know the accurate and most up to date share structure here include authorized, outstanding and float? If no, how and when can we find out?
TIA
CEGX
Does anyone know the accurate SS here?
Hey could you point to what that source of short interest is? Learning here. Thanks!
THANK YOU!
DTII
Think we run soon?
DTII
NEW ARTICLE: MMEX Resources Corp (OTC:MMEX) Newest Texas Refineries Plan to Turn Shale Into Fuel for Mexico
http://www.otcmarkets.net/otcqpink/mmex-resources-corp-otcmmex-newest-texas-refineries-plan-to-turn-shale-into-fuel-for-mexico/
MMEX
PLEASE STICKIE THIS. THANK YOU!
AEPP
Expert: Permian Basin’s place in world market secure
http://www.gosanangelo.com/story/money/business/2017/03/30/expert-permian-basins-place-world-market-secure/99817982/
MMEX
LP, what do you think is a realistic pps for MMEX in the near term if everything goes as we expect?
Thanks in advance for your opinion.
MMEX
KP Engineering to design and build MMEX Resources’ crude oil refinery in Texas - Hydrocarbons Technology
http://www.hydrocarbons-technology.com/news/newskp-engineering-to-design-and-build-mmex-resources-crude-oil-refinery-in-texas-5775872
MMEX
does anyone know what the valuation will take into account? does it include he value of anticipated revenues once up and running? any opinions would be appreciated. thanks in advance!
mmex
One of the first US refineries to be built in 40 years planned for Permian Basin
http://www.hydrocarbonprocessing.com/news/2017/03/one-of-the-first-us-refineries-to-be-built-in-40-years-planned-for-permian-basin
One of the first US refineries to be built in 40 years planned for Permian Basin
3/8/2017
AUSTIN, Texas -- MMEX Resources Corp., a global energy company focusing on the acquisition, development and financing of oil, gas, refining and infrastructure projects in Texas and South America, announced that it plans to build a $450 million, 50,000-bpd capacity crude oil refinery in the West Texas Permian Basin, subject to the receipt of required governmental permits and completion of required debt and equity financing.
Photo Courtesy of Reuters.
Located 20 mi northeast of Fort Stockton, Texas, near the Sulfur Junction spur of the Texas Pacifico Railroad, the 250-acre facility intends to utilize its connection to existing railways to export diesel, gasoline and jet fuels; liquefied petroleum gas; and crude oil to western Mexico and South America. Once completed, the Pecos County refinery will be one of the first oil refineries built in the United States in more than 40 years.
“The Permian Basin is the largest continuous oil discovery in America and has experienced exponential gains in daily production volume recently,” said Jack W. Hanks, President & CEO of MMEX Resources Corp. “The existing facilities and pipeline networks are largely unequipped to handle this growth and are limiting where products can be transported. By building a state-of-the-art refinery along the region’s existing railway infrastructure, we hope to bring a local and export market for crude oil and refined products which will add substantial job and economic growth to West Texas.”
MMEX plans to surround the Pecos County refinery with an additional 250 acres of buffer property and leverage state-of-the-art emissions technologies to yield minimal environmental impact. It also expects to feature closed-in water and air-cooling systems, which will require very little local water resources. Construction is slated to begin in early 2018, following the permitting process, and the facility is projected to begin operations in 2019.
The company anticipates the 18-month construction process will create approximately 400 jobs in the area during peak construction, as well as foster a significant number of indirect jobs and revenue for companies in catering, workforce housing, construction, equipment and other industries. Once operational, the facility is expected to provide an estimated 100 permanent jobs and generate substantial tax revenue for Pecos County.
MMEX
Where would that new income have come from? Thanks in advance!
MMEX
WOW PLEASE STICKIE THIS POST
AMAZING DD
THANK YOU!
MMEX
That's really exciting harby. I hope you are right!
In your opinion, how confident are you that this can reach $1+ ?
DTII
Good morning! Yes! Let's see this happen :)
What pps do you think is possible here? All in your opinion of course.
AEPP
Hey Steven, I forget, did SGBY ever have OTCQB status? Also, if so, how and when can we get it back?
SGBY
CNN MONEY: Booming again: U.S. poised for record oil output in 2018
http://money.cnn.com/2017/03/08/investing/record-us-oil-production-eia/
Booming again: U.S. poised for record oil output in 2018
By Matt Egan March 8, 2017: 1:26 PM ET
The American oil industry may be on the cusp of an incredible revival.
Following a painful war with OPEC, U.S. oil output is poised to rebound this year, thanks to healthier prices and a strengthened business model.
That could set the stage for America to set a record-breaking 2018, taking out the all-time oil production high set in 1970, according to new forecasts published this week by the U.S. Energy Information Administration.
The U.S. oil comeback is being led by the Permian Basin, a hotbed of shale drilling in Texas and New Mexico. The Permian is so rich in shale oil that frackers can profitably drill even in today's modest prices in the low $50-a-barrel range.
"Shale has proven to be remarkably resilient. The key is that any dollar invested today is double as efficient as it was two years ago," said Tamar Essner, energy director of Nasdaq Advisory Services.
The optimism stands in stark contrast with the fears that rippled through the U.S. oil industry in late 2014. Back then, OPEC decided to keep pumping all-out despite the supply glut created in part by the U.S. oil boom that sent oil prices spiraling lower.
OPEC's strategy appeared aimed at drowning American frackers by dropping prices far too low for them to survive on. Many worried about a steep decline in U.S. output.
Related: Here comes the next wave of the U.S. oil boom
OPEC's price war did spark a wave of bankruptcies, painful job cuts and a dip in U.S. oil production as crude plummeted to as low as $26 a barrel. Domestic output peaked at an impressive 9.6 million barrels per day in April 2015.
But the oil boom didn't collapse completely. U.S. oil output fell only a little, bottoming out at 8.7 million barrels in July 2016 and has since stabilized. Drilling has gathered steam in recent months as oil prices rebounded after OPEC abandoned its previous strategy by agreeing to cut production along with non-OPEC nations like Russia.
Now, the EIA has significantly ramped up its U.S. forecasts, predicting daily domestic output of 9.2 million barrels for this year and then 9.7 million barrels in 2018.
That's up dramatically from a previous estimate in November for 2018 production to rise to 8.9 million barrels.
So why the change?
All eyes are on the frenzy of shale activity in the Permian region. Frackers have scrambled to add rigs in the Permian. The rig count has nearly tripled from a low of 132 last April to 308 now.
"We believe shale production is set to reestablish itself for growth" that could be "fairly dramatic," said Anthony Starkey, energy analysis manager at Bentek Energy, a division of Platts.
All of this oil flowing out of Texas and other shale regions could throw a wrench in OPEC's plans to bring the oversupplied oil markets into balance and the cartel's ability to negotiate more production cuts later this year.
The EIA also cited changes to its forecasting model that better account for how U.S. rigs have become vastly more efficient.
Those efficiency gains have been critical. Lower prices, better technology and improved balance sheets have allowed U.S. shale companies to do more with less.
"Thanks to these advancements, we can still grow, even in this lower-price environment," said Essner.
She cautioned that while the "amazing" improvements in technology and operations are sustainable, U.S. production could be limited if servicing and labor costs rise too quickly.
Related: Exxon plays catch-up after missing U.S. shale boom
There's good news for American drivers -- the EIA doesn't think oil prices will rise much above the current level of $53 a barrel. The agency predicted an average price of just $53.49 a barrel this year and $56.18 next year.
"Nobody expects prices to revisit a triple-digit handle," said Essner.
The oil industry could also get a boost from President Trump, who has promised to take a friendlier stance towards fossil fuels than former President Obama.
While the EIA didn't specifically mention Trump's energy policy in its forecast, Trump has promised to unleash the American oil boom. The president has already taken some action by moving to cut EPA regulations and advance the stalled Keystone XL and Dakota Access Pipelines.
March 08
NEW YORK
MMEX
CNBC: Now is the time to invest along the Permian Basin in Texas, oil analyst says
http://www.cnbc.com/2017/03/31/now-is-the-time-to-invest-along-the-permian-basin-in-texas-oil-analyst-says.html
The saying goes, everything's bigger in Texas — and this includes opportunities to invest in oil, according to one expert analyst.
Some of the best oil companies to consider investing in are based along the Permian Basin of West Texas, the largest U.S. oil patch, Seaport Global Securities Managing Director Mike Kelly told CNBC on Friday.
"It's simple economics. ... You are spending the least amount of capital [along the Permian], but here you get the most reserves on the ground," Kelly said on "Power Lunch." "Lower cost wins."
Along the Permian alone, the oil and gas industry poured more than $28 billion into land acquisitions in 2016, more than triple what was spent in 2015. These deals are setting the stage for much larger investments that will be needed to extract oil from the ground in coming quarters, many experts agree.
In a Thursday note to clients, Seaport wrote that: "Our oil macro review produced a surprisingly robust outlook. ... We think uninspiring [full-year 2017] guidance given on [fourth-quarter] conference calls is a case of massive industry wide sandbagging, which sets up a year of beat opportunities."
While the near-term environment for many oil names is strong, Kelly has warned investors that he remains relatively cautious with his long-term crude outlook, and says gas is looking "decisively worse."
Yet Kelly told CNBC on Friday he thinks the wild swing of crude prices lately has actually been "encouraging" for the industry and for many of the companies he follows. "In a $50 world, a lot of these guys make a good living. ... You don't need more than $50 for these things to work."
Oil prices fell Friday, ending a three-day rally and leading into what could be the oil market's worst quarter since 2015. Investors are worried that growing U.S. supplies are undermining OPEC-led production cuts. Oil settled the day at $50.60 per barrel, falling 5.8 percent.
For investors looking to put money into the space, Seaport's Kelly said he would recommend three Texas-based oil stocks: RSP Permian, Ring Energy and Callon Petroleum. Ring is a smaller company but one of the fastest growing small-cap stocks in the sector, Kelly said. And Houston-based Callon is one of the fastest growers overall along the Permian Basin, he added.
"We're back to backing the Permian wholeheartedly," Seaport wrote in its Thursday note to investors.
— Reuters contributed to this report.
MMEX
That was one of the best puns I've ever read. Very clever. Think we can reach a dollar or two here?
MMEX
Stocker you really believe we can reach $1 plus?
DTII
MMEX article in Mexican newspaper
http://m.elfinanciero.com.mx/empresas/refineria-en-texas-exportaria-gasolina-a-mexico.html