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There is a new guy on the block: Penn Virginia rebrands to Ranger Oil10/11/2021
Following the close of the Lonestar acquisition, Penn Virginia Corp. plans to rename the combined company to Ranger Oil Corp., shifting its energy development in Texas towards safer and more efficient oil and gas operations.
This Texas oil & gas giant emerged as an Appalachian coal company in the late 1800s. Over time, the company evolved into a gas and oil manufacturer with assets largely in shale basins. And after the acquisition of Lonestar and Rocky Creek Resources within the past year, they decided to concentrate on Eagle Ford shale, reinventing itself and its values under the new name — Ranger Oil.
The company's consolidated assets now amount to over 140,000 net acres strategically positioned in the Eagle Ford play of south Texas.
It is expected that the company will continue with the two rig programs it operated before the signing of the $370 million merger agreement with Lonestar. Taking this rapid rate of development into account, CapEx is expected to be between $65 million and $75 million in the fourth quarter.
Along with Virginia's expansion through acquisitions, the management team also made a few changes, which positively impacted the company's operational and financial strength. Therefore, from early 2020 through the first half of 2021, Penn Virginia achieved the highest EBITDA margin per boe among all U.S. independent oil and gas companies.
This majorly happened because of the companies balance sheet extensive transformation: by bringing in significant equity capital from an experienced oil and gas equity group and issuing senior unsecured notes to extend maturities. Thus helping Virginia to create an estimated 1.5x LTM leverage.
It is anticipated that Ranger Oil Corp. will rebrand officially on Oct. 18, with the full rebranding to be complete by the year-end of 2021.
Concerning the strategy, the company will continue to leverage operational and capital efficiency to generate superior returns and continue its long-term free cash flow generation track record, which it has maintained every quarter since fourth-quarter 2019. At current strip prices, Ranger is projected to produce over $200 million in free cash flow in the next 12 months.
As Ranger, the company also plans to continue its disciplined approach to potential consolidation opportunities while maintaining an extremely liquid balance sheet, all the while pledging to achieve a leverage ratio of at least 1.0 times in the next four quarters.
In addition to these operational improvements, Ranger plans to grow its dominance by drilling longer laterals, creating more wells per pad, and utilizing enhanced completions techniques, hoping to grow in dominance and establish itself as an ESG leader in the industry.
Additionally, due to the merger closing, Lonestar's swapped hedge volumes will be assumed by the company, and most of them will be reset to reflect current market pricing. Although there may be no material impact on the Ranger's leverage metrics, the reset is expected to increase the company's free cash flow and adjusted EBITDAX going forward.
Starting Oct. 18, Ranger Oil will trade under the NASDAQ ticker ROCC.
A good asset will not sit on the market for long. After a deal with Berkshire Hathaway fell through, Dominion Energy managed to secure another one for Questar Pipelines in a drop of a hat. And get that, it is better than the former one by more than half a billion! Although not everyone is happy with such decisions, it seems that even Carl Icahn’s complaints won't be able to sway Southwest Gas Holdings’ decision. Though we will have our eyes peeled in any case… If everything goes as planned, a $2 billion deal will be closed before the end of the year.
The Hunting Season Is Not Over Yet: Exxon Mobil makes a $400 million commitment to Wyoming's carbon capture
Carbon footprint reduction is a new hot trend: Exxon Mobil makes a $400 million investment into its LaBarge facility to expand its carbon capture and storage capabilities by another million metric tons of CO2. Operational activities could begin as early as 2025 after a final investment decision is made in 2022. At present, about 20% of all CO2 captured worldwide each year is captured at the LaBarge. However, as one of the largest of the world's Big Oil companies, it is not the only project in Exxon's pipeline: aside from CCS capabilities, the LaBarge is one of the world's largest sources of helium, producing approximately 20% of global supply
Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.
The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.
No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.