Despite its seafaring moniker, Mariner also has a major onshore component, focused on the Permian Basin in west Texas. The company is now branching out to a new core area, as it picks up bankrupt Edge Petroleum's operations for $215 million, net of adjustments. More than 80% of the acquired reserves are in south Texas. The purchase also brings in some complementary Permian acreage on the New Mexico side.
If you've come on board Mariner for the prospective offshore bounty, don't be too put off by this move. Think of the onshore business as the lowest-risk leg of Mariner's stool, providing support for its deep-sea adventures. The shelf and deepwater Gulf projects are going to provide more flash, but onshore development will require less cash.
Speaking of requiring cash ...
The last time we looked at Brigham Exploration & Production
Yesterday, Brigham announced that an operated Bakken well flowed at a rate of nearly 3,400 barrels of oil equivalent per day "during an early 24 hour flow back period." Note that does not say the first 24 hours. Brigham could have cherry-picked any period it wanted. This is one reason Fools prefer 30-day rates.
Despite adding more and more fracture stages to its Bakken wells, Brigham has seen its drilling and completion costs come down by more than a third with the industry downturn. What do you think is going to happen as oilfield activity picks up again in 2010? Schlumberger
While I believe Bakken well economics will continue to work in a $50-plus oil environment (Newfield Exploration is more helpful than Brigham on oil price sensitivities), rising costs should factor into your valuation for any outfit doing big, multistage fracs. That's even more critical with regard to shale gas players, who largely face less robust rates of return than oil-directed E&Ps today.
Shale gas? Thought you'd never ask
Over the past year or two, we've seen countless international companies either buy or partner their way into North American shale plays. This week, Japanese trading house Sumitomo got in the act, entering into a joint venture with Carrizo Oil & Gas
I wouldn't be surprised to see Carrizo bulk up this part of the budget (currently just $32.5 million net to the company) if early well results are strong, and private equity partner Avista Capital is game. Carrizo actually offers some of the highest leverage to the broader Marcellus play on an acreage-per-share basis, if you're seeking something smaller than one of my energy favorites, Range Resources.