Nuverra Environmental Solutions Inc (NES), Oasis Petroleum Inc. (OAS), Magnum Hunter Resources Corp (MHR): The Weather Continues to Plague This Industry

Page 1 of 2
anImage

Photo credit: Flickr/photofarmer

It’s been a rough year for oil and gas producers due to the cold and wet weather that has lingered longer than anticipated. It was actually the second-straight quarter that Nuverra Environmental Solutions Inc (NYSE:NES) pointed to the weather affecting its results. After losing the equivalent of 15% of its working days in the Bakken during the first quarter, it endured “extraordinarily cold and wet conditions” in the Bakken this past quarter which held the company back once again. It wasn’t alone in its struggle with the weather.

What was interesting is that wells were being drilled, but simply were not able to be completed. That’s one reason why the Bakken production of Oasis Petroleum Inc. (NYSE:OAS) was relatively flat last quarter as the company had 37 wells that were drilled but not complete. Looking ahead, the company believes that it will complete 40-45 wells next quarter alone after only completing 51 wells in the first half of the year due to the weather. These wells coming on line will provide a nice production boost.

I will point out that part of this is due to lumpiness as companies moved to multi-well pad drilling. However, as Nuverra Environmental Solutions Inc (NYSE:NES) CEO Mark Johnsrud notes, the weather is still having an impact on getting wells completed. On the latest conference call, he said that his company has seen that change in efficiencies with the multi-well pad:

As we were coming in to the spring, companies moved their equipment onto a multi-well pad and they were able to not have to move it. They could leave it on the same pad and drill two, three, four wells at one time, without having to move down the gravel muddy roads for fracking. There was places that had to shut down because the roads became impassable because of the wet conditions.

Magnum Hunter Resources Corp (NYSE:MHR)The move to multi-pad drilling when combined with weather issues is why, according to the North Dakota Department of Mineral Resources, there are nearly 500 wells still waiting to be fracked.

Weather hasn’t just been an issue in the Bakken. According to Magnum Hunter Resources Corp (NYSE:MHR) CEO Gary Evans, one of the reasons why its newest Utica well isn’t fracked is due to the weather. On the company’s recent conference call he said:

We’ve been pounded with rain in Ohio, I mean, for the last 2 months. And so when the roads are wet, you can’t get equipment in because you’ve built a pad on top of a mountain. You’ve got to use bulldozers to pull the trucks up. It’s just — that adds to your costs, and so we delay things because we have to. And then if Halliburton Company (NYSE:HAL) is frac-ing a well that’s 10 miles down the road and it’s raining over there, too, they can’t get done with the frac because they can’t get their equipment in, so [it] delays us frac-ing. So the weather has a huge impact on our business, and it’s unfortunate that this part of the country where we’re operating in has had some adverse weather really all year.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!