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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!