Michael Filloon
Oil & gas, energy, hedge fund manager, commodities

Bakken Update: Q3 Miss Is A Buying Opportunity As Pad Completions Will Be Realized In Q4

The recent pullback of Rex Energy (NASDAQ:REXX) are overdone after it reported a Q3 miss. Appalachian differentials were a little crazy, but expectations are Marcellus/Devonian economics will improve over the next two quarters. Rex hit production estimates, and has several catalysts in Q4. Rex, like many of the stocks I like, has excellent acreage. Location of acreage is very important as it can drastically change IRRs. The table below provides IRR data for a number of US plays. Keep in mind, the Marcellus and Utica numbers do not figure ethane rejection.

Internal Rates Of Return In US Plays Play/Interval IRR Marcellus Super Rich 74% Utica Liquids Rich 73% Niobrara-Wattenberg 66% Eagle Ford Liquids Rich 66% Mississippian Horizontal East ...
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