View Michael Filloon's Articles BY TICKER:
AAPL, AMZG, AREX, ARII, ATHL, AXAS, BAS, BCEI, BOBE, BOLT, C, CHK, CLNE, CLR, CMP, CNH, CNTY, CPE, CPX, CRR, CRZO, CSIQ, CVI, CWEI, DE, DK, DNN, DNR, EOG, EOX, ES-OLD, ESL, ESTE, FANG, FLR, FOR, FRO, FTK, FTO, GBX, GDP, GEGSQ, GEOI, GEOS, GMXRQ, GNA, GPOR, HAL, HAWKQ, HES, HFC, HK, HP, ICO, IO, KEEKF, KOG, LAYN, LEU, LPI, LUFK, LXU, MA, MDR, MHR, MON, MRO, MTDR, NAT, NFX, NOG, NOV, NR, OAS, OIS, OXY, PAL, PBF, PDCE, PDS, PE, PES, PQ, PVA, PZE, QEP, RAVN, REE, REN, REXX, ROSE, RRC, SD, SFY, SJT, SLCA, SLW, SM, SN, SSCC, SSN, STO, SWC, SWN, SYRG, TGI, TPLM, TSO, UEC, UGA, URZ, USEG, USO, VLO, WFC, WLL, WRES, XOM, YZC
Bakken Update: U.S. Crude Storage Capacity Is Filling Up, So Oil May Be Headed Below $40/Bbl
- The recent rise in the price of WTI may be short-lived, as U.S. production continues to increase the country's oil inventories.
- The oil markets are still in contango, and until the market returns to backwardation, we will continue to see downward pressure on oil prices.
- A large percentage of production decreases have come from mechanical rigs, which produce a much lower production per rig than AC-driven units.
- Core areas' breakeven prices are below $40/bbl. These areas will continue to produce well, especially as operators work through their hedges in the first half of the year.
Bakken Update: Bakken Operators May Get $1 Billion Tax Break
- A North Dakota tax trigger implemented in 1987 may save Bakken operators $1B in 2015 production taxes.
- If the tax break is triggered, North Dakota's production tax rate falls from 11.5% to 5% for 5 months regardless of the price of oil.
- Back in April, the North Dakota legislature voted down a flat tax that would have replaced the current triggers.
Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement
- We are starting to see rig cancellation and movement in the Bakken in response to the fall in oil prices.
- We believe rigs will move closer to the Nesson Anticline, as this area may be the only viable area at today's realized oil prices.
- Operators plan to cut costs by focusing on pad development, as this decreases drilling and completion costs.
Bakken Update: Oil Prices In 2015
- Operators continue to decrease 2015 cap ex, but still are increasing production year over year.
- Oil prices may continue to head lower as operators continue to increase production.
- Rigs will be moved to better producing areas, improving production at roughly the same well costs.
Bakken Update: Continental Resources' Well Results Around 2 Major Well Pads Not Currently Economic
- Burke County well results have been very poor outside of the Nesson Anticline, with most areas not economic at $100/bbl WTI and 18 month payback.
- Two of CLR's largest well pads were located on Burke's Nesson Anticline. Excluding a couple of monster wells, these locations require much higher oil prices.
- Economics improve significantly the further south locations are down the Nesson Anticline. Well pressures are much lower in Burke.
- We continue to believe rigs will move out of Burke, Divide, Billings and Stark counties.
- Better locations can be found in SE Williams, NE McKenzie, SW Mountrial and NW Dunn counties.
Bakken Update: American Eagle's Well Results Spell Significant Issues If Oil Prices Don't Rebound Soon
- Divide County wells are lower pressured, providing poor initial production rates.
- AMZG has issues as all of its acreage is in Divide County, it does not have better acreage to focus on until oil prices improve.
- At $75/bbl. NYMEX, Divide County wells pay back in five years, much longer than deemed acceptable by operators.
- North Divide is lacking infrastructure and has high LOEs.
Bakken Update: Poor SW Williams County Results Have Caused Oasis To Move Rigs
- Southwest Williams County may not be economic at today's oil price, adversely affecting the operators.
- The lower oil price caused Oasis to cut 2015 Capex and move rigs to Indian Hills Field.
- Oasis wells have underperformed both EOG and STO in SW Williams.
- Oasis may have more exposure to reserve writedowns given its acreage position.
Bakken Update: EOG Antelope Well Has One-Year Payback At $50/Bbl WTI
- EOG continues to be the top US shale operator in the United States.
- In its core acreage, EOG wells still provide excellent returns at today's realized oil prices.
- Improvements of well design have been significant even in timeframes as short as one year.
Bakken Update: The Majority Of Oasis' Acreage Isn't Economic At Today's Oil Price
- OPEC's failure to cut production could push Bakken light realized prices below economic levels in the majority of Oasis acreage.
- The influx of oil may widen the Bakken/WTI differentials, decreasing realized prices further.
- We expect Oasis may cut 2015 cap-ex and move rigs to its core acreage.
Bakken Update: Halcon May Struggle To Find Economic Wells In 2015
- El Halcon and its western ND acreage well economics are in question at today's realized oil prices.
- Its recent cap ex cut may just be the beginning as decreases development outside the Bakken core.
- Poor results in the TMS have put the play on hold in 2015.
Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator
- Lower WTI prices and widening Bakken light differentials provide for difficult economics for NOG in 2015.
- Lack of operational control may lead to more downside than other small cap Bakken operators.
- Bakken capex reductions may continue to affect 2015.
Bakken Update: Emerald Payback Times Point To A Long Winter In The Bakken
- Lower realized oil prices are further compounded in the Bakken, given the $10 to $11 differential to WTI.
- Margins continue to get squeezed in western McKenzie County, where well costs are high and fewer locations are seen/section.
- At Emerald's core acreage, it is not able to move rigs to higher IRR areas.
- Emerald may be forced to lower capex and slow development until price improvement is seen.
Bakken Update: Greenbrier's Pullback Has Provided A Buying Opportunity
- Greenbrier's stock price has pulled back 31% from its 52-week high.
- 8% of all US crude production is transported by rail.
- There is significant upside to tank car retrofits and phase outs.
- Railroads and tank car manufacturers may be somewhat insulated to a temporary pullback of oil prices.
- The rails have been a better fit to transport crude as set-up times and costs are lower than pipelines.
Bakken Update: Analysts Have This Recent Permian IPO Growing 88% In 2015
- Parsley starts off with an excellent Q2, beating EPS by 56% and Revenues by over 6%.
- Parsley's core northern Upton acreage is one of the better areas in the Midland Basin.
- Its Reagan County acquisition has very thick Wolfcamp intervals providing possible upside to the number of wells/section.
- The Midland Basin has 3000 to 4000 feet from 12 prospective intervals, which may be the best horizontal play in the U.S.
- Parsley May Grow Faster Than All Of The Pure Play Midland Basin Small Caps.
Bakken Update: Diamondback Has 28% Upside
- FANG still has significant downspacing to perform with 11 possible intervals to target horizontally.
- Production is growing fast, bolstered by acquisitions and improved well design.
- Its acreage is well-suited to pad production, as this area could have some of the tightest spacing in the country.
- The recent pullback in realized oil prices could be an issue, as expectations are for an inventory build at Cushing.
- FANG continues to be a top operator in the Midland Basin with very good production rates.
Bakken Update: Basic Energy Continues To Excel, Levered To Fraccing
- Basic is levered to the Permian Basin, which may be the top play going forward.
- We believe oil service names levered to completions work will see the largest demand going forward.
- Basic is an attractive take over target, as it would be a quick and easy way to add hydraulic horsepower.
Bakken Update: Carrizo Continues To Outpace In The Eagle Ford And Ready To Sell In The Niobrara
- Carrizo outperforms in the Eagle Ford with downspacing upside.
- Its Utica acreage has the most upside and seems to be in the sweet spot.
- It's ready to sell both the Niobrara and Marcellus, redirecting those dollars to other plays.
Bakken Update: Matador's New Frac Design Heads To The Permian
- Matador's secondary offering may have been a positive, as it has enough cash to operate through 2014.
- Management continues to make good decisions, adding acreage in the Permian.
- The completion of its equity offering funds Matador's 2014 D&C program.
- Matador continues to beat production estimates, and may be at the top end of its 2014 EBITDA guidance.
Bakken Update: Permian Pure Play Athlon Has Howard County Upside
- ATHL's largest leasehold is in Howard County, which may have the most Midland Basin upside.
- ATHL is a proven vertically focused driller and this has translated to top notch horizontal results.
- ATHL's acquisition of +23000 net acres in the Midland Basin for $873 MM was well received.
Bakken Update: Merger Creates Bakken And Eagle Ford-Focused Small Cap
- The Earthstone/Oak Valley strategic combination adds value through proven operated management.
- Oak Valley adds operated Eagle Ford acreage to Earthstone's Bakken footprint.
- The added Oak Valley liquidity can be used to start a Bakken operated program.
Bakken Update: Bonanza Creek Is Up Over 20%, More Potential Ahead
- Doubles Acreage At A Very Good Price.
- Substantial Increase Of Inventory.
- Downspacing Results Are Very Positive.
- Production rate improvement.
- Credit Suisse raises price target raised to $66/share.
BakkenUpdate: Rex Energy Blows By Q1 Analyst Estimates On Its Way To $30/Share
- Beats Q1 EPS Estimates By 57%.
- Benefits From Strong Propane Prices From Bitterly Cold Winter.
- If Bluestone II Plant Startup Is On Time, We Believe REXX May Up Its Production Guidance.
Bakken Update: Triangle Petroleum May Have 43% Upside In 2014
- Northland Capital's $14 price target provides 43% upside for Triangle over the next year.
- Triangle continues to improve IP rates in the Bakken through better well design.
- Rockpile responds to good third party growth rates with an additional frac spread and the start of a wireline business.
- Once online, Caliber's natural gas processing facility could drive midstream revenues.
Bakken Update: Recent Kodiak Completions Model 1000+ MBoe
- In Dunn County and Polar prospect, recent Kodiak wells model EURs of 1000 MBoe.
- Kodiak continues to increase CapEx in Polar prospect, as it may be one of the best areas for pad drilling in the Bakken.
- In better areas, Kodiak wells have a 12-month payback.
Bakken Update: Emerald Oil Continues To Focus On Production, But Costs Are A Killer
- Big bottom line miss is attributed to difficult weather conditions, and the inability to start putting infrastructure in place.
- Slickwater fracs continue to impress, as Emerald continues to increase recoveries per well.
- Emerald maintains its 2014 cap ex and production guidance.
- Costs could be a concern in 2014. Keep a close watch on liquidity.
Bakken Update: Small Cap Bakken Operator Is Up 30% Since My Call, Has 30% To Go
- Stock is up 30% since my call in August of 2013.
- Global Hunter Securities has upgraded Abraxas to a $4.50 price target. A 30% increase from today's price.
- It has cleaned up its balance sheet, decreasing debt and adding operated acreage.
- Abraxas continues to have great well results in the Eagle Ford and Bakken. Better than other operators in the area.
Bakken Update: 2014 Oil And Gas Stock Pick Is Up 21% Since The First Of The Year
- Wattenberg could be the play of 2014. 32 well per section spacing, low well costs, and improving well results are bullish these names.
- Extended reach laterals are performing much better than expected. By doubling lateral lengths, operators are improving production results by 300%.
- Current differentials are historically high at approximately $17/Bbl. By year end, expectations are a return to historical averages of $8/Bbl.
- High line pressures have eased some with the O'Connor plant. Additional capacity will be added this month.
- Two upcoming tests in the North Park Basin could prove bullish.
- Bakken Update: Frac Sand Pricing Could Go Parabolic In Q3 2014
- The Bakken Update: U.S. Oil Production Is The Reason For The Tank Railcar Renaissance
- Matador's Recent Streak Should Continue
- The Bakken Update's 2014 Stock Picks: Small Operator's Well Design Outperforms In North Dakota
- Bakken Update's 2014 Stock Picks: Fraccing Fluid Producers