Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
Aricool,
I am unsure if I am remembering this correctly, but didn't Valero say they could ship crude to the east coast for $2/bbl? I could be way off but thought it was said at the quarterly earnings.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Aricool,
Could be why JP Morgan has an 11.1% passive stake in the company. Could be some growth even if we don't see differentials widen again like I assume they will.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
shawnaraghi,
I like the entire sector. A sell off was needed but it is really overdone now. As for NTI and CVRR, there is an interesting dynamic. CVRR has access to Cushing. NTI is a play on both Bakken and WCS. Bakken differentials to WTI have really tightened up and so has WCS/WTI differentials. Right now NTI is not benefitting from the wide differentials it has enjoyed, and although I think those will widen again as the year goes forward, NTI may underperform. This is an assumption and I could be wrong, but from what I have heard on differentials Bakken crude has gotten a little more expensive.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
One thing to keep in mind with TPLM is higher costs in the winter. I think these costs pull considerably in the late 2nd quarter and will probably be realized in the 3rd. If I am correct the smaller Bakken players will beat EPS estimates at the latter half of 2013 and if the price of oil stays high, the top line should also be better.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
Aricool,
It is possible we could see this happen, but it would take a combination of variables. Europe's economy would have to continue to lag, and China slow from its current pace. Even if this does occur WTI will always sell at a discount to Brent. If we start exporting crude this would change, but I think the US benefits too much from the ability to sell it refined products abroad. One thing is certain, and that is going forward the price of crude will probably bounce all over the place, and at the very least keep things interesting.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
Aricool,
From what I understand of the first quarter, WCS differentials tightened significantly while WTI/Brent did the same. Many of the refiners would lose money running the cokers so they decided to stick with light/sweet crudes.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
Aricool, I bought ARII as more of a trade than a long term investment. Bought in on the dip after earnings because the stock got beat up a little worse than I had originally expected it would. Plus, I believe the miss had more to do with its leasing cars. Analysts had expected ARII to sell more and lease less which would provide less near term revenue, but provides nice cash flow going forward.
I have used options in the past, and still do from time to time, but right now it is difficult to know what the broader market is going to in the short term, so I would prefer to limit my exposure to that risk. It seems the market is headed higher, but I feel more comfortable with sitting on the stock for right now. I will say that I am not comfortable with some of the more exotic option trades, so I prefer to only use them when I have a good feel of the broader market, and feel comfortable with the near term direction of the stock.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Aricool,
Anything is possible, and there is a chance we see the ramp in crude production pushing down domestic oil prices. I am sure you know this, but the crude has different economics than natural gas because of transportation. I know we do not currently export oil so it is a different dynamic, but Brent pricing does dominate the world oil market and will continue to. I don't believe we will produce enough shale oil in the US to put the downward pressure we saw with natural gas, but US oil production has progressed much better than I expected so I haven't been right so far. I think the Bakken producers have had difficulty this year based on valuation as they have been real expensive. Now the Eagle Ford has produced better than the Bakken, but this varies like the Bakken as one area is very good while others are not even close. As for the Eagle Ford pushing Bakken crude from the market, I think both have target markets that are quite different. Bakken crude will work its way to California, and also to the Northeast. Eagle Ford crude will start making it to the Northeast as well, but not by the rails, but by ship. There is no way to know for sure, but Eagle Ford economics are better so cap ex should be higher than the Bakken and will continue to push production growth which I believe will be higher.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
AR,
I couldnt agree more with what you are saying. Funny you made the comments because I was planning those specific statements to be a part of my next article. TPLM's ND acreage is really all over the place and this will make it very tough to keep costs down. Rockpile looks way better on the balance sheet as a spin off, and it seems to be important in having TPLM to do all the work for. This way it can keep busy and bid outside jobs in process. This adds a lot of value to Rockpile as a company, when other pressure pumping companies are real worried about the future (especially those that don't always do a good job). The spin off would look real good on the balance sheet as well, which would provide some very nice upside to TPLM's stock price if this is a plan for the future. I would have liked to see TPLM talk a little more about the future of Rockpile as they seemed to be falling over themselves trying to figure out how it will affect the bottom line going forward. Thanks for the well thought out comments.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
solojif,
TPLM is probably not a buy and hold type of stock. Its nice to turn a quick profit buying on dips. Right now both TPLM and KOG could have reported even worse numbers, they are both too cheap to have any considerable downside from here. I could be wrong, but these types of sell offs have paid off in just a few months. Hopefully it holds true here as well.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
jebgeo,
Sorry I didnt get back to you sooner, was pushing out an article on PBF last night and it got late. I will be writing something up on KOG this weekend, but I am dissappointed with the EPS. KOG had done a better job on the bottom line recently and I had them missing but not this bad.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
rlp,
Sorry I didnt get back to you sooner. I will check out the numbers and maybe put together something on their depletion. Its a good point as to the current production and how many wells that have been drilled. I do know their wells have produced very well in comparison to other operators in that area in the short term, but I have not modelled out anything with respect to longer term production. I will get back to you soon.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
roes,
I have to look at it closer but it sounds like there were an additional $10 in RIN costs for the quarter than anticipated. The $10 million equates to about $2.36/share. Sounds like the costs will be passed on to the consumer so I am not real concerned about this miss. I added to the position this morning when the stock was down 7%, wish I would have jumped in a little sooner when it was down 11%.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
GOOBIE,
That's correct. The idea is to bypass the issues at Cushing and rail the oil to the east and west. The question is how much, or at least that is what the analysts are trying to figure out. Depending on where you look there are all sorts of estimates on the cost to rail oil to the northeast and southwest. For arguments sake, Bakken crude railed to New Jersey is currently costing about $16/bbl to transport. Keep in mind this number is high and it will probably get cheaper with time. So whatever the transportation cost is minus the price of Brent would be a good starting point for pricing. When I spoke to the CEO at MRO, he put it pretty plainly and said the US crudes would always sell at a discount to WTI. He said that Bakken crude would probably sell for $6 less per barrel than WTI in a best case scenario because it costs roughly that much to pipe it to Cushing. As we find new ways to send the crude we will see differentials tighten.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
I am unsure if I am remembering this correctly, but didn't Valero say they could ship crude to the east coast for $2/bbl? I could be way off but thought it was said at the quarterly earnings.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
I don't believe your trade is exotic, I was just speaking of exotic options in general.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Could be why JP Morgan has an 11.1% passive stake in the company. Could be some growth even if we don't see differentials widen again like I assume they will.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
I like the entire sector. A sell off was needed but it is really overdone now. As for NTI and CVRR, there is an interesting dynamic. CVRR has access to Cushing. NTI is a play on both Bakken and WCS. Bakken differentials to WTI have really tightened up and so has WCS/WTI differentials. Right now NTI is not benefitting from the wide differentials it has enjoyed, and although I think those will widen again as the year goes forward, NTI may underperform. This is an assumption and I could be wrong, but from what I have heard on differentials Bakken crude has gotten a little more expensive.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
It is possible we could see this happen, but it would take a combination of variables. Europe's economy would have to continue to lag, and China slow from its current pace. Even if this does occur WTI will always sell at a discount to Brent. If we start exporting crude this would change, but I think the US benefits too much from the ability to sell it refined products abroad. One thing is certain, and that is going forward the price of crude will probably bounce all over the place, and at the very least keep things interesting.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
From what I understand of the first quarter, WCS differentials tightened significantly while WTI/Brent did the same. Many of the refiners would lose money running the cokers so they decided to stick with light/sweet crudes.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
I bought ARII as more of a trade than a long term investment. Bought in on the dip after earnings because the stock got beat up a little worse than I had originally expected it would. Plus, I believe the miss had more to do with its leasing cars. Analysts had expected ARII to sell more and lease less which would provide less near term revenue, but provides nice cash flow going forward.
I have used options in the past, and still do from time to time, but right now it is difficult to know what the broader market is going to in the short term, so I would prefer to limit my exposure to that risk. It seems the market is headed higher, but I feel more comfortable with sitting on the stock for right now. I will say that I am not comfortable with some of the more exotic option trades, so I prefer to only use them when I have a good feel of the broader market, and feel comfortable with the near term direction of the stock.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Anything is possible, and there is a chance we see the ramp in crude production pushing down domestic oil prices. I am sure you know this, but the crude has different economics than natural gas because of transportation. I know we do not currently export oil so it is a different dynamic, but Brent pricing does dominate the world oil market and will continue to. I don't believe we will produce enough shale oil in the US to put the downward pressure we saw with natural gas, but US oil production has progressed much better than I expected so I haven't been right so far.
I think the Bakken producers have had difficulty this year based on valuation as they have been real expensive. Now the Eagle Ford has produced better than the Bakken, but this varies like the Bakken as one area is very good while others are not even close. As for the Eagle Ford pushing Bakken crude from the market, I think both have target markets that are quite different. Bakken crude will work its way to California, and also to the Northeast. Eagle Ford crude will start making it to the Northeast as well, but not by the rails, but by ship. There is no way to know for sure, but Eagle Ford economics are better so cap ex should be higher than the Bakken and will continue to push production growth which I believe will be higher.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
I couldnt agree more with what you are saying. Funny you made the comments because I was planning those specific statements to be a part of my next article. TPLM's ND acreage is really all over the place and this will make it very tough to keep costs down. Rockpile looks way better on the balance sheet as a spin off, and it seems to be important in having TPLM to do all the work for. This way it can keep busy and bid outside jobs in process. This adds a lot of value to Rockpile as a company, when other pressure pumping companies are real worried about the future (especially those that don't always do a good job). The spin off would look real good on the balance sheet as well, which would provide some very nice upside to TPLM's stock price if this is a plan for the future. I would have liked to see TPLM talk a little more about the future of Rockpile as they seemed to be falling over themselves trying to figure out how it will affect the bottom line going forward. Thanks for the well thought out comments.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
TPLM is probably not a buy and hold type of stock. Its nice to turn a quick profit buying on dips. Right now both TPLM and KOG could have reported even worse numbers, they are both too cheap to have any considerable downside from here. I could be wrong, but these types of sell offs have paid off in just a few months. Hopefully it holds true here as well.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Sorry I didnt get back to you sooner, was pushing out an article on PBF last night and it got late. I will be writing something up on KOG this weekend, but I am dissappointed with the EPS. KOG had done a better job on the bottom line recently and I had them missing but not this bad.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Sorry I didnt get back to you sooner. I will check out the numbers and maybe put together something on their depletion. Its a good point as to the current production and how many wells that have been drilled. I do know their wells have produced very well in comparison to other operators in that area in the short term, but I have not modelled out anything with respect to longer term production. I will get back to you soon.
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
I have to look at it closer but it sounds like there were an additional $10 in RIN costs for the quarter than anticipated. The $10 million equates to about $2.36/share. Sounds like the costs will be passed on to the consumer so I am not real concerned about this miss. I added to the position this morning when the stock was down 7%, wish I would have jumped in a little sooner when it was down 11%.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
That's correct. The idea is to bypass the issues at Cushing and rail the oil to the east and west. The question is how much, or at least that is what the analysts are trying to figure out. Depending on where you look there are all sorts of estimates on the cost to rail oil to the northeast and southwest. For arguments sake, Bakken crude railed to New Jersey is currently costing about $16/bbl to transport. Keep in mind this number is high and it will probably get cheaper with time. So whatever the transportation cost is minus the price of Brent would be a good starting point for pricing. When I spoke to the CEO at MRO, he put it pretty plainly and said the US crudes would always sell at a discount to WTI. He said that Bakken crude would probably sell for $6 less per barrel than WTI in a best case scenario because it costs roughly that much to pipe it to Cushing. As we find new ways to send the crude we will see differentials tighten.