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Michael Filloon

 
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  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    Aricool,

    There are several ways to look at this. They are well hedged, but I had them at 67% around $90. Remember, differentials wont figure into that number and we expect those to expand to $13 or $14/bbl. This could be much worse if producers continue to expand production and the oil will have no where to go. A bigger issue is how many operators will cancel wells altogether. The location of its acreage is the biggest concern as most of it isn't economic at today's oil price, so they may have difficulty finding takers for those wells as the year goes on. Most operators are only hedged 50% and will have to rethink there plans in some of these areas as well. So it isn't so much the hedges, but where their acreage is located. Then we have to consider write downs at the end of the year.
    Nov 30, 2014. 07:09 PM | Likes Like |Link to Comment
  • Bakken Update: Emerald Payback Times Point To A Long Winter In The Bakken [View article]
    Elaine,

    Not sure I have enough time figure out that many months. At the rate we are going, we could be figuring decades. Pretty bearish on oil prices from here. Looks like things are only going to get worse.
    Nov 30, 2014. 06:33 PM | 1 Like Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    Aricool,

    Not all but most operators are hedged at around $90 in 2015. 1H15 is approximately 50% and 2H15 around 30%. So it doesn't look real good for most of them.
    Nov 29, 2014. 02:50 AM | 2 Likes Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    Aricool,

    Yeah, hedges are pretty ugly in 2Q15. Im not so sure anyone will fair much better by then, but hopefully we see oil prices at a somewhat decent level at that time.
    Nov 28, 2014. 08:46 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    GHOST4REAL,

    Yes, royalties will be affected immediately. EOG shouldn't have too much trouble continuing to make money. They are profitable at a very low/bbl cost. $55 is the current number, but if they move rigs to focus on the best areas, this does get better. The biggest issue (and one I am not totally sure of, as I think royalty payments are different from one producer to the next and by play), but I don't believe derivatives are figured in royalty payments, so one would get royalties on the realized price of oil before hedges.
    Nov 28, 2014. 05:21 PM | 1 Like Like |Link to Comment
  • Bakken Update: Halcon May Struggle To Find Economic Wells In 2015 [View article]
    HK down 21% today. This move may not be over, so be careful going forward.
    Nov 28, 2014. 03:27 PM | Likes Like |Link to Comment
  • Bakken Update: Emerald Payback Times Point To A Long Winter In The Bakken [View article]
    EOX down 25% today. May not be the end of the move down, so be careful going forward.
    Nov 28, 2014. 03:22 PM | Likes Like |Link to Comment
  • Bakken Update: Halcon May Struggle To Find Economic Wells In 2015 [View article]
    FossilFuel,

    Thanks for that clarification, I appreciate it. The pressure depletion issue is interesting. I would guess this is much more apparent in the overpressured wells near Nesson than say west McKenzie County? Just wondering if the data you have seen proves this?
    Nov 28, 2014. 02:37 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    Down 20% today. May have further to go. Going to be a very tough environment for the small caps going forward.
    Nov 28, 2014. 01:00 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    longplayer,

    Im not contesting what you are saying, but keep in mind the environment we are currently in. The sector is getting killed right now, so there aren't a lot of viable options.
    Nov 28, 2014. 12:57 PM | Likes Like |Link to Comment
  • Bakken Update: Emerald Payback Times Point To A Long Winter In The Bakken [View article]
    Down 25%, I venture to guess we have further to go too. Ugly day.
    Nov 28, 2014. 12:54 PM | 1 Like Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    jiveyjr,

    Im glad you pointed out Z's article on NOG back on Nov. 7th, as he is a very good analyst and has always done a nice job. I had read the article, and usually do read his stuff, but I think you may be missing the point we have been trying to make at Splitrock going forward into next year. We believe these specific names could have a real difficult go of it, and probably will continue to if we dont see an appreciable move in oil prices. When we say well hedged, that would depend on how you want to look at things. When compared to other producers, 68% hedged looks very good when compared to an average of 50% hedged in 1H15 and 30% (or less) in 2H15. $90/bbl is a good enough price to participate in most wells throughout its leasehold and in that case does give them some breathing room. But (and this is a big but), Oil prices continue to head lower and there isnt anything to show this will stabilize anytime soon, and we havent even figured out Bakken Light differentials and how those will expand as production will probably not be affected in the short term so one could assume those differentials are going to move in a more negative direction. If we use the current price of WTI (like I said, we think this number may head lower) of $73.80/bbl. Bakken differentials are another $11/bbl which brings realized pricing to $63/bbl. So 32% of production will be sold at a 30% discount to its current hedged price. If we see oil prices decrease from the $74/bbl level and Bakken differentials widen we could easily see Bakken light realized pricing levels below $60/bbl. I would just be careful here until we see oil prices stabilize.
    Nov 26, 2014. 12:26 PM | 2 Likes Like |Link to Comment
  • Bakken Update: Halcon May Struggle To Find Economic Wells In 2015 [View article]
    gdorlene,

    Should be another good run at the Championship with the Bison again this year. This one looks to be more interesting than the last two.

    Go Bison!
    Nov 25, 2014. 04:30 PM | Likes Like |Link to Comment
  • Bakken Update: Halcon May Struggle To Find Economic Wells In 2015 [View article]
    Pablo,

    Yep, the cost is higher and there are federal rules in the bidding process as to whether a Native controlled company would get a bid. Someone else may know this better so jump in if I say anything incorrect here, but If there is a Native owned company (lets say trucking) and it placed a bid within 10% of the highest bid, the Native company is supposed to get that contract (I cant remember if its 10% or 20% but you get the idea). When I say its supposed to work that way, it doesn't always happen. I know of several occasions where Native owned companies didn't get the work, but in some cases I think if there aren't attorneys involved nobody really listens. Much of the cost increases have to do with poor infrastructure, like not having adequate power lines, etc. as many of these towns on the reservation haven't been developed in a way that would support oil drilling and because of this getting started has been more expensive. I think costs on Ft. Berthold average about $400K to $500K more per well than in other better developed areas.
    Nov 25, 2014. 04:28 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 May Be A Difficult Year For This Bakken Non-Operator [View article]
    phaedrus1952,

    Uniform placement of sand has been their forte, and is probably the missing variable in the industry with respect to EOG produces results so much better than anyone else. It is why each little part of the process can be so important with respect to completions as 16 million pounds of sand does no one any good if the exact volumes are aren't pumped just where they need to go.
    Nov 25, 2014. 04:14 PM | 1 Like Like |Link to Comment
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