Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
Aricool,
I had av unusually large position in PBF, so I sold some after a 10% move in a very short period of time. As for short term downside risk, not real sure. It is possible that WTI/Brent differential could pull back more, but hard to say anything for sure.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Aricool,
Most of the Gulf Coast refiners can run either light/sweet or heavy/sour, depending on differentials. From what I understand the first quarter provided better economics for light and sweet so most of the refineries ran A higher percent of that this past quarter. I expect this will change, but in the short term light and sweet will be more favoriable.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
Steven,
I have a price target in the $44-$46 range, so you are still good to go over the next twelve months. I had exited the position after a quick move 10% up. I re-entered after the earnings miss.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Thanks for the link Goobie, very informative. Every barrel that finds its way to Canada not only removes it from the glut in the US, but also adds a barrel overseas. The $5/barrel differential (if we get there) is interesting.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
g8tr,
I would lean towards OAS, just because it is a pure Bakken buy that covers a large acreage over a large portion of the play. I do think that a company would have to grossly overpay to get Kodiak, but that is just a feel I have for the company.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Aricool,
The Utica is much like the Eagle Ford in that it has an oil window, condensate (wet gas) window and gas window. The condensate window has been the most economic because the higher concentrations of natural gas push the liquids towards the well bore at higher pressures. This is needed unless the shale is deep (at least 9000 feet) because a deeper formation has better pressure which pushes the liquids as well. The Utica's oil window is to the west of the play and gets gassier to the east. The Utica's depth is shallow to the north and gets deeper to the south. Because of this the northern part of the oil window is not producing like anticipated. There are some rumors that the oil window will not produce but there is no proof of that. The Utica will be a very good producer in time. I guess what I am trying to say is it is difficult to know where the crude will end up, especially when you look at demographics. I am not saying that you are wrong by any means, but it is tough to know how all of these areas will produce in a few years. Much of the Bakken crude that is being railed is on five year contracts, but after that it is again tough to know.
I wouldn't count on the oil export ban being lifted either. Again I could be wrong but that is a big political topic that most politicians will not touch. I would be all for it, as I am a capitalist but just don't think it will fly, at least anytime soon.
There are deeper formations out there, but they are not cheaper. These formations will cost significantly more to drill and complete, but could very well out produce the Eagle Ford and/or Bakken in its best areas. That is an assumption on my part, but there are plenty of deeper formations, and some haven't been touched yet.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
Aricool,
You will definitely get another shot. I sold the majority of my position in PBF this am. Might have run away a little too soon, there may be more short term downside than upside. It has been a nice run.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Aricool,
I wouldn't take any of these pipe projects as a for sure thing. The refiners pay more to rail, but only have to sign deals over a few years versus the much longer ones the pipelines want. The one worry for the Eagle Ford with respect to shipping crude to the east coast is the Utica. Much closer and depending on production increases, it could be the reason to add pipe. Bakken crude will finds its way one way or another, to the refineries. But at some point all US crude pricing will pullback significantly. I don't think it is as much a Bakken problem as it will be for all of them. When production outpaces refining capacity, we will see production cuts, or at least the producers will have to wait on the deeper formations they are looking at. Costs in the Bakken are higher, but that depends on where the service company is working. Plus they have to cut because of pad drilling and zipper fracs. Companies can now complete three wells in the same amount of time as it use to do one single well. As for costs, there is a huge difference in Williston vs. Mandaree. Costs on the reservation are very high, while other areas are beginning to decrease. I think wages will always be higher in ND because of the weather, but some of the other costs will mediate some as the areas are developed.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
Pablomike,
OAS results were very good. I wish I would have been on that one as well. TPLM didn't say for sure what it would do with Rockpile. I think they would just about have to because of the limitations of using the revenues. If that happened the stock price would really move.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
Even with the Jones Act this is very positive for PBF. If changes are made, its Delaware City and Paulsboro refineries would have feedstock costs much like the Gulf Coast.
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
Aricool,
I don't have the exact number, but Kodiak is reasonably close to funding through cash flow.
Charlie Silly - Wells Fargo Advisors I just have a couple questions on, first looking into the back half of this year, looks like you guys get close to fully funding the capital program through cash flow, leverage metrics had down pretty quickly. Can you just talk about maybe strategically how you look at 2014 and beyond, you get the room financial to do something, do you do it to expand the portfolio at all?
Lynn Peterson - Chairman and CEO Well I think that’s where we are at, I think compliance, we want really good data out of our two pilot programs here. We are trying to have a better understanding of the spacing of these wells. Again there are other operators going to more wells. So we want to see what we call which will help us lay out future development here. We’ll try not to get too far ahead of ourselves as we go in and put wells, development wells and (inaudible) really good. I think generally speaking we’re going to be looking at the kind of same type of capital expenditure we have this year, kind of a similar type of rig count as we move into 2014.
I am unsure if $80 is still CLR's WTI price. All of the operators use a WTI number, which could vary depending on what Bakken/WTI differentials are. That number could be lower now that differentials have tightened. So really, it is tough to say, or at least I am unsure.
As for depletion, I think both deplete roughly the same. We would see the wells in northeast McKenzie deplete faster than Mountrail, just like we would in the condensate window of the Eagle For vs. the oil window.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
I had av unusually large position in PBF, so I sold some after a 10% move in a very short period of time. As for short term downside risk, not real sure. It is possible that WTI/Brent differential could pull back more, but hard to say anything for sure.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Most of the Gulf Coast refiners can run either light/sweet or heavy/sour, depending on differentials. From what I understand the first quarter provided better economics for light and sweet so most of the refineries ran A higher percent of that this past quarter. I expect this will change, but in the short term light and sweet will be more favoriable.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
I have a price target in the $44-$46 range, so you are still good to go over the next twelve months. I had exited the position after a quick move 10% up. I re-entered after the earnings miss.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013, Part II [View article]
Just haven't gotten to them yet.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
I would lean towards OAS, just because it is a pure Bakken buy that covers a large acreage over a large portion of the play. I do think that a company would have to grossly overpay to get Kodiak, but that is just a feel I have for the company.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
The Utica is much like the Eagle Ford in that it has an oil window, condensate (wet gas) window and gas window. The condensate window has been the most economic because the higher concentrations of natural gas push the liquids towards the well bore at higher pressures. This is needed unless the shale is deep (at least 9000 feet) because a deeper formation has better pressure which pushes the liquids as well. The Utica's oil window is to the west of the play and gets gassier to the east. The Utica's depth is shallow to the north and gets deeper to the south. Because of this the northern part of the oil window is not producing like anticipated. There are some rumors that the oil window will not produce but there is no proof of that. The Utica will be a very good producer in time. I guess what I am trying to say is it is difficult to know where the crude will end up, especially when you look at demographics. I am not saying that you are wrong by any means, but it is tough to know how all of these areas will produce in a few years. Much of the Bakken crude that is being railed is on five year contracts, but after that it is again tough to know.
I wouldn't count on the oil export ban being lifted either. Again I could be wrong but that is a big political topic that most politicians will not touch. I would be all for it, as I am a capitalist but just don't think it will fly, at least anytime soon.
There are deeper formations out there, but they are not cheaper. These formations will cost significantly more to drill and complete, but could very well out produce the Eagle Ford and/or Bakken in its best areas. That is an assumption on my part, but there are plenty of deeper formations, and some haven't been touched yet.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
You will definitely get another shot. I sold the majority of my position in PBF this am. Might have run away a little too soon, there may be more short term downside than upside. It has been a nice run.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
I wouldn't take any of these pipe projects as a for sure thing. The refiners pay more to rail, but only have to sign deals over a few years versus the much longer ones the pipelines want. The one worry for the Eagle Ford with respect to shipping crude to the east coast is the Utica. Much closer and depending on production increases, it could be the reason to add pipe. Bakken crude will finds its way one way or another, to the refineries. But at some point all US crude pricing will pullback significantly. I don't think it is as much a Bakken problem as it will be for all of them. When production outpaces refining capacity, we will see production cuts, or at least the producers will have to wait on the deeper formations they are looking at.
Costs in the Bakken are higher, but that depends on where the service company is working. Plus they have to cut because of pad drilling and zipper fracs. Companies can now complete three wells in the same amount of time as it use to do one single well. As for costs, there is a huge difference in Williston vs. Mandaree. Costs on the reservation are very high, while other areas are beginning to decrease. I think wages will always be higher in ND because of the weather, but some of the other costs will mediate some as the areas are developed.
Bakken Update: Investment Trends In The Bakken's First Quarter Of 2013 [View article]
OAS results were very good. I wish I would have been on that one as well. TPLM didn't say for sure what it would do with Rockpile. I think they would just about have to because of the limitations of using the revenues. If that happened the stock price would really move.
Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
I don't have the exact number, but Kodiak is reasonably close to funding through cash flow.
Charlie Silly - Wells Fargo Advisors
I just have a couple questions on, first looking into the back half of this year, looks like you guys get close to fully funding the capital program through cash flow, leverage metrics had down pretty quickly. Can you just talk about maybe strategically how you look at 2014 and beyond, you get the room financial to do something, do you do it to expand the portfolio at all?
Lynn Peterson - Chairman and CEO
Well I think that’s where we are at, I think compliance, we want really good data out of our two pilot programs here. We are trying to have a better understanding of the spacing of these wells. Again there are other operators going to more wells. So we want to see what we call which will help us lay out future development here. We’ll try not to get too far ahead of ourselves as we go in and put wells, development wells and (inaudible) really good. I think generally speaking we’re going to be looking at the kind of same type of capital expenditure we have this year, kind of a similar type of rig count as we move into 2014.
I am unsure if $80 is still CLR's WTI price. All of the operators use a WTI number, which could vary depending on what Bakken/WTI differentials are. That number could be lower now that differentials have tightened. So really, it is tough to say, or at least I am unsure.
As for depletion, I think both deplete roughly the same. We would see the wells in northeast McKenzie deplete faster than Mountrail, just like we would in the condensate window of the Eagle For vs. the oil window.
Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
Thanks for all the comments, you both are sharing valuable insights.