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Michael Filloon  

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  • Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
    Thanks Goobie. I appreciate the info.
    May 7, 2013. 10:43 PM | Likes Like |Link to Comment
  • 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.
    May 7, 2013. 10:43 PM | Likes Like |Link to Comment
  • 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.
    May 7, 2013. 10:32 PM | Likes Like |Link to Comment
  • 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.
    May 7, 2013. 01:31 PM | Likes Like |Link to Comment
  • 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.
    May 7, 2013. 01:00 PM | Likes Like |Link to Comment
  • Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
    Aricool and Goobie,

    Thanks for all the comments, you both are sharing valuable insights.
    May 7, 2013. 12:45 PM | Likes Like |Link to Comment
  • Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
    Aricool,

    I am unsure as to what pipe is headed out that direction (I will try to look it up when I find some time and get back to you). As for a 20% cost reduction in the Bakken in 1-3 years, I believe this can be done, but I don't believe costs will decrease by 20% of the Eagle Ford. Both should see cost decreases so much of that would cancel the other out. If I had to guess, the Bakken costs have a little more to run down than the Eagle Ford but not 20% more. The refining capacity additions will help, but the Bakken oil will flow the path of least resistence, which may not be the East Coast in five years. It gets interesting when we start to see crude pricing reductions when we start to have some competition.
    May 7, 2013. 11:32 AM | Likes Like |Link to Comment
  • Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
    Aricool,

    I must have read that wrong. I was under the impression that it was $5/$6 to the US East Coast and another $2 from there to Quebec. Now that I re-read it, I didn't see the $2 was from Corpus to Quebec. Take a look at page 17 of the Howard Weil Energy Conference presentation from 3/30/13. http://bit.ly/10cHAsD
    May 5, 2013. 06:36 PM | Likes Like |Link to Comment
  • Bakken Update: Triangle's Accounting Issue Is A Non-Factor [View article]
    Aricool and jjmc,

    I have to page through some of my notes on this one. Take what I say here with a grain of salt as there are so many variables involved in figuring all in costs. The only proper way is to take a company that is in both areas and break down the differences. This is probably impossible, because no company would treat the areas the same (there is always a favorite). The rumor a couple years ago was EOG's Bakken guys felt little love when compared to employees working the Eagle Ford. This was true as the Eagle Ford is there flag ship, but it is important to point out the best areas of the Eagle Ford are better than the best areas of the Bakken. Gonzales County is better than Parshall Field. If we average the plays out this is a little less clear. Another important variable is Bakken costs have much more room to pull back as the play isn't as mature as areas of Texas. Another important variable is total number of wells which continues to develop in the Bakken. We wont know how these costs settle back until we get results on some of the bigger pad wells are drilled.
    I know I didn't say much with this comment but I am planning to show a little on costs in an upcoming article. Kodiak did state that with WTI prices at $90 to $95/bbl, it realizes margins of $50-$60/bbl. I am happy I have been right about Bakken costs this year, but I didn't estimate it was going this well.
    May 5, 2013. 06:30 PM | Likes Like |Link to Comment
  • Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
    Aricool,

    I do agree with the points you are making, but it could be a while until the Eagle Ford produces enough to inundate the Gulf Coast and other area refiners. We may want to make the point that it could be a while until this does happen and to be prepared because Bakken crude sold for a $3.50 differential to WTI in the first quarter. There is not doubt that Eagle Ford oil is cheaper to transport, but that just means that Bakken oil pricing will decrease by the difference in cost.
    I do believe that this is going to be a very good year for the Bakken producers, and the prices they are trading have value through this year. The refiners are definitely a better long term play and the only thing that will change this is if the US allows US crude to be exported (which will probably never happen, as it would be a political nightmare for any politician suggesting it). Right now I am a buy and hold on the refinery sector (although I will probably trade it some too). I think some of the better Bakken names are a buy and hold through the end of the year, because I think costs continue to head lower through 2013 while price realizations will be good to very good though December. I think it is important to keep in mind selling the Bakken names would be a good idea by year end to maybe February of 2014. I could be wrong, and we could see Europe drag the world down through the year, but right now I think things stay pretty much the same through year end. Again, I do agree with what you are saying about Eagle Ford crude having an advantage in the longer term. The Bakken is just too disadvantaged do to location. and will always sell for whatever difference that transport prices are.
    May 5, 2013. 06:16 PM | Likes Like |Link to Comment
  • Bakken Update: PBF Energy Misses, But Continues To Increase Bakken And Canadian Feedstocks [View article]
    Aricool,

    It will be interesting when production reaches refinery capacity and how that will affect the refining situation in North Dakota. I have a feeling we will be hearing about more permits on diesel refineries. High complexity refineries are so expensive to build now I would find it hard to believe we will get one built anywhere in the United States.
    May 4, 2013. 11:06 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
    Aricool,

    Valero states $5 to $6 in their presentation from 3-20-13.
    May 4, 2013. 10:41 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
    Aricool,

    One thing I would add about Eagle Ford crude, is VLO did state when they shipped that specific crude to it Quebec refinery it did better than expected. Don't have a solid number here, but it would seem both Eagle Ford and Bakken crude doe well in Brent dominated refineries.
    May 4, 2013. 10:35 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
    My bad on the $2. It is $5 to $6 from Gulf Coast to East Coast and another $2 to Quebec Refinery.
    May 4, 2013. 10:28 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Well Costs Are Decreasing Faster Than Companies Indicate [View article]
    GOOBIE,

    Not to jump in on Aricools question, PBF's Delaware City and Paulsboro refineries have cokers and are well suited to refine heavy Canadian oil.
    May 4, 2013. 09:46 PM | Likes Like |Link to Comment
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