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Michael Filloon  

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  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Bearcatbrant,

    Sorry bout that, I guess that was more of a rhetorical question.
    Aug 10, 2015. 11:27 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    2whiteroses,

    Production generally depends on the oil price from the year before (sorry if I am being too general). After the financial crisis, oil prices dropped fast and many of the US operators did not have much by the way of hedging. This just about put most of them out of business. Since then, most actively hedge to protect against those types of losses. The only issue with that is it also can take away some upside if oil prices go in the other direction. But it can influence production, but not as much as say oil prices due. The best way to explain is hedges are more forward looking and a way to protect a business from the fluctuations of oil prices.
    Aug 10, 2015. 11:20 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    PetroEngInvestor,

    Thanks for the excellent description!
    Aug 10, 2015. 11:10 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    PetroEngInvestor,

    So true! I find it funny some of the so called "models" that some people try to figure out in their heads. Or when one tries to use the Arps method with no training. Not sure how one can complain about high rates of decline on wells, when production to date is what matters more. I know decline is an issue, but not the way some use it to define unconventional oil and gas.
    Aug 10, 2015. 11:05 AM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Bison73,

    I am counting the days as well. I think he goes early 2nd (probably top 40) but Im not sure who is looking and how hard at the qb position. Looks like most of the analysts are looking for him to throw more instead of run, but he has done such a nice job of scrambling, not sure why the critics are unhappy about having a little speed.
    Aug 10, 2015. 10:50 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    dnpvd51,

    Thats not necessarily true. Once core acreage has been leased, operators moved on marginal areas that were still productive at $100/bbl oil but those economics are not there now. Other operators bought marginal acreage because they did not have the funds to purchase anything substantial. It is important to note that when an operator leases acreage, there is a time limit to get those acres held by production. Since the operators generally make a substantial investment in those acres, they are motivated to get at least one well drilled. Once there is a producer in that area (section) the operator can wait for higher oil prices to drill the rest of it. So operators dont just drill and complete the best areas when in the exploratory phase of development. They need to get all of their acreage held by production, once that occurs they can develop however they see fit. Now that prices are low it will be interesting if any operators just let go of some of their leases.
    Aug 10, 2015. 10:43 AM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    jgrever621,

    Contango has made it difficult as oil traders can purchase oil and sell it later at an increased value (about 1% per month, maybe more) by sticking the crude in storage. When we move to backwardation it should help get some oil out of storage and back onto the market.
    Aug 10, 2015. 10:33 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    ckarabin,

    Thats correct. The EIA does estimate the most recent production (2 months, I think) and revises that number at a later date. It is possible production has rolled over more than expected, which is a possibility. But there it is possible that number is higher as well. Tough to know at this point, but we look forward to seeing those numbers.
    Aug 10, 2015. 10:14 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Blue22,

    Thanks. It is possible that the past couple of months will show a different revision with respect to oil production since the EIA does estimate those numbers. But we go with the numbers that are given, and estimate some of that production based off of completions work and how it is changing with respect to where and how. So we will wait and see what the numbers really are when that revision occurs. Thanks for commenting!
    Aug 10, 2015. 10:12 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    arnoldbird,

    I dont know if an approximate 2% decrease is considered rolling over. 9.6 may constitute a top in production, but rolling over may be an exaggeration with the decrease in daily production estimated by the EIA. Production actually increased in the US last week. Thats not to say we dont see a large decrease sometime in the near future, but currently we have not seen a big move in either direction in a while.
    Aug 10, 2015. 10:08 AM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Good stuff Aricool,

    Thanks for posting. It was an interesting call.
    Aug 10, 2015. 01:52 AM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Aricool,

    CLB is 100% correct about shorter stages. That's been something that has needed to be done for a long time.
    Aug 10, 2015. 01:47 AM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Monkeytoto,

    Currently the world is producing about 3 million bbls/d more crude than we are using, even if Iran can do what it says and produce another million we get to 4. Current world demand is around 93 million bbls/d, so in reality any of the world's major producers could push oil prices around. Overproduction isn't a lot as a percentage.
    Aug 10, 2015. 01:41 AM | 2 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Bearcatbrant,

    Cushing is the best known crude storage hubs, but oil is also stored near and around refineries. So the Gulf Coast is another large area of storage.
    Aug 10, 2015. 01:36 AM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    2whiteroses,

    Im am sure someone else could explain this a little better but a hedge is a futures contract used to reduce any substantial losses/gains. Some believe hedges contribute to higher production, but higher production has more to do with what oil prices are at the time. So if an operator is able to hedge oil at a higher price because oil prices are high in upcoming quarters and then oil prices tank, the operator will have already planned its production/hedges and probably produce accordingly. Since production is planned a year in advance (as hedges usually are) production may remain higher. The operator doesn't have to produce the barrels of oil. Since this is a futures contract, it can be sold for a profit or may have to pay depending on where the price of oil settles. On the other hand, if an operator didn't hedge it would probably cut production much quicker as oil prices went lower, so depending on how you look at it one could think that is contributes to higher production longer although its main purpose is to protect the operator from huge losses when the price of oil heads lower like it has now.
    Aug 10, 2015. 01:35 AM | 2 Likes Like |Link to Comment
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