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Michael Filloon  

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  • Bakken Update: Bakken Operators May Get $1 Billion Tax Break [View article]
    Aricool,

    If I had to guess oil and all oil related revenues are closer to 25%. It could be wrong, but I derive that number by using the approximate revenues directly from wells and the estimated decrease over those two years in taxes. I know you know this, but we got oil service, midstream, etc. But more importantly is the construction revenues. They are building like crazy, that isn't just in Williston. My home town, Bismarck, has houses going up all over the place. Not to mention all the financial companies moving to town. I have a friend that owns a company that provides concrete, rebar, and other construction materials. His initial business was in Bismarck and now has one in Fargo, Williston and Minot. The growth is unbelievable, and a drop in oil prices will cause some short term pain, but I wouldn't guess it will do any long lasting damage. At least I hope not.
    http://bit.ly/1si3hbl
    Feb 13, 2015. 11:33 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Operators May Get $1 Billion Tax Break [View article]
    Pablo,

    Here is a great article. Rob is real good with these types of numbers and has posted some good info. Heres an article that goes over some of the numbers.
    http://bit.ly/1vJOhsK
    Feb 13, 2015. 11:16 PM | Likes Like |Link to Comment
  • Bakken Update: Bakken Operators May Get $1 Billion Tax Break [View article]
    Hi Aricool,

    That number can be a bit misleading. As those numbers are direct revenues from oil. It doesn't include all of the revenues from construction, etc., nor the additional jobs outside oil it creates. In reality, the number I probably much higher.

    http://bit.ly/1si3hbl
    Feb 11, 2015. 12:36 AM | Likes Like |Link to Comment
  • Bakken Update: Bakken Operators May Get $1 Billion Tax Break [View article]
    Levis,

    You may missing the point here. The taxable number is one that matters little. We can use a $10/bbl or $19/bbl differential. We can used $40/bbl or $60 WTI. We could use $30/bbl Bakken light, it is an estimated number that begins at the end of May. We estimate that the price of oil will be higher when/if the tax break is triggered. Plug whatever number you want into it, its still costing the state a ton of money. All said it cold cost ND over $5 Billion.
    http://reut.rs/197PzDq
    http://bit.ly/1si3hbl
    Feb 11, 2015. 12:33 AM | Likes Like |Link to Comment
  • Bakken Update: Bakken Operators May Get $1 Billion Tax Break [View article]
    dj10,

    To my knowledge no hedges in place, but they should have when they decided to keep the trigger tax.
    Feb 11, 2015. 12:18 AM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Scooter,

    The domestic rig count may drop to around 1300. At least that is our estimate.
    Jan 28, 2015. 03:07 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Thanks for adding that Carl. I appreciate it.
    Jan 28, 2015. 11:27 AM | 1 Like Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Douglas,

    It is possible but probably not likely. The reason has to do with what Carl is talking about with respect to pad vs held by production or single well drilling. In 2008, most operators had already accumulated a large acreage and had only begun getting that leasehold held by production. Because of this, there were more rigs per location than there are now as many of the better areas in 2015 are in development mode where bigger pads are being drilled testing well spacing, and exploring other viable source rock like three forks. Also, in 2008 the realized oil price needed was much higher so virtually all of the Bakken (with exception of EOG's Parshall Field) wasnt viable so there werent many options to move rigs to. Another issue had to do with hedging, as operators werent as well hedged in 2008 so they didnt have that buffer and were forced to stop drilling relatively quickly as opposed to today where they could make some decisions on how to weather this particular storm. So we probably wont see that big of a move and operators understand that most of the time in only takes about three months for the oil markets to turn around from a pullback (this will be longer) so drilling some holes are ok while operators try to deal down some of the oil service names to save some money, or maybe just hold off on completions work for a while until prices improve. Hope this helps, let me know if you have more questions.
    Jan 28, 2015. 11:27 AM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Hi Gregg,

    There are probably quite a few out there that know a lot more than I do about the Keystone, but the key point is it will pressure supply on the heavy crude side and not the light. Since the US produces a lot more light barrels the only way that it will pressure supply is if refineries start cracking an increased percentage of heavy barrels and not as many light. So indirectly yes, but not something we would notice much if the world economy was better and more refined barrels were being exported. Besides, it tougher on Venezuela, which isn't an all together bad thing.

    I would appreciate if anyone else had some additional insites on the Keystone, as I would like to hear some differing points of view.
    Jan 28, 2015. 11:11 AM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    coyote21,

    Best way to look at it, is operators have to drill somewhere. They are going to cut cap ex (obviously) and slow down some, but they wont stop all together. So they move rigs to the best areas where they can produce without losing as much money. So those rigs have to move. Rigs will also be brought off line, but not all of them. Keep in mind that operators are hedged and will continue to produce way too much oil through the first quarter before slowing plans significantly in Q2. Everyone knows that most of the best acreage is held by production, but that isnt the point. The point is operators are still going to produce, and realistically oil prices will recover soon as the additional supply on the market could come off relatively quickly. That is if the world economy doesnt get worse. The reality is operators arent going to stop working all together just because oil prices have pulled back. They understand this is a short term issue and that long term oil prices are probably going to average closer to $80/bbl.
    Jan 23, 2015. 02:37 PM | 1 Like Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Chancer,

    There is some fear by the Saudis as well. They know if they wait too long we will get more wells on line and those well costs will be very low (once wells are paid back). Since those wells only cost $10 to $20/bbl to operate, it puts us in about the same cost to pump. I think they felt motivated to put the breaks on as they think the market will get over supplied at $100/bbl. I would suppose they believe it is better at $80/bbl but its tough to say. Some of these wells have produced a lot of resource in a very short period of time and produce relatively cheaply.
    Jan 21, 2015. 07:41 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    hh77,

    The EIA estimates the peak will occur around 2016 with that production maintaining through 2020. After that time, it will begin to decline.
    http://bit.ly/1si3hbl
    Jan 20, 2015. 05:43 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Chancer,

    Its very possible, as we think $80 oil is needed for AMZG and this would mean payback times are in the three year range (which is excessive, but I think AMZG can continue to work in that environment on the premise they will continue to decrease costs).
    http://bit.ly/1si3hbl
    Jan 20, 2015. 05:39 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Hey Douglas,

    I would throw a couple more issues going forward with respect to how the oil companies look at these fringe areas. First and foremost, when oil was at $100/bbl, payback times were still quite good in many areas outside the core, in some cases meeting this in 18 months, which seems to be a magic number to most of the names out there. The accounting of these projects are very interesting as when I speak of payback, its a time frame as to how long it takes to payback costs. After payback, these wells produce at much lower costs, whether located on the Nesson Anticline or in west Williams. Wells need only $10 to $20/bbl oil prices to "breakeven" and this is why producers rush to get holes in the ground. Payback periods in some of those areas now could take a decade, which may mean these wells aren't economic anymore.
    http://bit.ly/1si3hbl
    Jan 20, 2015. 05:36 PM | 2 Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    marpy
    Very true.
    Jan 20, 2015. 05:25 PM | Likes Like |Link to Comment
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