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  • Whiting's Buy Shows How The Bakken Is Changing  [View article]
    Carl: I agree. KOG did a pretty good job, and thanks to Bill--who persuaded me that management was ok if not great back in the $2's--I was able to do quite nicely out of the stock. (I'd say that Bill's calls on this stock have been uncanny, except he's done the same on SYRG, BCEI, GST, MRD, GEOI and a host of others).


    I still have a bit of KOG left and am probably going to let it turn into WLL shares. Not as much upside there, but there is still some and it has more protection on the downside I think.

    Overall, it seems to me to be a reasonably fair deal. Not great, but if there is a better bidder out there it can make a bid. I doubt that will happen, though because I don't think anyone wants to pay up for KOG (or pretty much anyone else).
    Jul 18, 2014. 04:56 PM | 2 Likes Like |Link to Comment
  • Memorial Resource Development: An Interesting New Pure Play Cotton Valley Name  [View article]
    Toby:

    And the numbers appear to work. The last 4 wells averaged 25 mmcfed for the first thirty days; they are getting around $5.80 per mcfe because of the condensate and NGLs; and their cash costs are only about $1.00 per mcfe. With those kind of numbers the IRRs become staggeringly good. Indeed, the new wells probably have more liquids in them than average, so figure sales at over $6.00 per mcfe.

    Of course, IPs of 25 mmcfed of pretty wet gas for the first thirty days will result in some very fancy numbers if depletion isn't too rapid thereafter, and from the S-1 it appears that depletion in this area is fairly restrained.

    My real question is can they replicate these wells? Can they continue, for example, to get 10-15 mmcfed for 30 days in their other Terryvile wells.? If so this thing will be a grand slam. In addition, they just locked up $600 million with a coupon of less than 6%, which I think means they have no funding worries until they go cash flow positive. So if the geology stays positive, this is going to be a cash-flow machine.

    And that is the risk--the geology needs to stay positive. But given that is a risk for every E&P, I have to like this one. Steve was right on point here, I think. (Disclosure--I own the stock and am buying more).

    Jeep.
    Jun 28, 2014. 01:30 PM | 1 Like Like |Link to Comment
  • Memorial Resource Development IPO Expiration Provides Hot Buying Opportunity  [View article]
    I should first note that I own MRD and will be buying more on dips, if possible. Having said that, investors should go to the S-1 and take a look at their phenomenal recent well results. If they can replicate those this is going to be a home run, particularly since this is fairly wet gas with a nice slug of condensate in it. Because of that, they have been netting around $5.80 per mcfe recently, which is quite a bit better than what one gets for dry gas. Jeep
    Jun 26, 2014. 09:57 AM | Likes Like |Link to Comment
  • Is Kodiak A Solid Long-Term Investment?  [View article]
    Chuck:

    I have to caution you on Bill's caution that his is only "one man's opinion." While that is correct, Bill is unduly modest.

    Among other things, Bill was the guy who first persuaded me that KOG was the real deal. The stock was $2 at the time. He also liked OAS at the IPO, pounded the drum for BCEI (IPO was something like $15 and it is 60 now); identified SYRG at around $4 and (properly) questioned my bullishness on MMR. He also like GST at $3 (it's 8 now).

    I'm pretty hard headed but I've learned that when Costello talks, people ought to listen. (He's had a pretty fair run at his mutual fund as well).

    Jeep
    Jun 20, 2014. 09:43 AM | 1 Like Like |Link to Comment
  • Memorial Resource Development: An Interesting New Pure Play Cotton Valley Name  [View article]
    Steve: Nice write up. If they keep drilling and completing wells like the recent ones, the stock is going to rocket. I bought some, and I'm hoping to buy more on dips. This could be the BCEI of 2014. (And the fact that Bill likes it also is even more reason to like it).
    Jun 18, 2014. 05:43 PM | 1 Like Like |Link to Comment
  • Apache Holds Steady As Top Texas Oil Producer With Value  [View article]
    Good comments, and I agree. Having a Chinese partner certainly helps, because while foreign governments know that the US won't help a nationalized oil company very much, the Chinese might. Besides, unlike us, they pay bribes and that always helps to keep the nationalization/outright theft threat at bay.
    Jun 17, 2014. 06:47 PM | 1 Like Like |Link to Comment
  • Apache Holds Steady As Top Texas Oil Producer With Value  [View article]
    Apache has some very nice assets. But here's the question. What happens if the government of Egypt, which is both broke and in desperate need of pleasing its people, nationalizes foreign oil assets? Apache has a lot of money tied up there.
    Jun 17, 2014. 08:52 AM | 1 Like Like |Link to Comment
  • Is Kodiak A Solid Long-Term Investment?  [View article]
    Good points, but keep in mind that KOG has a history of missing its estimates, and one really should bake that into any valuation of the company. Overall, like a lot of small E&P's it has been growing at tech-company like rates. However, that growth has been financed by a lot of debt recently, and it is that debt--and not its history of missing estimates--that is the real risk in the stock. A prolonged downturn in the price of oil would hurt KOG a lot.
    Jun 17, 2014. 08:27 AM | 5 Likes Like |Link to Comment
  • Bakken Update: Bonanza Creek Is Up Over 20%, More Potential Ahead  [View article]
    Mike: Exactly. That is why I think the long term is up, prices in the $60's really don't make a lot of sense for 2014. Next year, if the wells hold up decently, then $60 numbers do start making sense, I think. Of course, I always have an easier time seeing the downside than the upside!
    May 30, 2014. 08:35 AM | 1 Like Like |Link to Comment
  • Bakken Update: Bonanza Creek Is Up Over 20%, More Potential Ahead  [View article]
    Nice article, Mike. I've observed that one can use the volatility in BCEI to trade around a core position. I'm currently skeptical of $60+ numbers (for 2014) and thus would tend to start selling trading shares if the stock moved north of the low 50's, but in the long term the price is going to go up if WTI stays where it is or higher. Jeep.
    May 29, 2014. 02:01 PM | 1 Like Like |Link to Comment
  • Bakken crude is highly volatile, but railroads also deserve blame for accidents  [View news story]
    Gosh. Who would have dreamed that 40 degree API oil would have lots of gas and condensates in it and that heavier oils would have less?

    If we had a sane government, it would get on with the business of allowing pipelines to be built and getting volatile petroleum products off the rails. But we are told the Keystone pipeline is unthinkable because it would carry petroleum, which when burnt gives off CO2, which is bad. However, putting the same petroleum in rail tank cars is good, even though most of it will be refined as fuel and burnt and give off the same CO2, while the trains also burn diesel, which gives off more CO2.

    As far as I can figure out, to the geniuses running our government, the CO2 given off by petroleum-based fuels is bad if the petroleum is transported by pipeline, but less bad if it is transported by rail. Or something.
    May 16, 2014. 12:54 PM | 12 Likes Like |Link to Comment
  • Bakken Update: Recent Kodiak Completions Model 1000+ MBoe  [View article]
    Mike: My own guess is that we are probably starting to press the edge of the envelope on infill, and some of the lower formations will be mediocre--with present technology. I've noticed in the years since I started investing in Bakken drillers that the technology keep getting better and apparent geology problems often be at least partially solved by getting the technology right for the specific formation. Moreover, when you pad drill, you potentially save so much in costs that the EURs don't have to be huge for drilling to remain economical. In addition, none of those EURs include recompletions down the road, and I think those are going to be intriguing.

    In the end of the day, while I think stock prices are fairly high right now, I'm betting on the ingenuity of industry to constantly increase today's very low recovery factors. That might be incorrect--but I do think it is how to bet.
    May 11, 2014. 07:29 PM | 4 Likes Like |Link to Comment
  • Kodiak Oil & Gas: A New Paradigm - A Moderate-Risk Development 'Story'  [View article]
    Richard: That is a nicely made point. Costs certainly matter in drilling, but productivity (and the price of oil) is what truly drives value.
    Apr 15, 2014. 11:32 AM | 2 Likes Like |Link to Comment
  • Bakken Update: Recent Kodiak Completions Model 1000+ MBoe  [View article]
    That is great news, Mike. Congratulations! Jeep
    Apr 4, 2014. 06:52 PM | 1 Like Like |Link to Comment
  • Bakken Update: Recent Kodiak Completions Model 1000+ MBoe  [View article]
    Mike: Good job. 1 million boe EUR's are simply amazing compared to where we were a few years ago. The Bakken just keeps getting better as they figure out the best ways to produce. Jeep
    Apr 4, 2014. 09:42 AM | 6 Likes Like |Link to Comment
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