The fourth quarter production numbers are not going to look good. More on this later, perhaps, but I've opined about it earlier -- within the last day or so.
It's hard to say how these production numbers will affect share price. Share prices are moving up with price of oil and with expectation that proved reserves will continue to increase.
Share prices will move down if investors do not understand the reason for the impact is due to a temporary event.
My hunch: there may be a buying opportunity in January/February for those interested in investing in the Bakken. Just a hunch.
If someone wants to understand how production numbers can throw a wrench in one's investing plans, look at what happened to WHX in the third quarter when production numbers were not met due to closed Enbridge pipeline following a spill. EOG took a shellacking, also, but for different reasons.
I think the oil spill actually helped WHX in the long run; that's a trust and will end when it sells a pre-determined amount of oil. Oil was selling for significantly less this summer when the spill occurred than now. I assume most oil is sold on contract, so it may not have amounted to a hill of beans, or a cup of oil, but just a random thought, while I'm rambling.
the most snow is north of interstate 94 from belfield to williston to devils lake, back to bismarck ..So the oil patch will be impacted greatly..
ReplyDeleteThis may be one of those rare opportunities when knowing a little about the geography of North Dakota and the impact of the winter, could make a difference in investing.
ReplyDeleteAll things being equal, if share prices pull back in January / February after the quarterly reports, it could be quite an opportunity. We will see.