The Bakken: the rail revolution -- everything investors need to know -- Richard Zeits, SeekingAlpha, I thought this had already been posted some time ago, but here it is again.
2013 is shaping up as a strong year for the Bakken, in contrast to 2012 when the play was hurting from skyrocketing drilling and operating costs, severe infrastructure bottlenecks, exploding basis differentials, and disappointing economics, forcing some operators to scale back their drilling plans.
Looking forward, several positive factors are at work that should filter through to favorable year-on-year financial comparisons and contribute to a brighter outlook for the play in general: Crude oil takeaway issues have been largely resolved, with ample rail availability and major pipeline capacity additions expected in 2014-2016.
Natural gas and NGLs should become increasingly bigger contributors to operators' bottom lines as the build-out of processing and pipeline infrastructure is beginning to bear fruit and should catch up with production within next two years. Deeper Three Forks exploration is gaining momentum in 2013 and may quickly transition from a geological concept to proven reality, adding a large new dimension to the play.
Continental Resources is ramping up an aggressive Deeper Three Forks exploration program, now with 15 additional TF2, TF3 and TF4 tests planned for the year (on top of four successful wells to date). Kodiak Oil & Gas has initiated two multi-well pilots that include TF2 testing. Tests by other operators will likely contribute many additional data points.
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