Updates
February 16, 2018: the official North Dakota state Legacy Fund deposit for January: $46,242,885.80. My average was off by $2,374,163 or 5% below the actual amount.
January 11, 2018: as of this date, this would be my projection -- Legacy Fund deposit for January, 2018, estimate --
- high end estimate: $50.0 million
- mid-range estimate: $43.9 million
- low end estimate: 38.3 million
Price of Bakken
|
Legacy Fund Deposit Projected
|
Legacy Fund Deposit Projected
|
Legacy Fund Deposit Projected
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Price WTI
|
|
Projection January 2018
|
$50.81
|
Average
|
High end
|
Low
|
$62.00
|
as of Jan 11
|
$43,868,722.22
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$50,088,644
|
$38,280,059
|
January 4, 2018: from a reader via e-mail --
I noticed your discussion about the Bakken/WTI price differential as a factor in predicting Legacy Fund deposits (see original post below).
The director uses the North Dakota Sweet price from Flint for his number. See this post to see how to access this data.
The prices received on our production has consistently tracked well above the NDS price for a long time now. In fact, for the last 3 months the price received has been about $1 or so above WTI itself. Since the DAPL came on, the differential with WTI seems to have disappeared. I think it must be due to Bakken oil being shipped to more markets now so the Flint average doesn’t seem to work anymore.
Original Post
Some data points:
- Historical price of WTI (EIA): link here
- Price of Bakken oil: based on Director's Cut which comes out monthly; tagged;
- Legacy Fund deposits: link here
Price of Bakken
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Deposit, Reported
|
Ratio
|
Forecast
|
Price WTI
|
Delta
|
|
Director’s Cut
|
North Dakota State Legacy Fund
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Deposit divided by price of Bakken oil
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Based on average ratio and estimated price of Bakken oil
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Last week of the month
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WTI - Price of Bakken oil
|
|
EIA data
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||||||
February 2018
|
||||||
January 2018
|
||||||
December 2017
|
49.25
|
44,431,000
|
902,152.28
|
$60.46
|
$11.21
|
|
November 2017
|
49.75
|
37,479,000
|
753,346.73
|
$58.35
|
$8.60
|
|
October 2017
|
43.56
|
37,220,000
|
854,453.63
|
$55.63
|
$12.07
|
|
September 2017
|
39.56
|
33,461,000
|
845,829.12
|
$51.67
|
$12.11
|
|
August 2017
|
37.93
|
31,803,000
|
838,465.59
|
$47.32
|
$9.39
|
|
July 2017
|
35.83
|
35,319,000
|
985,738.21
|
$49.57
|
$13.74
|
|
AVERAGE
|
863,330.93
|
$11.19
|
||||
*********
|
********
|
*********
|
**********
|
*********
|
**********
|
***********
|
$49.81
|
863,330.93
|
$43,005,391.29
|
$61.00
|
|||
$50.81
|
863,330.93
|
$43,868,722.22
|
$62.00
|
|||
$51.81
|
863,330.93
|
$44,732,053.15
|
$63.00
|
|||
$52.81
|
863,330.93
|
$45,595,384.08
|
$64.00
|
|||
$53.81
|
863,330.93
|
$46,458,715.01
|
$65.00
|
|||
High end
|
Low end
|
|||||
$45,841,364.74
|
$38,280,058.69
|
I don't know if this chart will make sense to anyone. That's fine. I'm doing this for my own benefit to see if it's possible to "predict" the monthly deposits going into the North Dakota state Legacy Fund with any degree of accuracy (and I use the word "accuracy" quite loosely -- LOL).
This is simply some "back-of-the-envelope" doodling. It's for my benefit only. Most folks will think it's completely bogus. That's fine.
There are way too many variables to be able to predict the the monthly Legacy Fund deposits, not least of which:
- which day of the month the deposits will be made
- the price of WTI
- the price of Bakken oil
- how closely the monthly deposits track with the estimated price of Bakken oil
- the crude oil and natural gas production data
I think the the top half of the spreadsheet (above the asterisks) is self-evident and I won't add anything here.
The bottom half of the spreadsheet (below the cells with the asterisks)is a bit more confusing.
- start with the far right column; that's the hypothetical price of WTI ($61 - $65/bbl)
- from there, the estimated price of Bakken oil is derived (second column below the asterisks) based on the average delta between WTI and Bakken oil (top half of the graph)
- the fifth column, labeled "Forecast" is the estimate of the deposits for future months based on the average ratio (from the top half of the spreadsheet) and the estimated price of Bakken oil
- so, for example, based on a WTI price of $65, the estimated price of Bakken oil would be $53.81 (the delta, $11.19 is the average from the top half of the spreadsheet); in this case, the likely deposit for January, 2018, based on $62 WTI would be $43,868.722.22
- for the "high end" case, I took the product of the highest ratio (902,152.28) and WTI at $62 and got $55,933,441.62
- for the "low end" case, I took the product of the lowest ratio (753,346.73) and WTI at $62 and to $46,707,497.49
Bottom line: it appears that the "likely" Legacy Fund deposit for January, 2018, will be:
- high end: $46 million
- most likely: $44 million
- low end: $38 million
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