I'm gonna be gone all day tomorrow, Friday, August 6, 2010, so I won't be able to post as much as I would like. As it is, I cannot keep up with everything coming out of the Bakken during earnings season.
There are huge stories out there that are not getting the headlines they deserve; fortunately the Drudge Report provides many of them.
1. Putin will ban all Russian wheat exports this year due to drought. Russia is the #3 wheat exporter in the world. This is huge for North Dakota.
2. Obama's economic advisor resigns: I think the Obama team saw tomorrow's unemployment numbers and the meeting went downhill from there. If you recall, earlier this week, Mr Geithner said unemployment numbers likely to get worse before they get better. That spoke volumes.
3. Back to the Bakken: DNR upped their recoverable reserves in the Bakken by 3.5 times. That is huge. My hunch: the management team was blown away by what the geologists were telling them. If this is true for Encore (DNR), I don't know why it's not true for the other Bakken companies. Three and a half times. And that's only three years into the boom in North Dakota.
4. Marathon, in its conference call, says it is taking lessons learned in the Bakken worldwide.
5. Almost all Bakken companies are blowing away the consensus. CLR earns 60 cents; consensus 40 cents.
6. The Montana play is back in play. I would assume all those wells completed between 2000 and 2005 were fracked with a single stage; now they will go back in and re-frac with 14 - 30 stages.
7. My investment commentary has been posted.
8. The Anschutz gusher in the Cabernet is incredible: 40,000 bbls in 40 days, with an IP of 3,294. And no one gets excited about the IP; we've become numb to these numbers (of course, we no longer know what an IP means, do we?). Whiting's 100,000 bbl well in less than 90 days. As I've said before it only takes one monster well to move the needle for these relatively small Bakken companies. And nary a dry hole. Some may not be all that economic in the long run, but 98% hit oil. Even the ones that are dry, seem to be an anomaly: another operator comes in and hits oil.
9. The natural gas story is the sleeper. When natural gas goes above $5, the valuation of these oil and gas exploration and production companies will move meteorically. Is that a word?
10. "They" are starting to put in the equivalent of four and five wells in some sections in the Sanish.
11. The Niobrara is not a North Dakota play, but a lot of the Bakken companies are going to see the same success in the Wyoming Niobrara.
12. EOG opens a regional office in Stanley, and reports that the first time ever in the history of EOG, more revenue came from oil than natural gas, and most of that came from the Bakken.
For all the Louisiana roughnecks being flown into North Dakota: a big thank you ---
Picture This, Blondie
If it wasn't for the fact that I am so rooted in Minneapolis with a paid house and a good retirement income I would consider moving to North Dakota.
ReplyDeleteThat said, I ran across this fascinating story of the chemicals used in dispersants flowing into the gulf of Mexico before the spill.
"Mississippi River pours as much dispersant into the Gulf of Mexico as BP". http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/08/mississippi_river_pours_as_muc.html
I remember in the 1970's there was a big push to get phosphates out of detergents. Like an area of water with a lot of natural oil seeps nature probably adapts organisms to handle these dispersant type chemicals. This may be why the oil "disappeared" so soon after the BP well was capped. Also, interesting is how no one considered this factor until now.