I try to keep the discussion on this blog at the level I would expect to hear while having lunch at the Economart in Williston, North Dakota, heart of the Bakken.
I'm not in the Bakken right now, but if I was/were there, I could imagine hearing this conversation:
Just some Economart chatter.One has to be in a good mood to see a day like this: the market in general is "melting up" as they say, moving up slightly despite all the headwinds. Despite Bernanke. Despite oil going back up.
Oil seems to have corrected (all of $3 off $110) and has bottomed (in short term) at $107 and now turning up, at least a bit.
KOG did not suffer significantly; I thought it would be much worse, but I guess analysts thought like Motley Fool: KOG has huge production increase; forget about missing estimates, "damn the torpedoes, full speed ahead."
I see oil just went over $108.
NOG also missed making a profit due to derivative losses; that seems to be a common theme. Same thing there; forget the quarterly earnings losses due to derivatives; five years from now, these little companies are going to have huge production -- these Bakken wells keep producing for 20 - 40 years based on history of Madison wells. These wells are going to be paid for in 3 - 5 years (closer to 3 years in many cases) and then keep producing for "peanuts" for 20-30 years longer.Some say oil could "crash" to $80. Wouldn't it be interesting if much of the Bakken drilling occurred during high price of oil, and then when drilling tapered off (10 years from now) and steady production for little cost, oil dropped back to $80 (in 2012 dollars). The margin for each bbl sold is high now, and will stay high in the out years even if price of oil drops.
If you were in SAT.
ReplyDeletehttp://www.mysanantonio.com/news/local_news/article/Oil-boom-produces-a-gusher-of-problems-3371992.php
anon 1
Sounds like the Bakken. I truly thought San Antonio area would have less problems. Very, very interesting. But the big story: it's the oil and gas industry that is leading us out of the recession. If only we had a "morning in America" mentality in Washington DC (both parties) again.
Delete"About 350 people attended Wednesday's pre-conference on housing."
ReplyDeleteRead more: http://www.mysanantonio.com/news/local_news/article/Oil-boom-produces-a-gusher-of-problems-3371992.php#ixzz1ntIWMPxw
What could 350 people do in one day? Build 10 houses? Talk? Talk is winning.
anon 1
In Williston, literally a handful of construction workers are putting up hundreds of homes. The homes are manufactured outside the state, shipped north, and then one or two construction workers put the houses on the site and build the garages (which are not built out of state, but built on site where the houses are attached to them).
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