Random Look at OXY USA -- Break-Even Point in the Bakken is Brent Oil Price of $55

First, some data points:

Regular readers should remember my blogs comparing Anschutz wells with OXY USA wells (for newbies, OXY USA bought Anschutz assets in the Williston Basin about two years ago).

It's been my impression that OXY is not all that enamored with the Bakken and will be shifting from of its assets from North Dakota to elsewhere, probably California.

In its 1q12 earnings conference call, OXY USA did not even mention the Bakken in its prepared comments. In the Q&A someone asked about Bakken, the horizontal play, and the costs. Here's the exchange:

Jessica Chipman - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Okay. that's helpful. And then I've asked this before and I'll ask this again, could you give us an update just on well cost within the Bakken, the Permian, particularly on the horizontal side and then California?

Stephen I. Chazen
Horizontal side? The Bakken stuff is still not come down to the level that's appropriate, so we continue to reduce our current -- we have a lot more better places to put money right now than the Bakken, so we're reducing that count. The rest of the stuff doesn't seem to change very much. The rest of the horizontal -- I think our service costs are essentially flat.

I didn't listen to the audio, so I don't know the inflection/intonation of the "Horizontal side?" but isn't that just classic: "Horizontal side?" As in, "Oh, yeah, I completely forgot about our horizontal play in the Bakken (actually I didn't forget; I was trying to avoid the issue; and who invited that analyst to the party?)."

So, along with Newfield, we have another company complaining about the costs of the Bakken, while BEXP, WLL, CLR, others suggest they are paying for their wells in under three years.

And then this, in Monday's (today's/yesterday's) daily activity report OXY USA has a permit for a wildcat in a most "oil-desolate" area in the Williston Basin, in northeastern Stark County. Yes, it's near Dunn County, just across the county line and it's in Stark County (one of the better oil-producing counties in North Dakota, but this one is pretty distant from producing fields.

• 23171, loc, OXY USA, Tomahawk 1-28-33H-141-93

And, then coincidentally this article in the WSJ today: OXY offers moxie when nerves fail.

• ... Occidental counts the Bone Spring, Wolfcamp and Wolfberry prospects among its largest land holdings. All three areas make a 15% posttax return at a Nymex oil price of $75 a barrel or less, ...
• California's Monterey shale, meanwhile, is estimated to hold more oil than the storied Bakken and Eagle Ford shales put together. Consultancy Wood Mackenzie estimates a cash break-even Brent oil price of $55. Monterey prospects make more use of vertical wells than of the horizontal, hydraulically fractured wells typical of other shale basins,...

So, we got a company that says it is cutting back on the Bakken, producing less than stellar wells (based on IPs) at high cost, and is now drilling in a unproven area of the Williston Basin.

That's what I love about oil men/women -- always looking for the next best big thing. This will be huge if OXY gets a nice well in northeast Stark County.