Updates
October 22, 2012: RBN Energy -- with all the recent interest in Bakken posting recently, today's RBN energy link is very timely -- the clash of the Titans: WTI vs Eagle Ford crude oil marker price -- who will win out?
Original Post
These are the prices I got per barrel on my checks for July 2012.
- Hess....$75.63
- EOG.....$100.61
- Brigham..$70.43
The EOG price has to reflect oil shipped by rail
ReplyDeleteto the gulf coast where it received European Brent oil prices, likely about $110 to $112 per
barrel. Rail costs are about $10 to $12 per barrel resulting in the net price. Hess and Brigham look like normal prices for July crude
that was sold for pipeline prices at Clearbrook, MN. You easily see why more than 50% of all Bakken oil is now being shipped by rail.
Is there any way to verify these numnbers, or can the oil companies say whatever they want about what "our" oil is worth? I get that pricing varies depending on where it is shipped, and how, but do mineral owners just have to take their word for how much it was worth? Maybe the $30 spread noted has to do with internal accounting rather than external circumstances. I mean, would the oil companies really lie to us if it meant more profit for them? (Sarcastic rhetorical question)
ReplyDeleteThe oil and gas industry is the most regulation industry in the US. It is also a very old industry. I can assure you there is a paper trail for these sales.
DeleteWish my well was with EOG rather than Hess....Hess and Brigham better hope that they have a good reason for the difference or I foresee lawyers entering their bottom lines.
ReplyDeleteA $3 dollar spread wouldn't raise an eyebrow, but a $30 spread, if true, will raise all sorts of questions...
Collars, hedges, contracts, locations of deliveries....
DeleteThey don't have a good reason...but being terrible at marketing the oil is more of an issue that should be brought up at a shareholder meeting, or written about in an op ed in a newspaper or blog.
ReplyDeleteAn operator does not prohibit you from taking your interest in kind, you can pick up your share of oil or market it yourself.
...some operators are better than others obviously. EOG knows what it is doing.
Brigham I feel, has some work to do......When did they lease the train cars? I can look at my check for that month.
This is simply a snapshot in time, from one mineral rights owner.
DeleteFor what it's worth here is my reported pricing on July checks;
ReplyDelete$72.04 North Dakota Madison production (Denbury)
$79.12 Montana Red River production (Denbury)
$75.97 Texas WTI (Chevron)
$77.44 Texas WTI (Kinder Morgan)
Typically the Texas WTI pricing exceeds MT & ND pricing ($10/$12 has been common. Yet increasingly there have been some months where it is the same, or lower, than the Williston Basin oil. Wonder if west Texas is now facing a similar pricing diferential problem due to the new boom in Eagle Ford production?
RBN Energy posted an update just today on WTI vs Eagle Ford. I linked it earlier: http://www.milliondollarwayblog.com/2012/10/on-tap-for-monday.html
DeleteThank you for taking time to comment. A lot of folks are interested in comparing their numbers.