Why CLR Surged Yesterday -- The Bakken, North Dakota, USA

Some headlines:

• CLR moves up in market cap rank, passing Aetna -- Forbes, yesterday
• CLR rises on unusually high volume -- TheStreet, yesterday

CLR didn't just "rise," some said it "surged." It didn't quite "surge," but it was a good day for CLR.

Why?

I'm glad you asked.

More headlines from yesterday.

• PSX makes $1 billion commitment to ship Bakken oil to its New Jersey refinery
• PSX signs oil-by-raid contract for NJ refinery -- WSJ, yesterday 
• GLP strikes deal with PSX; $1 billion -- Reuters, yesterday 
• GLP surges -- AP, Yahoo Finance, yesterday

From the WSJ article (when I get a chance, I will shorten this):

Phillips 66 signed a five-year contract for 50,000 barrels a day of North Dakota crude oil to be delivered by rail to its New Jersey refinery, the company said Tuesday, a move that underscores how important the North American oil boom has become to refiners on the East Coast.

Phillips 66's contract with Global Partners LP also cements North Dakota crude's hold in the East Coast refining belt, where Philadelphia Energy Solutions and PBF Energy Inc. already get crude from North Dakota's Bakken field by rail. Most pipeline construction has focused on bringing oil from West Canada and North Dakota to the Gulf Coast, leaving East Coast refiners relying on railcars to bring in domestic oil.

Under the contract, Phillips 66 will use Global's network of loading facilities and offloading terminals. The cost of the deal wasn't disclosed.

Even after shipping costs, a barrel of Bakken crude can be $10 less than the Brent oil imports that East Coast refiners have traditionally relied upon. That price difference has revived the fortunes of refiners in a region where last year numerous refineries were expected to shut down because of the high cost of imported oil.

"The ability to get crude from someplace other than the world market keeps those guys alive," said RBN Energy analyst Rusty Braziel said of the East Coast refining industry.

I need to do a better job capturing bopd at "Snapshot," but a quick look reveals that CLR produces about 100,000 bopd. 

Global, of course, can easily come up with 50,000 bopd when ND is producing 700,000 bopd, but it is a lot easier to sign contracts/make deals with as few producers as possible. I didn't price action of other Bakken-centric cmpanies, but something tells me ....

Regardless of which Bakken-centric producer is involved with this deal (and there may be none), PSX committing $1 billion to the Bakken is, should we say, non trivial?

From the Reuters link:

Oil production from the Bakken field more-than-doubled between 2011 and 2012 but connectivity from the field to refineries has not kept pace with the increased output.

But there is much more to the story.

GLP is headquartered in Waltham, MA, 5 miles from where I am today. I drive by it almost every week.

Investors may be interested in the profile of the GLP: this is where I begin to step out on a limb, so I won't post my thoughts, but folks might be able to connect dots with regard to a) the bit in bold above; b) the fact that the company was founded in 2005; and, c) the profile.

GLP, by the way, pays 8%. Just saying.

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