Pages

Tuesday, May 7, 2013

EOG Surges $11

Some stories from yesterday following EOG earnings report.  Transcript here.

Profits more than expected -- Reuters.

Here's why the stock is rising now -- Wall Street Cheat Sheet.

This was the lede from the EOG press release yesterday:
  • Delivers Outstanding Crude Oil Production Growth of 36 Percent Year-Over-Year in the U.S. and 33 Percent Total Company
  • Surpasses Eagle Ford Production Targets
  • Announces Successful North Dakota Three Forks Second Bench Test
  • Reports Positive Results from Bakken Core 160-Acre Downspacing Program
  • Records Success from Permian Delaware and Midland Basins
When I saw those five bullets yesterday, I about fell off my chair. I did not expect the market to react like it is reacting today, but I knew that anyone who knows the Bakken will know what those bullets mean.

I still feel the easy money has been made in the Bakken (I don't know about the Eagle Ford) and now it's a "play" for long term investors. Any one of three middle bullets maybe game changers for EOG, and two of the three may be game changers for others in the Bakken, which means that perhaps, there's more to this than even I, most irrationally exuberant, can imagine.

There are three incredible points to be noted above:
  • of all the Bakken-centric companies, EOG seems to be the best positioned with "equal" interest in the Bakken and the Eagle Ford (as a counter-example, KOG has a challenge: it is only in the Bakken)
  • that success in the second bench of the Three Forks is huge, simply huge; it confirms what Harold Hamm and CLR have been saying for quite some time; the USGS 2013 survey of the Bakken/Three Forks had data from only the first bench, to the best of my knowledge; in fact, the USGS 2013 survey did not even mention "benches"
  • positive results in the Bakken core down to 160-acre spacing; closer reading will have to determine if the mean Bakken Pool (Bakken formation + Three Forks formations) or simply the Bakken formation; I believe it means simply the Bakken formation; if so, huge 
**********************
A Note For The Granddaughters

I continue to enjoy James Gleick's The Information, the history of information and the development of information theory.

It is interesting to come across little snippets that are so accurate in explaining phenomenon. This little passage explains the phenomenon of the belief in anthropogenic global warming very, very well:
It remains difficult to know when and how much to trust the wisdom of crowds -- the title of a 2004 book by James Surowiecki, to be distinguished from the madness of crowds as chronicled in 1841 by Charles Mackay, who declared that people "go mad in herds, while they recover their senses slowly, and one by one."  -- p. 420
From 1969, the best year ever for music:

Only Daddy That Will Walk The Line, Waylon Jennings

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.