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Wednesday, July 17, 2013

KOG Just Went Over $9.00; Everything Seems To Be Going Right For Oasis -- SeekingAlpha

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KOG up almost 6% right now.

Headlines:

Suntrust: upgrades KOG from neutral to buy.
Time to take profits in the Bakken? -- SeekingAlpha
Everything seems to be going right for Oasis -- SeekingAlpha
In OAS' case pipeline transportation is now available for almost all of its production. In fact 85% of its oil production was flowing through gathering pipelines at the end of Q1 2013. OAS expects its cheaper delivery costs due to pipelines to increase its realized oil prices by $3-$5/barrel in 2013 and there may be still more future upside.
Keep in mind that OAS may also benefit from the confluence of WTI and Brent pricing by approximately +$10/barrel. This should mean quite an increase to both OAS' top and bottom lines over the long term.
On top of this OAS drove down its capital cost per well by 5% to $8.4 million. Its Oil Well Services subsidiary is a key factor in this. OAS' 2013 year end target is an $8.0 million capital cost per well.
This will amount to a -23% decrease in capital cost per well from 1H 2012. PAD drilling has been a key factor in this improvement. OAS' Salt Water Disposal subsidiary (Oasis Midstream Services) further adds to savings on lease operating expenses.
And that's just the start of a very interesting article. 

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