Mike Filloon On The Permian -- December 11, 2018

Mike Filloon as a good article over at SeekingAlpha. He is exactly correct: the Permian bottleneck will continue as huge well results continue. Archived.

I don't follow the Permian very closely. But based on what the Bakken is doing, the Permian is going to blow folks away.

First of all, this pipeline problem. It's temporary. Free market capitalism will solve this problem sooner than later. I think there was even a post along that line not too long ago.

But based on the Bakken the Permian is going to surprise a lot of folks. The wells in the Bakken keep getting better and better; costs coming down; and, in fact, in the Bakken, less proppant than expected is being used, especially in the Three Forks.

Any question about the Bakken wells, just click on the "50K_Wells" tag and the "75K_Wells" tag.

I digress. From Mike Filloon and the linked article:

• Permian production continues to drive higher in the face of wide differentials and a pull back in oil prices.
• There are several ways to play this through E&Ps and pipelines, as the pullback in oil prices is overdone and take away capacity in on the way.
• PAA looks like a way to play the Permian pipeline build out, as it has significant exposure to the basin.
• CXO has 640,000 acres in the Delaware and Midland basins and continues to produce a large number of monster locations.  It provides a Permian focused operator with a large inventory of locations to complete.
• The market has been hit hard and many of the operators stock prices have suffered, but there seems to be value in the pullback. 

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