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Sunday, March 27, 2022

For Investors In The Bakken -- March 27, 2022

See "observations regarding wells coming off confidential list this next week" at this link.

  • Bakken operators earnings, 1Q22:
    • earnings and free cash flow should be huge, based on price of oil;
    • those earnings and free cash flow will not be as great as they could be;
    • those earnings and free cash flow could actually be less than expected:
    • very few operators are completing their wells
      • this could affect companies like NOG
    • unable to complete wells due to lack of workers
    • unwilling to complete wells with such high fracking sand costs, other costs
    • interestingly, this "completion issue" may have something to do with focus
      • a lot of DUCs have been completed; running up against two-year deadline
      • frack resources moved to older DUCs; newer wells will have to wait
      • might there be other reasons newer wells are not being completed?
    • unwilling to even add rigs because unable to complete wells
      • however, less rigs = less CAPEX
    • the calendar:
      • January is a tough month to produce in the Bakken
      • February is probably worse (and it's a short month)
      • March: road restrictions start to kick in
    • any good news:
      • EIA predicts huge jump in shale production in April, but might this be the Permian, and not the Bakken?

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