Goldman cuts forecast, page-37

Cmon, When we look at the second reserve report we can see the reserves are higher than the first one so imo if the current production profile supports the higher reserves then for this 2016 year reserves will increase without drilling. If prices increase or production costs decrease then reserve value will also increase which ties with your last two points.

If the current wells production is below capacity due to price and/or flaring then the decline we are seeing is not natural decline but planned decline, therefore if the EV calc is production x $35k/boe plus cash less debt the current MC looks right but doesn't include any value on the other assets. If the production increases with price then this means the current MC is undervalued by any change in production and price and this is the big unknown.

The NS field still has potential for infills and these development wells have high success rates so imo if price increases it would be lower risk to increase reserves quickly but when coy is ready with the banks support. Meanwhile the planning continues on the new project keeping the powder dry for better days if they occur.


Currently for small investors I don't think it is about picking winners as the market is not interested in O&G however I think it prudent to stay away from the loosers which are likely to be the ones currently attracting the capital markets attention as that (Cr's) is how they make there money. Potentially they are good s/t trades but much more L/t risk if stuck in them due to the low liquidity when Cr's complete. A simple EV/MC comparison and check of cash on hand vs aspirational spending plans highlights those with potentially bigger issues than here and some of the others. These companies have to drill otherwise they are stuffed. The good ones can sit back cautiously and plan for the future imo so it is really a waiting game.

Found some other good articles today worth looking at also worth considering to balance with my opinion above:
only-1-of-the-bakken-play-breaks-even-at-current-oil-prices/
q3-bakken-themes-easy-to-identify

There are many unknowns atm and in time I hope the bigger picture will be clearer as many conflicting views which all have some merrit imo and worthwhile considering.
Cheers & GLTA