transforming nse, page-47

If anyone is interested in understanding a little more about the whole "marketing" of Eagle Ford shale and NA oil/NGLs/gas this report is a good start.

https://www.platts.com/IM.Platts.Content/InsightAnalysis/IndustrySolutionPapers/NewCrudesNewMarkets.pdf


North America is a very different market to domestic Australia. Probably one of the biggest differences is the pipeline infrastructure and how oil/gas get priced and sold.

I own stock in KMP, KMI, EEP, PAA as just a few examples of pipeline companies (on the basis that sometimes its better to sell the shovel to the prospector than be a prospector).


Surprised no one queried the trucked from wellhead commentary. Couple of reasons to truck - one would have been no pipeline nearby or capacity available, existing pipeline might have been destination Cushing and so a WTI based index price, or it could even be that their oil grade in incompatible with pipeline spec (doubt it though).


Much has changed with pipeline capacity and direction. Enbridge (EEP) reversed the flow direction for that pipeline to flow to Houston now. Kinder Morgan (KMI) added new pipeline to Corpus Christi (possible export destination if US ever allows export of crude oil - ex Can & Mex).


If you're going to dabble in US based oil & gas production you need to know how your property is going to market its product.

I remember a couple of years ago when I posted a few times on SSN, they were in denial that there was such a thing as the "Bakken Discount" where the price at which their product was sold was less than WTI.....

Probably behooves us to find out whether oil produced at Peeler Ranch is sold via pipeline (and if so which one and what is the pricing benchmark) or trucked out and sold (and then what is the incremental extra cost for that) and then finally what grade is the oil (Eagleford West, Eagleford West Light, Eagleford West Sour, ...)

I think all this makes a difference when you talking margins and profitability outside the sweet spots.