Large Capex Coming to the Williston and Permian Basins: Eli Kantor, Senior E&P Equity Research Analyst at IBERIA Capital Partners, Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - July 2, 2013 - The Wall Street Transcript has just published its Oil & Gas Review 2013 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends

Companies include: Continental Resources Inc. (CLR), Kodiak Oil & Gas Corp. (KOG), Whiting Petroleum Corp. (WLL), Pioneer Natural Resources Co. (PXD), Concho Resources, Inc. (CXO), Approach Resources, Inc. (AREX), Cimarex Energy Co. (XEC), ConocoPhillips (COP), W&T Offshore Inc. (WTI), St. Mary Land & Exploration Co (SM), Magellan Midstream Partners LP (MMP), Sunoco Logistics Partners LP (SXL) and many more.

In the following excerpt from the Oil & Gas Review 2013 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: As you look to 2013 and beyond, what kind of catalysts are you looking for from different firms in that price environment? Or does it come back to the winners of the resource grab?

Mr. Kantor: We take a look at catalysts from a basin perspective. In the Williston basin there are two overarching catalyst trends that we think investors should be paying attention to: the delineation of the lower Three Forks/Sanish, TFS, formations, and downspacing assessments. In the lower TFS, initial development was focused on just the middle Bakken, the first TFS benches. Recently, however, a number of producers, including Continental Resources and ConocoPhillips (COP), have begun testing the lower TFS zones with results that look comparable to what we've seen in the first bench. Continental is leading the industry in delineating this resource, and we expect a handful of new results to be announced over the next 12 to 18 months that should provide investors with better understanding of whether or not these lower benches produce independently and economically from the first horizon. It's the type of catalyst that could potentially double or triple resource potential within the basin.

On the downspacing front, market expectations have been set at 320-acre development across the basin. Continental Resources and Kodiak Oil & Gas have begun testing tighter well-density spacing in an attempt to improve recovery factors. Continental plans to test the industry's first 160-acre pilot later this year with results scheduled for early 2014. Kodiak is in the process of drilling two separate 12-well pilots that are going to test 210-acre spacing in their Polar and Smokey prospect areas. If either of these companies is able to prove that well productivity does not decline in the tighter well-spacing format, we would expect to see a rerating in valuations for all Williston basin producers.

The Permian is still going through an exploration phase where operators continue to test new concepts and new acreage positions. In the Midland portion of the basin, horizontal activity is starting to move north where a number of operators including...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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