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More Really Bad News For The Bakken

Mike

Well-known member
Houston-based Occidental Petroleum Corp. is reportedly selling its Bakken shale assets in North Dakota at a steeply discounted price of $500 million to Lime Rock Resources private equity firm in Houston.

Reuters broke the story, but Guy Baber of Simmons & Company International wrote Friday that Occidental was shopping the acreage in the fall of 2014 for as much as $3 billion. Occidental was still seeking at least $1 billion this summer, according to Simmons.

Both Occidental and Houston-based Lime Rock Resources declined comment, and refused to confirm or deny the reported sale of roughly 300,000 acres.

The Simmons note contends that Occidental’s view of the Bakken has rapidly deteriorated since it invested heavily five years ago. The combination of low oil prices, cash flow pressures and Occidental’s greater successes in Texas’ Permian Basin “likely resulted in the willingness for management to move forward with the deal at a discounted price,” according to Simmons.

“The transaction is sensible strategically, and was unexpected right now by the market,” Simmons added.

Simmons projects Occidental to report weaker earnings per share when it reports its third-quarter earnings Oct. 28. However, overall, Simmons added that Occidental has a strong Permian position, a solid balance sheet and some capital spending flexibility moving forward.
 

mrj

Well-known member
Sounds like the state of ND will weather this down turn in the oil economy ok for a while, though. A news story on taxes lost due to it also stated that the state has several BILLION in tax income stashed away in several accounts. It was wise of them to not spend it all while it was coming in and times were booming. I would guess quite a few states would have, on the belief the good times would keep on rolling it in.

mrj
 
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