The Rising Influence of Rising Affluence

[dewophile]

hess

hi sorry for the late reply i have been away on vacation

But at the moment, Bakken production as a share of total production, is more of a problem than an asset because that oil is sold at a large discount to a dropping price for WTI.

this is not as big a problem for hess as it is for other bakken producers because they have their rail infrastructure to deal with the glut in the bakken. on the last cc they mentioned they are shipping 25 or 27 K barrels a day and it will be over 50K by year end - which should account for 3/4 or so of their bakken output

in fact i thought long and hard about this issue (bakken glut) before buying the stock. i had been folloiwng MRO closely too and was seriously thinking of taking a position - as you know they have a strong position in the eagle ford with easy access to gulf refiners. in the end i bought hess in part because they will be able to get premium pricing for most of their bakken production and the valuation seemed a bit better (i find the companies comparable in that both are more levered to brent at present, but have most of their growth tied to us onshore production via unconventional plays).