XTO Energy (XTO) released the results of a well in the Bakken Shale play in North Dakota. The company completed the Jorgenson 43X-04 and the well produced at an initial production rate of 2700 barrels oil equivalent (BOE) per day. XTO Energy did not say whether the production was a 24-hour rate or the average of the first seven days. The well was drilled into the Three Forks/Sanish formation.
This highlights one of the problems I have with an over reliance on initial production rates by investors. Some exploration and production companies don’t disclose the timing of the production (24 hour, 7 or 30 day), or the choke size.
This can make initial production rate comparisons between companies problematic. I don’t mean to single out XTO Energy and its recent Bakken Shale well for persecution, as this is an issue across the entire exploration and production industry.
If you look at a chart of XTO Energy, it has been stuck in a trading range, and has not broken out to a new high like many of its peers. Could this news be the push that it needs to break out?
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