Note to me. look at this tommorrow (DAKP)

Note to others. I am not a stock analyst. I have nether the knowledge or intelligence. I look for comments and analysis of others. Then I fly by the seat of my pants unless I shoot first and ask questions later.


"Jumping aboard the North Dakota oil-by-rail shipping boom
Article by: DAVID SHAFFER , Star Tribune
Updated: January 19, 2013 - 3:07 PM

Wayzata's Dakota Plains built a terminal after seeing pipelines lacked shipping capaciy
Two years ago, Gabe Claypool had nothing to do with oil and railroads.

Today, he is CEO of a Wayzata-based company that ships 3.5 percent of North Dakota's oil to East Coast and other refineries in railroad tank cars.

The company, Dakota Plains Holdings, is part of a revival of the old way of shipping crude oil -- via rail -- that last flourished during World War II. And it's another case of North Dakota's oil boom igniting spinoff businesses.

"If the capacity to move oil isn't there by pipeline, the only alternative is to get it out by rail -- or you stop producing oil until the pipelines catch up," Claypool said in an interview.


Claypool, 37, who grew up on a farm in Hampton, Iowa, was living in Minnesota in 2011 when investors in Wayzata and Minneapolis approached him to run their start-up crude-oil-to-rail business. At the time, he was a manager at a networking company and had spent nearly a decade at AT&T.

He was puzzled initially that anyone would ask him -- a farm kid working in the technology industry -- to run an oil business, he said. Then someone explained that the business model "is remarkably similar to a farmers' elevator," he said."...................



http://www.startribune.com/business/187 ... ml?refer=y

I'll echo your disclaimer; I'm not a stock broker nor do I play one on TV. One side of the argument comes to me as a practical solution that uses existing infrastructure to transport oil, then the mini-me on the other shoulder starts asking questions:

1) Oil prices are not really stable and OPEC can pump the price up and down at will.
2) What is the state of our rail system?
3) How much does it cost to transport oil by rail vs. the ROI on a pipeline? Long and short term?
4) If we were doing it during WW II why did we stop?
5) What is the obvious issue that is right in front of me that I missed?

Not trying to be a wet blanket, just trying to have a good hard look at the whole situation before making an investment.

Nebraska just announced a new route for the Keystone pipeline.

otisptoadwater wrote: I'll echo your disclaimer; I'm not a stock broker nor do I play one on TV. One side of the argument comes to me as a practical solution that uses existing infrastructure to transport oil, then the mini-me on the other shoulder starts asking questions:

1) Oil prices are not really stable and OPEC can pump the price up and down at will.
2) What is the state of our rail system?
3) How much does it cost to transport oil by rail vs. the ROI on a pipeline? Long and short term?
4) If we were doing it during WW II why did we stop?
5) What is the obvious issue that is right in front of me that I missed?

Not trying to be a wet blanket, just trying to have a good hard look at the whole situation before making an investment.

As an aside, I was a stock broker for a brief time in 1988. It was as shockingly easy as getting a CCW in Co. Besides my brain has atrophied a lot since then.

1. I do not think OPEC can or dares to let oil get too low. The only ways I see that happen is a world wide depression or a revolutionary break through in energy research.

2. Not as good as it used to be. (See your #4) As I read it, DAKP is just a user and leaser. If they can make $ doing that, how relevant is the RR system?

3. I think long term ROI goes to the pipelines. I think part of the answer to this is not ust which is more profitable but who makes the profit. Buffet is making out. In fact some more conservative than me would stick with Berkshire and other large caps.

5. ? Some of mine are inexperienced management, short corporate history, low float, thinly traded.. Is there insider ownership, are they buying or selling.

I think a wet blanket looking at this is an asset in its evaluation.

Disagree with you about OPEC. To quash alternative energy development and maybe even oil development in the US y

It would behoove them to sell billions of gallons of petrol at a discount for a couple years.

FredHayek wrote: It would behoove them to sell billions of gallons of petrol at a discount for a couple years.

OTOH they need the bucks to keep their masses from revolting. That is what I have heard. I have also heard they support the anti-fracking movement.

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As I was saying upstream:


"Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit. "..........

http://www.bloomberg.com/news/2012-01-2 ... eline.html

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If the pipeline is approved it should be years before it eats into the rail profits which means that DAKP could be a viable speculation. Unfortunately my searches have not come up with much. I did not see any insider excitement which is a big negative for me.