Bakken strategy

It seems that oil has bottomed and in some strange way may actually turn out to be a flight to quality amidst the financial turmoil that has overwhelmed the markets.   We see that XLE has massive support at 40 and oil is currently rangebound between 30 and 40.     Gas at the pump bottomed around 1.60 and 1.70 and now is climbing back above $2 in many parts of the country.   Our Bakken plays have also been quite rangebound with most in a 10% trading range.    The pure plays are off about 80% from their highs and downside from here is another 20% from current levels unless we enter a full on recession.  I am still content going long WLL or  CLR and selling monthly out of the money calls to hedge my trade.  This way I can earn 5%+ per month regardless of what the stock does by selling these calls.   Of course,  if these stocks are cut in half due to futher deterioration,  it will take a while to get your money back!   Good luck

Symbol Last Trade P/E Pct from Yr High Short Ratio
NOG Feb 26 2.73 N/A Down 83.35% 11.1
WLL Feb 26 23.75 4.00 Down 78.87% 1.6
SM Feb 26 13.46 9.28 Down 79.48% 4
MDU Feb 26 15.16 9.51 Down 57.10% 1.3
GEOI Feb 26 6.19 4.77 Down 78.71% 12.7
BSIC.OB Feb 26 0.61 7.92 Down 79.93% N/A
WSEG.OB Feb 26 0.0330 N/A N/A%
CLR Feb 26 17.31 7.83 Down 79.35% 3.9
BEXP Feb 26 1.33 3.05 Down 92.73% 5.1
KDKN.OB Feb 26 0.37 N/A Down 89.97%
KOG Feb 26 0.2506 N/A Down 95.44% 3
EOG Feb 26 51.41 5.29 Down 64.54% 1.3

Time has passed but nothing has changed

About a month has passed and not much has changed with our Bakken plays.  Oil is still around the $40 per barrel mark and any increase seems to be tempered by the doldrums of the dow which is in a trading range between 7800-8800 over the last month.   Today MDU reported a fourth-quarter loss on Tuesday, partly due to a non-cash charge related to lower energy prices at its natural gas and oil operations. The net loss was $11.4 million, or 6 cents per share.   The stock was off 5% in early trading.   In addition, BP,  a 130 billion dollar oil giant, saw a $3.3 billion dollar loss due to the precipitous drop in oil prices.   If the big players are seeing this bad an effect from falling oil,  we should expect our bakken plays to report losses over the next few weeks as companies report.    We can only hope that these losses are already priced into the shares.  Whiting Petroleum had a share offering that raised about $200 million about a week ago which sent the shares down more than 30% but it may be attractive entry point around $27 as it should have the cash to weather the storm.

Good luck to all!

Edit
Symbol Last Trade Change Volume Avg Vol (3m)
NOG 10:19AM ET 3.04 0.00 0.00% 18,273 226,852
WLL 10:19AM ET 28.450001 Down 0.179998 Down 0.63% 381,272 1,654,570
SM 10:19AM ET 19.27 Up 0.28 Up 1.47% 56,722 900,661
MDU 10:19AM ET 18.82 Down 1.11 Down 5.57% 415,591 1,349,880
GEOI 10:19AM ET 7.39 Up 0.03 Up 0.41% 4,824 76,396.8
BSIC.OB Feb 2 0.91 0.00 0.00% 0 38,635.9
WSEG.OB 10:02AM ET 0.059 Down 0.001 Down 1.67% 9,200 124,269
CLR 10:19AM ET 20.50 Up 0.10 Up 0.49% 138,567 1,525,500
BEXP 10:19AM ET 2.38 Up 0.04 Up 1.71% 155,535 746,571
KDKN.OB 10:09AM ET 0.495 0.00 0.00% 700,500 95,348.4
KOG 10:17AM ET 0.2999 Down 0.0001 Down 0.03% 257,438 690,510
EOG 10:19AM ET 66.91 Up 0.17 Up 0.25% 525,409 4,191,610