Bakken Fund goes positive for the year

After being down about 2% in early June, the Bakken Fund has roared back, mostly in the last few trading sessions and now sits at +5.28% for the year. Strong movers include Brigham Exploration (BEXP: N/A N/A), Continental Resources (CLR: 36.92 -1.34%), and Northern Oil & Gas (NOG: 0.7373 -4.7170%) all moving about 5%-15% this week as shown below. Look for another exclusive interview with Bud Brigham of Brigham Exploration in the next day or two! For more info on the Bakken Fund, click here.

BAKKEN FUND 2011 RETURN +5.28%
(Through 6/30/11)
Company Symbol Price 1/1 Price 6/30 Return
Brigham Exploration BEXP 27.24 29.93 9.88%
Continental Resources CLR 58.85 64.91 10.30%
Whiting Oil & Gas WLL 58.6 56.91 -2.88%
Northern Oil & Gas NOG 27.21 22.15 -18.60%
Kodiak Oil & Gas KOG 6.6 5.77 -12.58%
MDU Resources MDU 19.97 22.5 12.67%
EOG Resources EOG 91.13 104.55 14.73%
NewField Exploration NFX 72.11 68.02 -5.67%
GEO Resources GEOI 22.21 22.49 1.26%
Marathon Oil MRO 36.65 52.68 43.74%
Total 5.28%

 

Weekly Roundup: Greece & Oil

We are experiencing a case of deja vu in global economic news this week as oil continues to be volatile in the wake of global economic uncertainty,  with Greece potentially still headed for default (despite a flurry of support measures) and continued lack of consistent buying in equity markets.    Oil has drifted from over $100 to just over $91 with experts expecting a dip to $85.


In Bakken news, many plays have recovered from a tough winter only to be hit with flooding in the region and are struggling to get production back at full capacity. In the last week we have seen the following developments:

  • MDU Resources Group, Inc. (MDU: 27.025 +0.167%) today announced the acquisition of 20,000 additional acres of leaseholds in the Bakken oil play in Richland County, Montana. The company now holds a total of approximately 90,000 net acres of leaseholds in the Bakken. MDU also announced that it is lowering its 2011 oil and natural gas production forecasts as a result of extensive rain and flooding conditions that have hampered operations delaying growth activity in key producing states in the Rocky Mountain region including the Bakken area.
  • Brigham Exploration Co (BEXP: N/A N/A)  reported one of it’s best peak rate at one of its wells in Montana Bakken and it expects more wells in the Williston basin to benefit its third-quarter production, sending its shares up 4% in early Tuesday morning training.  The Gobbs 17-8 #1H well yielded an early 24-hour peak production rate of 1,818 barrels of oil equivalent (boe) in Montana Bakken region.    The development is significant as it solidifies Brigham’s prowess in regions other than the traditional North Dakota Bakken region.  The company expects the number of net wells it has in play to be 40% higher than last year.
  • In a recent interview with Forbes,  Harold Hamm,  CEO of Continental Resources (CLR: 36.92 -1.34%) stated  “We’re going to triple the size of the company within five years,” and believes within five years Continental will likely be pumping 100,000 bpd from the basin and to grow its proved reserves from 400 million barrels to more than 1 billion.

Until next time,  we’ll keep drilling away for more news in the region!

Northern Oil & Gas undervalued



Compared to some of the other Bakken pure plays,  Northern Oil & Gas (NOG: 0.7373 -4.7170%) has had a rough ride in 2011.   The stock is down over 45% from its 52 week high and is still under pressure from a spate of bad news regarding a conflict of interest with the CEO’s wife as well as disappointing earnings due to hedging losses.    At this point, we believe the bad news is priced into the stock and the stock has formed a base around $17.    CapitalOne just upgraded the stock to Strong Buy with a price target of $37 and we saw a strong 7% move yesterday before the broader market declined and dragged all Bakken plays with it.  In looking at the technicals,  NOG has support around $17 which represents the lower Bollinger Band.   The next level of support/resistance is around $22 and we expect NOG to make a move toward this area in the next month.



Week in Review: OPEC behaving badly?

In the last week oil prices have languished as the broader market has declined about 3%.    European debt fears continue to be a drag on the market and the poor job growth numbers recently released have not helped sentiment.        An important OPEC meeting looms on potential production increases.    Certain OPEC members (predominantly the Saudis)  have pushed for a production increase in the belief that demand will rise in the next few months due to US demand.  Other members such as Iran have a much less favorable policy towards the U.S. are more apt to push keep production curbed and to maximize margins (and profit) as the summer driving season in the U.S. begins and demand will likely rise regardless of moderate price increases.     Our Bakken plays have been hit 3-4% on average but are showing signs of consolidation at these levels.  As usual, the Bakken region continues to be a flurry of activity and we highlight some of the happenings below

▲▼ Company name▲▼ Price▲▼ Change▲▼ Chg %▲▼ Mkt Cap▲▼
BEXP Brigham Exploration Co. 27.58 +0.32 1.17% 3.23B
NOG Northern Oil & Gas, Inc. 17.46 +0.43 2.52% 1.10B
CLR Continental Resources,… 60.15 -0.30 -0.50% 10.86B
WLL Whiting Petroleum Corp. 61.30 -0.59 -0.95% 7.19B
OAS Oasis Petroleum Inc. 26.59 +1.05 4.11% 2.46B

 

  • Oil & Gas companies are improving drilling technology in the Bakken region with Brigham Exploration leading the way.   Companies typically drill 2 miles underground and rely on hydraulic fracs with as many as 40 stages using a ball-and-sliding-sleeve system.   In 2010, North Dakota pumped 113 million bbl of oil from the wellhead, almost three times the state’s total in 2006, with most coming from the Bakken region.
  • Northern Oil & Gas (NOG: 0.7373 -4.7170%) participated in the Mustang #1-22H, a successful Bakken test well operated by Slawson Exploration in Mountrail County, North Dakota.  Northern Oil controls a 39.56% working interest in the well, which had an initial production rate of 1,829 barrels of oil per day (“BOPD”).  As of June 6, 2011, Northern Oil currently holds working interests in a total of 413 gross (35.96 net) producing wells and is participating in 139 gross (13.23 net) Bakken or Three Forks wells drilling, awaiting completion or completing.
  • Aux Sable, partly owned by Enbridge Inc , said one of its affiliates has agreed to buy some key assets in the Bakken area of North Dakota from U.S. oil and gas company EOG Resources for $185 million.   Aux Sable and Sable NGL are owned by Veresen Inc , Williams Partners and Enbridge, whose pipelines carry the bulk of Canada’s crude exports to the United States.
  • VAALCO Energy, Inc. (“VAALCO”) (EGY: 0.77 -1.36%) today announced the purchase from a privately held company of a 70% working interest in 5,214 acres in Sheridan County, Montana.  The acreage directly adjoins the Flat Lake Field which successfully produces from the Middle Bakken formation.