Weeky Roundup

The overall market has been on an upswing over the last few trading sessions with oil up almost 12% in the last 3 weeks. Bakken stocks benefited from the recent move and may have gotten a little extra buying with Brigham being acquired by Statoil ASA. The move may trigger some consolidation in the region with a number of other companies such as Continental Resources and Oasis Petroleum looking attractive. We’ll be issuing our top 3 bakken acquisition targets at the end of the week but in the meantime, noodle on the latest happenings in the region:

  • There as been a lot of recent leasing activity in South Dakota and the potential for the Tyler Formation. State geologist Ed Murphy in North Dakota said the formation extends from the western part of that state into northwest South Dakota and may hold up to one-third the volume of oil estimated in the prolific Bakken.
  • As expected,  many investors are looking at the largest owners of acreage in the region with the Brigham acquisition.  Among the biggest U.S. explorers in the formation  are Oasis and Whiting who own the most Bakken shale acreage versus their takeover value, according to data compiled by Bloomberg. On that basis, both control more land than Brigham Exploration.
  • Sunoco (SUN: 30.35 +0.56%) has been receiving quantities of Bakken crude oil from the Mid-Continent to run at its Philadelphia-area refineries, trade sources said on Friday.  Traders said the crude was railed to Albany, New York and then barged down to Philadelphia. One trade source said volumes were between 10,000 and 20,000 barrels per day.
  • The 2nd annual Bakken Infrastructure Summit kicks off this week in Denver.    The summit’s focus will be on the full range of initiatives to develop expanded infrastructure capacity for the Bakken region, including briefings on every major pipeline project currently under development.

Take care until next time!

 

Don’t be surprised to see another bid for Brigham

After yesterday’s news that Statoil ASA was going to acquire Brigham,  the long road for Brigham investors appears  to be nearing an end.     Brigham has 370,000 plus acres in the Williston basin that holds a resource base of 300 million to 500 million barrels of oil. At the acquisition price of $36.50,  the 2012 PE multiple looks to be around 16.    This seems expensive for a traditional and mature O&G producer,  but for a company like Brigham can be viewed as fair value or perhaps even “cheap”.     In terms of a “Bakken Pure Play”,  Brigham is the only game in town that  has significant acreage,  a clear competitive advantage and a market cap under 5 billion dollars.      Brigham has completed 88 consecutive, successful Bakken and Three Forks long lateral, high frac stage completions in North Dakota averaging 2,797 barrels of oil equivalent during the early 24 hours peak flow period.       Brigham often is able to squeeze 20-40% more oil out of every well than their competition… In fact they have copyrighted the slogan “No Oil Left Behind” to stress their ability and acumen to maximize drilling efficiency.   In my opinion,  the perfect suitor would be a be O&G conglomerate that ALREADY has Bakken acreage,  not a overseas O&G firm that is desperately looking for a growth engine.     A company with significant Bakken acreage would be able to apply Brigham’s patented processed and techniques on their own properties and derive more overall value from their own portfolio.   Something that StatOil will not be able to do with the Brigham Exploration.    I wouldn’t be surprised to see a bid in the $39-42 range for Brigham in the next 2 weeks.   That would still put the forward PE at a respectable 18 and be less than a $5 billion acquisition which is effectively in the noise for a larger player.     It seems that Statoil ASA needs Brigham more than Brigham needs Statoil ASA,  we’ll see if I’m right in the coming weeks.

 

 

 

Note:  Please note this is just an opinion and does not constitute investment advice

Alert: Brigham Exploration Acquired – Bittersweet for some investors

As you have probably seen in the news today,  Brigham Exploration (BEXP: N/A N/A) was acquired today.  Statoil ASA  announced the acquisition of Brigham Exploration Co. in a deal that will strengthen the Norwegian O&G’s foothold in the Bakken.  The Norwegian company will buy Brigham for $36.50 a share in an all-cash tender offer, a 36% premium over the average trading price for the last 30 days. The total equity value of the deal is approximately $4.4 billion, with an enterprise value of about $4.7 billion.   It will be interesting to see if Bud Brigham,  CEO of Brigham Exploration stays on in the new venture long term.    For long time Bakken investors,  this acquisition is bittersweet.    Many investors knew BEXP was a solid pure-play and could have seen greater levels in the next few years as it continued to execute on its growth strategies.

We have been bullish on BEXP for a while now, and have mentioned it as a candidate for acquisition a few times.   In our interviews with Bud Brigham in the past,  he always left the door open for an acquisition if it was the right time and in the best interest of the shareholders and it looks like that time has come.

We’ll start digging for the next acquisition target now but this one will be tough to beat.

Active Drilling Rigs – October 2011

Below is the latest Active Drilling Rig report from the ND Bakken Region.   We see that the number of Rigs is up 10% and approaching 200 since our last report 4 months ago.     In comparing the count for the major players below,  we see that with the exception of Brigham Exploration (BEXP: N/A N/A),  the remaining operators have stayed at the same count or increased slightly.   Brigham, on the other hand has really been aggressive in the region growing to 12 rigs and doubling their presence since March of this year.   Happy drilling!

 

 

Rig Operator Well Name and Number
STONEHAM 7 ARSENAL ENERGY USA INC. GJOA LYNN 100-12H
ENSIGN 67 BAYTEX ENERGY USA LTD KNUDSVIG 12-1-160-100H 1PB
NABORS 266 BRIGHAM OIL & GAS LP BRODERSON 30-31 1H
NOMAC 316 BRIGHAM OIL & GAS LP BUGS 27-22 1H
UNIT 106 BRIGHAM OIL & GAS LP HELLING 16-21 #1-H
NABORS 44 BRIGHAM OIL & GAS LP RON 28-33 1H
NABORS 254 BRIGHAM OIL & GAS LP BARSTAD 23-14 #2TFH
NABORS 52 BRIGHAM OIL & GAS LP CLIFFORD BAKKE 26-35 #3H
NABORS 49 BRIGHAM OIL & GAS LP CHARLES 3-10 #1-H
NABORS 558 BRIGHAM OIL & GAS LP ORVILLE 4-9 #2-H
NABORS 460 BRIGHAM OIL & GAS LP KALIL 25-36 2H
NABORS 350 BRIGHAM OIL & GAS LP GATHMAN 30-19 #1-H
NABORS 182 BRIGHAM OIL & GAS LP SJOL 5-8 1H
NABORS 277 BRIGHAM OIL & GAS LP HARVEY 15-22 #1H
SST 58 BTA OIL PRODUCERS LLC 20711 LONG 112 1-H
SST 68 BTA OIL PRODUCERS LLC 20711 STATE 1621 1-H
NABORS 92 BURLINGTON RES O&G CO GORHMAN 24-31MBH
PRECISION 825 BURLINGTON RES O&G CO ELIZABETH STROH 34-7MBH
H & P 446 BURLINGTON RES O&G CO SHENANDOAH 34-36TFH
NABORS 687 BURLINGTON RES O&G CO OUTLAW GAP 34-23TFH
NABORS 59 BURLINGTON RES O&G CO TAYLOR 31-1H
NOMAC 359 CHESAPEAKE OPERATING INC ZENT 30-138-95 A 1H
NOMAC 312 CHESAPEAKE OPERATING INC SCHOCH 21-137-97 A 1H
PRECISION 831 CONTINENTAL RESOURCES CHAMPLAIN 1-36H
PATTERSON 183 CONTINENTAL RESOURCES CHRETIEN 1-31
PRECISION 832 CONTINENTAL RESOURCES MCGINNITY 3-15H
CYCLONE 31 CONTINENTAL RESOURCES LANDBLOM 2-35H
TRINIDAD 36 CONTINENTAL RESOURCES TYLER 1-19H
PATTERSON 455 CONTINENTAL RESOURCES BENNER 1-6H
CYCLONE 28 CONTINENTAL RESOURCES KATE 2-19H
PATTERSON 338 CONTINENTAL RESOURCES THORVALD 2-6H
PATTERSON 180 CONTINENTAL RESOURCES QUALE 1-1H
CYCLONE 9 CONTINENTAL RESOURCES DURHAM 1-2H
CYCLONE 4 CONTINENTAL RESOURCES BERLAIN 1-30H
CYCLONE 22 CONTINENTAL RESOURCES LINBERG 1-24H
CYCLONE 14 CONTINENTAL RESOURCES ANTELOPE 4-23H
CYCLONE 20 CONTINENTAL RESOURCES MIRAMAR 1-32AH
PATTERSON 490 CONTINENTAL RESOURCES MCCOY 4-18H
CYCLONE 10 CONTINENTAL RESOURCES KING 1-5H
CYCLONE 21 CONTINENTAL RESOURCES SPRINGFIELD 1-8H
PATTERSON 515 CONTINENTAL RESOURCES ADDYSON 1-23H
CYCLONE 19 CONTINENTAL RESOURCES TOPEKA 1-1H
CYCLONE 2 CONTINENTAL RESOURCES COVELESKI 1-35H
CYCLONE 25 CONTINENTAL RESOURCES WILHELM 1-21H
CYCLONE 23 CONTINENTAL RESOURCES SACRAMENTO 1-10H
PRECISION 630 CRESCENT PT ENERGY US CPEC JURASIN 32-29-163N-100W
PATTERSON 336 DAKOTA-3 E&P CO DAKOTA-3 RUBIA 16-24H
PRECISION 517 DAKOTA-3 E&P CO DAKOTA-3 SPOTTED HORN 26-35H
PRECISION 96 DAKOTA-3 E&P CO DAKOTA-3 GERALD HALE 33-28H
NABORS 486 DAKOTA-3 E&P CO DAKOTA-3 ARIKARA 15-22H
PRECISION 511 DENBURY ONSHORE BERGEM 44-28NWH
PRECISION 289 DENBURY ONSHORE SERRAHN 41-6SWH
H & P 454 DENBURY ONSHORE STEPANEK 31-17SWH
PATTERSON 301 DENBURY ONSHORE SATTER 24-35SEH
PATTERSON 305 DENBURY ONSHORE ERICKSON 41-25NWH
H & P 448 DENBURY ONSHORE JORE 34-22NWH
DHS 1 DENBURY ONSHORE JOHNSON 31-17SWH
ENSIGN 152 ENERPLUS RES USA CORP SITKA 149-93 06A-3H TF
UNIT 233 ENERPLUS RES USA CORP JALAPENO 148-94 02C-3H
PRECISION 631 ENERPLUS RES USA CORP HILO 148-94 23B-2H TF
ENSIGN 88 ENERPLUS RES USA CORP MAUI 148-94 23A-4H TF
DHS 10 EOG RESOURCES INC KANDIYOHI 21-3427H
TRUE 32 EOG RESOURCES INC VANVILLE 21-2635H
TRUE 33 EOG RESOURCES INC CLARKS CREEK 14-1819H
TRUE 28 EOG RESOURCES INC CLARKS CREEK 16-0706H
DHS 12 EOG RESOURCES INC CLEARWATER 25-3202H
NOMAC 328 EOG RESOURCES INC LIBERTY LR 20-26H
NABORS 527 EOG RESOURCES INC LIBERTY 24-2531H
NABORS 148 EOG RESOURCES INC SHORT PRAIRIE 4-2322H
DHS 9 EOG RESOURCES INC HARDSCRABBLE 8-0409H
MAJOR 45 EOG RESOURCES INC SHORT PRAIRIE 200-13 SWD
NABORS 108 FIDELITY EXPL & PROD CO DINWOODIE 11-14H
NABORS 280 FIDELITY EXPL & PROD CO WANNER 44-23H
STONEHAM 16 G3 OPERATING LLC POECKES 1-32-29H
ENSIGN 71 G3 OPERATING LLC DORIS 1-28-33H
UNIVERSAL DRILLING 1 GADECO, LLC GOLDEN 25-13H
PARAMOUNT 1E GMX RESOURCES FRANK 31-4-1H
PRECISION 604 HELIS OIL & GAS CO. LLC JONES 4-15/22H
PRECISION 18 HELIS OIL & GAS CO. LLC MOBERG 15-22/15H
H & P 295 HESS CORPORATION M ELISABETH 15-1H
H & P 241 HESS CORPORATION MC-STEVE KUDRNA 143-95-2932H-1
MAJOR 41 HESS CORPORATION MC-KUDRNA-144-95- 1522H-1
PRECISION 618 HESS CORPORATION BB-BUDAHN A-150-95- 0403H-1
NABORS B-03 HESS CORPORATION EN-FRETHEIM A-155-93- 3334H-3
NABORS B-05 HESS CORPORATION SABLE 5793 24-35H
NABORS B-04 HESS CORPORATION EN-REHAK A-155-94- 1423H-2
NABORS 2 HESS CORPORATION EN-SORENSON A-154-94- 0211H-2
MAJOR 27 HESS CORPORATION EN-MEIERS B-156-93- 1003H-3
NABORS 1 HESS CORPORATION EN-ROHDE -157-94-3625H-1
PRECISION 620 HESS CORPORATION GENE 8-1H
H & P 293 HESS CORPORATION GO-GOLDEN VALLEY-157-96- 2833H-1
H & P 179 HESS CORPORATION GO-VIALL 156-98-13H-1
H & P 294 HESS CORPORATION BL-DAVIDSON-156-96- 3526H-3
H & P 317 HUNT OIL COMPANY HALLIDAY 2-11-2H
NOMAC 320 HUNT OIL COMPANY STOCKE 1-4-9H 1
FRONTIER 19 HUNT OIL COMPANY PALERMO 2-6-34H
UNIT 109 KODIAK OIL & GAS (USA) INC CHARGING EAGLE 15-14-24-16H
UNIT 117 KODIAK OIL & GAS (USA) INC SKUNK CREEK 2-8-17-14H3
UNIT 123 KODIAK OIL & GAS (USA) INC SMOKEY 16-20-17-2H
UNIT 118 KODIAK OIL & GAS (USA) INC KOALA 2-25-36-16H3
ENSIGN 86 LIBERTY RESOURCES FRITZ 150-101-32-29-1H
H & P 259 MARATHON OIL CO JOYCE REPP 21-17H
H & P 386 MARATHON OIL CO SHERALEE DOLEZAL USA 14-10H
H & P 257 MARATHON OIL CO BEARS GHOST USA 31-4TFH
H & P 392 MARATHON OIL CO GOODBIRD USA 44-7H
H & P 256 MARATHON OIL CO PENNINGTON 31-4TFH
H & P 258 MARATHON OIL CO LUCKY ONE 21-2H
PRECISION 645 MUREX PETROLEUM CORP BRADLEY MARK 35-26H
PRECISION 602 MUREX PETROLEUM CORP ANDREW JAY 5-32H
NABORS 272 NEWFIELD PROD CO BERNICE 150-99-20-17-1H
PATTERSON 335 NEWFIELD PROD CO 1-H HUNTER 17-20
CRAIG 4 NEWFIELD PROD CO VANDEBERG 156-99-26-35-1H
H & P 309 NEWFIELD PROD CO PETERSON 156-99-29-32-1H
ENSIGN 118 NORTH PLAINS ENERGY LLC AMES 15-32-1H
ENSIGN 89 NORTH PLAINS ENERGY LLC OPPEGAARD 9-9H
NABORS 110 OASIS PETRO NO AMER ANTELOPE CREEK FEDERAL 5003 44-17H
NABORS 149 OASIS PETRO NO AMER CHALMERS 5300 31-19H
EXTREME 17 OASIS PETRO NO AMER BRAY 5301 43-12H
NABORS 165 OASIS PETRO NO AMER HERON 5693 43-12H
NABORS 177 OASIS PETRO NO AMER MELVILLE 5601 12-18H
NABORS 169 OASIS PETRO NO AMER HILLSTEAD 5603 13-29H
STONEHAM 18 OASIS PETRO NO AMER O M ERICKSON 5501 42-19H
ENSIGN 153 OXY USA INC REPETOWSKI 1-34-27H-143-98
TRINIDAD E221 OXY USA INC MOGREN 159-90-5-P-1H
TRINIDAD 118 OXY USA INC NORDLOEF 160-90-30P-1H
H & P 255 OXY USA INC JAEGER 1-10-15H-141-96
UNIT 119 OXY USA INC BEATRICE KUBISCHTA 1-15-22H-143-96
H & P 329 OXY USA INC DARLENE DVORAK 1-27-34H-143-95
NABORS 413 OXY USA INC LOUIS SADOWSKY 1-10-3H-142-96
UNIT 120 OXY USA INC LAURA SADOWSKY 1-1-36H-142-96
UNIT 121 OXY USA INC EDWARD POLENSKY 1-13-24H-142-97
UNIT 122 OXY USA INC DVORAK TRUST 1-6-31H-142-96
H & P 325 OXY USA INC EMIL VEVERKA 2-1-20H-143-95
PRECISION 426 OXY USA INC MAURICE HECKER 1-19-18H-142-97
CANELSON 43 PETRO HARVESTER OPERATING WRIGHT 12-10
KEY NRG 370 PETRO HARVESTER OPERATING BALLANTYNE 2-1H
KEY ROCKY 370 PETRO HARVESTER OPERATING J. SWENSON 22-1
H & P 180 PETRO HUNT LLC FORT BERTHOLD 148-94-30A-31-1H
NOMAC 322 PETRO HUNT LLC FORT BERTHOLD 148-94-17D-08-2H
ENSIGN 77 PETRO HUNT LLC FORT BERTHOLD 151-94-34C-27-1H
NOMAC 323 PETRO HUNT LLC OAKLAND 151-103-29B-32-1H
NOMAC 308 PETRO HUNT LLC SORENSON 152-96-24C-13-3H
ENSIGN 46 PETRO HUNT LLC JOHNSON 158-94-14B-23-1H
PATTERSON 491 PETRO HUNT LLC STATE 158-99-25A-36-1H
UNIT 234 PETRO HUNT LLC JOHNSON FAMILY TRUST 157-100-4A-9-1H
ENSIGN 93 PETRO HUNT LLC PANKAKE 157-99-6A-7-1H
ENSIGN 24 PETRO HUNT LLC OSTAD 157-100-2D-1-1
UNIT 108 QEP ENERGY CO MHA 1-32-33H-148-92
SST 66 QEP ENERGY CO MHA 3-06-01H-149-92
UNIT 329 QEP ENERGY CO MHA 5-13-14H-150-91
PIONEER 42 SAMSON RESOURCES CO SONOMA 19-30-161-92HOR
NABORS 455 SAMSON RESOURCES CO SKYLINE 4-9-163-99H
H & P 324 SAMSON RESOURCES CO PHEASANT 14-23-163-96H
H & P 277 SAMSON RESOURCES CO TITAN 36-25-164-99H
PATTERSON 136 SINCLAIR OIL & GAS CO HIGHLAND 2-9H
PATTERSON 167 SLAWSON EXPLORATION KAHUNA 1-7-6H
NABORS 419 SLAWSON EXPLORATION TABOO 1-25-36H
MAJOR 26 SLAWSON EXPLORATION RAVEN 1-13H
CYCLONE 27 SLAWSON EXPLORATION SAUGER FEDERAL 2-22H
CANELSON 41 SLAWSON EXPLORATION SCOUT 1-18-7H
FRONTIER 16 SLAWSON EXPLORATION SPYDER 3-17H
NABORS 152 SM ENERGY CO WOLTER 13-23H
NABORS 476 SM ENERGY CO LEISETH 1-24H
EXTREME 18 SM ENERGY CO HOEHN 2-13H
EXTREME 7 TRIANGLE USA PETROLEUM DWYER 150-101-21-16-1H
TRUE 36 TRUE OIL LLC ANDERSON 41-26 26-35H
CANELSON 42 VECTA OIL & GAS MARK KOK 15-1
NABORS 686 WHITING OIL AND GAS CORP TEDDY 44-2TFH
H & P 276 WHITING OIL AND GAS CORP PRONGHORN FEDERAL 21-13TFH
PIONEER 44 WHITING OIL AND GAS CORP BANNER 44-33TFH
PATTERSON 302 WHITING OIL AND GAS CORP NISTLER 21-25H
NABORS 587 WHITING OIL AND GAS CORP HELLING 31-27H
PRECISION 520 WHITING OIL AND GAS CORP RAMONA TTT 12-25TFH
PRECISION 106 WHITING OIL AND GAS CORP MILLER 43-10TFH
PRECISION 51 WHITING OIL AND GAS CORP CRANE CREEK STATE 11-16TFH
PIONEER 57 WHITING OIL AND GAS CORP LEE 41-28TFH
NABORS 99 WHITING OIL AND GAS CORP CURREN 11-14TFH
PIONEER 66 WHITING OIL AND GAS CORP LAHTI 41-15TFX
PIONEER 67 WHITING OIL AND GAS CORP LAHTI 31-15TFX
PIONEER 56 WHITING OIL AND GAS CORP MARY ELIZABETH 13-13TFX
NABORS 112 WHITING OIL AND GAS CORP KESSEL 41-17TFH
PIONEER 3 WHITING OIL AND GAS CORP OBRIGEWITCH 11-17TFH
H & P 316 WHITING OIL AND GAS CORP FROEHLICH 41-9TFH
PATTERSON 488 WHITING OIL AND GAS CORP MARSH 21-16TFH-R
NABORS 681 XTO ENERGY INC FBIR WALTERPACKSWOLF 31X-12
NABORS 109 XTO ENERGY INC FBIR BEAKS 24X-8
NABORS 265 XTO ENERGY INC STROMME FEDERAL 14X-10
PATTERSON 311 XTO ENERGY INC CRYSTAL 14X-34
H & P 239 XTO ENERGY INC WALTON 43X-19
NABORS 742 XTO ENERGY INC ERICKSON 12X-35
PATTERSON 191 XTO ENERGY INC OLSON STATE 11X-16
PRECISION 512 ZAVANNA LLC CDK 15-22 1H
NABORS 688 ZAVANNA LLC PANTHER 16-21 1H
ENSIGN 76 ZENERGY INC ROLFSON 29-32H
NOMAC 315 ZENERGY INC KELTER 7-6H
NOMAC 327 ZENERGY INC STEPAN 21-28H

 

Weekly Roundup – Continental Still Upbeat

Oil bounced off its short term low last week and is currently a bit below $83. European debt issues are still in the forefront, but the most investors backed off the panic selling we saw a week ago. Similarly, Bakken plays also bounced off their 52 week lows, but most are still down over 40% in 2011. Despite the poor stock performance, there continues to be a number of promising developments for oil & gas companies in the region. The latest are listed below.

  • Oil company Continental Resources (CLR: 30.55 -0.78%)  expects full-year production to be at the high end of its outlook for a 39 percent increase thanks to a strong third-quarter performance.  Continental Resources completed 45 gross operated wells in the Bakken oil field of North Dakota & Montana in the quarter.    This was a 30% increase over the prior quarter.
  • Department of Mineral Resources Director Lynn Helms said Thursday at the North Dakota Association of Oil and Gas Producing Counties annual meeting in Medora.  “We think it is going to go up for the next four years,” Helms said. “There is no real evidence of a slow down in this thing.”    North Dakota was producing 440,000 barrels a day in August, according to Helms. While some counties may not produce as much as others, Helms predicted that North Dakota could produce up to 800,000 barrels a day by the end of 2011.
  • About $3 billion worth of infrastructure projects are on the drawing boards in North Dakota’s Bakken Shale play to monetize the natural gas produced in association with oil, which otherwise would be lost to flaring, operators and state officials said in interviews.   About 134,000 Mcf/d, or almost one third of the gas produced in North Dakota, is flared because of the lack of infrastructure to take the gas away or otherwise monetize it, Bruce Hicks, assistant director of the Oil and Gas Division of the North Dakota Industrial Commission said in an interview Monday.
Company name Price Change Chg % P/E ratio Mkt Cap
BEXP Brigham Exploration Co. 25.70 -0.55 -2.10% 35.62 3.02B
CLR Continental Resources,… 49.88 -0.01 -0.02% 101.35 9.00B
NOG Northern Oil & Gas, Inc. 18.79 -0.37 -1.93% 91.73 1.19B
WLL Whiting Petroleum Corp. 35.54 -1.46 -3.95% 14.74 4.17B