2012 Top Bakken Stock Predictions

Yes, I do realize it is already March,  but it is never too late to make some bold 2012 predictions related to the Bakken region.    For our 2011 predictions, we were pretty spot 0n with the exception of PetroBakken (and even that dog of a stock has been on a tear for the last 2 months).    Without further delay,  lets get to the list.

2012 Predictions

1. Oasis Petroleum (OAS: 8.59 -0.92%)  hits $45 per share in 2012 or gets acquired. With Brigham Exploration acquired in 2011,  Bakken Investors are bracing for the next takeover of a major Bakken player.   With the exception of maybe 1-2 other O&G companies in the region,  Oasis is one of the closest things to a Bakken “pure play” stock.   For more detailed analysis on OAS, see our latest in-depth article on the company.

2. Kodiak Oil & Gas goes up by 50% in 2012. At just under $10,  Kodiak (KOG: N/A +0%)  is primed for solid growth over the next 3 quarters. Between mid-October 2011 and January 2012, Kodiak completed 8 gross operated wells, with the initial 24-hour production test averaging over 1600 BOE per day.   The company ended January with a production rate of about 15,000 Boe/d — up from 10,100 Boe/d at the end of 2011. That’s nearly a 50% production hike in about a month.   With the current ramp rate,  we expect KOG to surpass 20,000 Boe/d by Mid 2012.

3.  PetroBakken (PBKEF: N/A N/A) will turn the corner and end the year above $25. We were wrong in our 2011 prediction that PetroBakken would double,  but PetroBakken started ramping up production in Q4 of 2011 and has seen a run going from single digits to its current level around $16.    There is some thought that the parent company of PetroBakken,  PetroBank will spin off the company in 2012 to allow for accelerated growth and drilling in the Bakken region.     Recent highlights are below:

  • December 2011 production averaged 50,250 barrels of oil equivalent per day (“boepd”), exceeding  exit production guidance estimates and setting a new corporate benchmark. This is an 18% increase over December 2010.
  • Fourth quarter production was 48,007 boepd (87% light oil and liquids weighted), a 23% increase over the third quarter of 2011.
  • Operating netback for the fourth quarter was $59.21/boe, an 18% increase over the third quarter of 2011.
    Record fourth quarter funds flow from operations was $231 million ($1.24 per basic share), a 52% increase over the third quarter of 2011.
  • Proved plus probable (“2P”) reserves increased by 19% to 203.5 million barrels of oil equivalent (“MMboe”) at December 31, 2011, replacing 2011 production by 315%.

We will check back mid year to see how are predictions are doing.    Hopefully we can match our performance in 2011!