Jun
27
Posted by bakkenexpert
Ok, so I’ve been watching this one but haven’t decided to pull the trigger until now. Today Basic Earth Science Systems (BSIC.OB) issued an updated on their Bakken Well. The Paulson 14-9H well had its best day near the end of May when it produced 687 barrels of oil. During May, the well produced approximately 5,400 barrels of oil over 14 days for an average of 387 barrels of oil per day. Currently BSIC is working on stabilizing the flow and at that point the production rates can be better estimated. Basic only has a 1.2469% working interest (0.9975% net revenue interest) in the well which is operated by Marathon Oil Company (MRO) so the revenue impact is not expected to be substantial in my mind. The Paulson 14-9H well was a nice friday tidbit but nothing to put on the refrigerator. The next paragraph is what got my attention:
“In related events, the success of offset wells near our Banks Prospect, a 13,000 acre horizontal Bakken project, has dramatically enhanced the viability of our acreage. As a result, the Company and its partners have been approached by several companies wishing to acquire a portion of Basic’s acreage. While some offers are enticing, at this point, no agreements have been made. If we were to enter into an agreement, in addition to being fairly compensated for our investment and maintaining as much of our interest as possible, our objective would be to increase the effectiveness of the original joint venture agreement so that development could not be stalled by a handful of non-consenting owners.”
I think this is a VERY positive development for BSIC. Typically for a company as small as BSIC, it is difficult to scale operations and fund exploration and production. It appears they are open to divesting some of their prime Bakken acreage for NRI in return as well as compensation for the land. For a company with a tiny 40 million dollar market cap, this could be huge in terms of revenue and profit. A single lucrative deal could propel the company to a low single digit PE.
Disclosure: We own shares of BSIC.OB as of June 27, 2008. View our Disclaimer here
Related posts
Jun
27
Posted by bakkenexpert
The Dow had a disaster of a day yesterday dropping more than 350 points. Oil hit a new record above $140 but the negative vacuum pulled down most of our Bakken plays. All in all however, there was buying amidst the panic selling and the sector was able to avoid an unabated selloff. The last 2-3 sessions where there was panic oil selling, buyers seemed to gravitate towards the sector throughout the course of the day to mitigate any further losses. Today we are mixed with a bias towards the upside on light Friday volume. Our earlier stock picks WLL & EOG are still holding up quite well. NOG has eased a bit, but we are still bullish on the stock.
| Symbol |
Last Trade |
Change |
Volume |
Avg Vol (3m) |
| CLR |
10:20AM ET |
67.08 |
 0.20 |
0.30% |
150,609 |
1,491,270 |
| EOG |
10:20AM ET |
129.33 |
 3.14 |
2.49% |
260,185 |
2,970,220 |
| NOG |
10:20AM ET |
13.72 |
0.63 |
4.39% |
151,218 |
552,992 |
| KOG |
10:20AM ET |
4.15 |
0.02 |
0.48% |
286,727 |
1,403,040 |
| KDKN.OB |
10:02AM ET |
2.57 |
0.03 |
1.15% |
16,268 |
257,676 |
| BSIC.OB |
10:16AM ET |
2.60 |
0.15 |
6.12% |
14,150 |
83,284.9 |
| XTO |
10:21AM ET |
68.42 |
1.28 |
1.91% |
1,346,774 |
6,614,890 |
| MDU |
10:20AM ET |
32.58 |
0.05 |
0.14% |
91,840 |
959,455 |
| WLL |
10:20AM ET |
103.80 |
1.99 |
1.95% |
79,602 |
890,035 |
Related posts
Jun
26
Posted by bakkenexpert
As a followup to our previous post on the growth Bakken related exploration, we see that the North Dakota Petroleum council is trying to market the heck out of the Bakken craze. Below is a T shirt they are touting on their website and they state the demand is overwhelming (Are people really spending $16 + S/H for this). More importantly they outline the growth expected in the region. From their website:
According to a recent study, the petroleum industry in North Dakota needs to hire nearly 12,000 new employees by 2010 to keep pace with the industry’s rapid growth and to replace workers scheduled to retire over the next few years. The industry expects to need an additional 3,300 new workers in 2007 alone to keep up with growth, replacements, and retirements. Industry leaders say this is good news for people looking for a job or a higher paying job in North Dakota. According to Job Service, the average yearly wage in the oil and gas industry in 2005 was $60,330. Jobs in demand include everything from equipment operators and truck drivers, to engineers and geologists. For more information on the need for workers, see the “oil industry jobs” section on this web site.
 |
|
Due to the high demand for the “Bakken Rocks”
T-Shirts, we have decided to extend the deadline for order forms until June 30, 2008.
Click Here to Order |
| Design on Back of Shirt |
|
|
Other notables from the website:
- The state’s only crude oil refinery is at Mandan. It has a daily capacity of about 60,000 barrels.
- Oil was discovered on April 4, 1951 near Tioga in Williams County. That well, the Clarence Iverson #1, produced more than 585,000 barrels of oil over 28 years.
- Prior to the discovery of oil in 1951, 64 wells had been drilled in the state dating back to
1910. Since 1951, another 14,886 wells have been drilled in North Dakota.
- The average crude oil posted price for North Dakota in 2007 was $64.36 per barrel. That
represents $6.53 a barrel increase from the 2006 average.
- The drilling rig count, which is a prime barometer for measuring new oil and gas activity, averaged 43 rigs a day in 2007. The peak year for drilling rigs was 1981, with an average monthly rig count of 119. The alltime high was in October of 1981 with 146 rigs operating.
Based on the limited capacity for refining, it looks as if some major refining or pipeline projects will inevitably have to be undertaken in the next few years around the region.
Related posts
Jun
25
Posted by bakkenexpert
Yesterday and this morning, A number of Bakken Stocks are under quite a bit of pressure as an unexpected jump in the nation’s supplies of fuel and oil reported by the Energy Department fueled speculation that US demand is going to continue to drop and the oil bubble may burst.
In its weekly inventory report, the department’s Energy Information Administration said crude oil supplies rose slightly last week. Analysts surveyed by research firm Platts had expected a 1.7 million barrel decline.
In early morning trading, the XLE ETF is down over $2 and a number of Bakken stocks are facing intense selling pressure with many stocks off 5% or more. The next few weeks for Bakken stocks are going to be extremely volatile and we could see a trading range of 15% on these stocks. We are still bullish long term but are hedging here to mitigate risk. Remember that many of these stocks gapped up in a short time and may need some breathing room over the next few weeks. Investors will need to rely on good E&P news from the Bakken region to provide support.
| Symbol |
Last Trade |
Change |
Volume |
Avg Vol (3m) |
| CLR |
11:15AM ET |
63.89 |
3.35 |
4.98% |
560,824 |
1,468,790 |
| EOG |
11:15AM ET |
125.50 |
4.95 |
3.79% |
824,142 |
2,955,830 |
| NOG |
11:14AM ET |
14.00 |
1.18 |
7.77% |
382,696 |
535,466 |
| KOG |
11:14AM ET |
4.51 |
0.05 |
1.10% |
640,015 |
1,354,010 |
| KDKN.OB |
11:15AM ET |
2.62 |
0.00 |
0.00% |
54,970 |
257,956 |
| BSIC.OB |
11:10AM ET |
2.56 |
0.15 |
5.54% |
78,298 |
80,231.8 |
| LEI |
11:13AM ET |
4.3001 |
0.1499 |
3.37% |
48,355 |
158,489 |
| XTO |
11:15AM ET |
66.17 |
3.92 |
5.59% |
4,004,017 |
6,440,690 |
| WLL |
11:15AM ET |
98.19 |
4.39 |
4.28% |
193,786 |
883,147 |
Related posts
Jun
24
Posted by bakkenexpert
Looking at yesterday’s North Dakota daily permit roundup below and data over the last few weeks, it looks like the activity in MountRail county is really heating up for the big boys including EOG, CLR, WLL & HESS. There is a lot of press lately on how farmers are turning into millionaires and there is an abundance of supporting development in the planning stages for the region. There is some speculation that this area could yield higher per capita incomes than New York, Connecticut and the DC suburbs in the next 10 years. The real winner could be the economy of North Dakota and surrounding regions as the planning for infrastructure (and accompanying jobs) is already speeding up. Earlier this month, wheels were set in motion for a pipeline project to handle the increased output of the region. Enbridge Pipeline is proposing a $120-million project to add more oil from western North Dakota and Eastern Montana as well as an upgrade to 11 pumping stations in North Dakota along an existing pipeline that runs from northwestern North Dakota to Clearbrook, Minnesota. If successful, the project would increase the pipeline capacity by almost 50% to 161,600 barrels a day. It is about time North Dakota had its time to shine in the domestic spotlight.
PERMIT LIST
#17408 - HESS CORPORATION, RS-J NELSON-156-91- 0708H-1, LOT 1 7-156N-91W, MOUNTRAIL CO.,
300′ FNL and 210′ FWL, DEVELOPMENT, ROSS, ‘Tight Hole’, 2307′ Ground, API #33-061-00786,
(Approved: 6/23/2008)
#17409 - EOG RESOURCES, INC., BURKE 21-30H, SESE 30-155N-90W, MOUNTRAIL CO., 200′ FSL and
275′ FEL, DEVELOPMENT, STANLEY, 14913′, 9-5/8 ” - 2030′, 2299′ Ground, API #33-061-00787,
(Approved: 6/23/2008)
#17410 - EOG RESOURCES, INC., BURKE 3-16H, NWNW 16-155N-90W, MOUNTRAIL CO., 400′ FNL and
400′ FWL, EXTENSION, STANLEY, ‘Tight Hole’, 2300′ Ground, API #33-061-00788, (Approved:
6/23/2008)
#17411 - CONTINENTAL RESOURCES, INC., LORIN 1-5H, SESW 5-145N-96W, DUNN CO., 150′ FSL and
1320′ FWL, DEVELOPMENT, JIM CREEK, ‘Tight Hole’, 2552′ Ground, API #33-025-00790,
(Approved: 6/23/2008)
Related posts
