Posted by bakken
The theme from previous weeks still prevailed last week with EU debt issues causing some schizophrenia in the market. The Dow lost 300 points over the course of the week and oil lost some ground to about $97 but is still up significantly in the last month. Investors are still in the process of looking for a new favorite (now that Brigham has been acquired) in the Bakken region, there are a number of front runners, and Kodiak (KOG: 8.87 -0.78%) made a move this past week to try to rise to the top. More details listed below:
- On Monday, Kodiak Oil & Gas Corp. (KOG: 8.87 -0.78%) said it has agreed to acquire North Dakota assets for $590 million in cash and stock to expand the energy exploration and development company’s presence in the Williston Basin. Kodiak also said it will offer 37.5 million common shares to fund the transaction and significantly increase its capital expenditures next year. The company also said its board has approved a $585 million capital expenditure budget for 2012, more than double the $230 million for the prior year, allocated to oil and gas activities in the Bakken and Three Forks oil play in the Williston Basin.
- Bloomberg reported that rising crude output in the Bakken shale formation is set to make North Dakota a bigger oil producer than OPEC member Ecuador. “There’s been an amazing jump in North Dakota output,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Massachusetts. “We are looking for output to be anywhere from 700,000 barrels to 1 million barrels a day within five years.”
- Anadarko Petroleum released news on a huge new shale find in Colorado. Approximately 1.5 billion barrels of oil were discovered by Anadarko Petroleum (APC: 89.34 -0.33%) at Colorado’s Niobrara Shale. J Christionsen , an APC spokesman said “Everything you could possibly want in a play — this has it. It’s great news for us and for Colorado because it’s going to generate a lot of activity and investment for a number of years,” The find could inject close to $4 billion in annual revenue for the area, it could sharply reduce U.S. dependence on foreign oil even more.
Until next time, Keep drillin’ in the Bakken!
Posted by bakken
In the January of 2011 we put out a number of predictions related to the Bakken region, let’s see how we are tracking thus far.
PREDICTION #1 – Brigham Exploration (BEXP: 0.00 N/A) gets acquired by a large O&G in the region such as EOG.
>> RIGHT – As most everyone who follows the region knows, Statoil ASA acquired Brigham last month for $36.50 per share. We weren’t at all surprised that BEXP got acquired, but were expecting more of a bidding war for this jewel in the Bakken region.
PREDICTION #2 – PetroBakken goes up 50% in 2011 .
>> WRONG – This prediction has been a huge disappointment for PetroBakken shareholders. Instead of being up 50% the stock is down about 50% since the beginning of the year. They have failed to execute on their growth plan and missed a few earnings estimates and Wall Street has responded negatively. On paper many investors (such as this one) believe it still has some potential.
PREDICTION #3 – Continental Resources (CLR: 83.46 -0.62%) tops $75 per share in 2011 .
>> TBD Continental Resources (CLR: 83.46 -0.62%) came within striking distance of $75 in July hitting $73.48. The market experienced a pullback shortly thereafter and CLR followed suit. It has bounced back in recent days to $67 and there is an outside chance it will hit $75 in the next 2 months… but don’t hold your breath.
PREDICTION #4 – Bakken drilling continues to surpass estimates and will yield record production in 2011
>> RIGHT – By the end of 2010 oil production rates had reached 458,000 barrels per day in the Bakken region. The numbers are obviously not yet complete for 2011, but right now the numbers are tracking to easily beat 2010 numbers. From the North Dakota Industrial Commission (NDIC) Oil & Gas some positive numbers on 2011 development are below:
Aug Oil 13,829,114 barrels = 446,122 barrels/day
Sep Oil 13,923,650 barrels = 464,122 barrels/day (preliminary) (all time high)
Aug Gas 14,349,802 MCF = 462,897 MCF/day
Sep Gas 14,552,239 MCF = 485,075 MCF/day (preliminary) (all time high)
Aug Producing Wells = 5,951
Sep Producing Wells = 6,071 (all time high)
Look for our 2012 Predictions next month!