Mar
04
Posted by bakkenexpert
For questions on the Bakken Fund, please see our FAQ here
Despite some pressure on oil today, The Bakken Fund continues to roll and outperform the Dow, Nasdaq and pretty much every standard index on the market. We resisted our urge to trade out of some plays last week during some down days, and that proved to be a wise decision. American Oil & Gas (AEZ: 5.64 -4.41%) has really taken off after some positive news earlier this week and is currently holding gains over 30%. Brigham Exploration (BEXP: 17.10 +1.24%) and GeoResources Inc (GEOI: 15.79 +1.35%) also continue to excel with 20% gains. We are a bit cautious in the short term and will look for signals to book gains and reenter at better entry points on some of our positions.
Bakken Fund NAV: $11.31 YTD Return: 13.1%
|
recent returns vs. major indexes |
|
|
|
|
|
Beating |
Today |
MTD |
QTD |
YTD |
| Bakken Fund |
|
-0.50% |
4.52% |
13.10% |
13.10% |
| S&P 500 |
yes |
0.37% |
1.31% |
0.69% |
0.69% |
| DOW |
yes |
0.46% |
0.69% |
-0.30% |
-0.30% |
| Nasdaq |
yes |
0.51% |
1.90% |
0.51% |
0.51% |
|
|
|
|
|
|
| Symbol |
Price |
Shares |
Value |
% of Fund |
Gains |
Today |
Return |
| AEZ |
$5.38 |
23,765 |
$127,855.70 |
11.31% |
$30,476.16 |
-2.00% |
29.98% |
| GEOI |
$14.06 |
8,698 |
$122,293.88 |
10.82% |
$21,103.34 |
2.24% |
20.86% |
| BEXP |
$16.62 |
6,710 |
$111,520.20 |
9.86% |
$20,166.79 |
-2.81% |
20.15% |
| WLL |
$75.74 |
1,390 |
$105,278.60 |
9.31% |
$18,002.01 |
-1.70% |
17.91% |
| SM |
$35.05 |
3,020 |
$105,851.00 |
9.36% |
$12,565.31 |
0.06% |
12.61% |
| KOG |
$2.56 |
15,985 |
$40,921.60 |
3.62% |
$4,166.92 |
0.39% |
11.34% |
| CLR |
$39.84 |
2,540 |
$101,193.60 |
8.95% |
$8,367.60 |
-1.07% |
8.33% |
| NOG |
$13.22 |
8,090 |
$106,949.80 |
9.46% |
$6,826.67 |
0.84% |
6.82% |
| MRO |
$29.58 |
3,395 |
$100,424.10 |
8.88% |
$5,535.46 |
0.37% |
5.51% |
| EOG |
$95.20 |
1,000 |
$95,200.00 |
8.42% |
$4,851.50 |
-0.65% |
4.87% |
|
|
|
|
|
|
|
|
Join the forum discussion on this post - (1) Posts
Related posts
Mar
03
Posted by bakkenexpert
There has been considerable amount of press in the US about the exploits in Montana and North Dakota, but the Canadian Bakken shale has seen substantially less coverage by the US press. Most US investors are aware that the Bakken formation, covers parts of the states of Montana and North Dakota in the USA but over 25% over the entire Bakken formation resides in Saskatchewan province over the border in Canada. Two of the main Canadian players at the moment are Crescent Point Energy Corp (TSX:CPG) and PetroBakken (TSX:PBN) which was formed by an alliance of TriStar Oil and Gas and Petrobank Oil and Resources Ltd. Smaller players include Cenovus, Painted Pony Petroleum & PetroStar. An overview of some of these players are below
Crescent Point Energy (TSX:CPG) Market Cap: 7.5 Billion (CAD)
The expected production figures for Crescent Point Energy is currently in the region of 27,000 BPD oil equivalent comparing to the 24,500 BPD oil equivalent that was reported as being extracted by Crescent towards the end of last year. Crescent Point Energy Corp is one of the larger Bakken plays in Canada with a market capitalization of 7.95 billion dollars (CAD) and an average production in Q3 last year of just over 46,000 BPD oil equivalent for all operations, comprising roughly 88% oil with the remainder being natural gas and natural gas liquids. Crescent Point Energy Corp currently is $39.40 (CAD) at the final bell yesterday. They have a drilling inventory rumoured to comprise of almost 3,000 locations in the Bakken area. In looking at a 6 month chart, the stock should have support around $39 and has been in a narrow $4 trading range over the period.
PetroBakken (TSX: PBN) Market Cap: 4.83 Billion (CAD)
PetroBakken wasn’t far behind in the same period, producing an average of approximately 41,500 BRP oil equivalent from their operations. 94% of this comprised light oil, excluding Alberta production figures where they are planning to sell a majority of their assets. They have also been active on the acquisitions front recently, acquiring Berens Energy Ltd and Result Energy Inc. early this year. Since having a share price of over $35 CAD in October 2009, a couple of months after the formation of the alliance, PetroBakken shares have languished relative to other Bakken plays and currently sit just above $28 CAD per share. PetroBakken have approximately 1,300 wells in the Bakken region and look to have an aggressive acquisition strategy. PetroBakken added a 3rd acquisition this year by acquiring a private west Pembina Cardium play a few days ago. Recent highlights include the following:
- Fourth quarter 2009 average production increased by 105% to 45,621 barrels of oil equivalent per day (“boepd“) from 22,274 boepd.
- Proved plus probable (“2P“) reserves increased by 146% to 143.6 million barrels of oil equivalent (“boe“) at December 31, 2009.
- 2009 working interest production was replaced more than ten times as a result of increases in reserves from operations and acquisitions.
- Net present value (“NPV“) (before tax, discounted at 10%) of 2P reserves increased by 145% to $3.7 billion.
- 2P finding, development and acquisition (“FD&A“) costs, including revisions and future development costs of $32.11 per boe. Excluding net acquisitions, including the TriStar Oil & Gas Ltd. (“TriStar“) acquisition, our 2P finding and development (“F&D“) costs were $30.82 per boe.
- January 2010 production averaged 43,600 boepd, after the disposition in December 2009 of approximately 2,000 boepd.
- We anticipate further dispositions of non-core producing assets in the first quarter of 2010 totalling 3,800 boepd.
- To-date in 2010, we have announced three corporate acquisitions focusing on the Cardium light oil resource play in Alberta. In addition to more than 500 development drilling locations for Cardium, these assets are expected to initially add, in aggregate, approximately 5,800 boepd of production.
- Since July, 2009, PetroBakken has been implementing the use of long bilateral horizontal wells with 51 bilateral horizontal wells now on production. Bilateral horizontal wells have generated on average greater than a 50% increase in productivity compared to offset single leg Bakken horizontal wells.
If we look at a 6 month chart, we see good support at the 200 day MA which the stock has bounced off of twice in the last 3 weeks. The stock has been hit by some selling pressure due to a number of acquisition related expenditures, but this may present a good long term buying opportunity as PetroBakken has poised itself for production growth in the next 3 years.
Cenovus Energy (TSX: CVE.TO) Market Cap: 19 billion CAD
Cenovus Energy Inc (CVE.TO), a traditional oil sands-focused company which spun off from EnCana Corp (ECA.TO), is expanding its business prospected by investing in light oil prospects in Saskatchewan. Cenovus Vice-President Don Swystun said the company is investing in its own lands and acquiring new acreage in the Bakken and Lower Shaunavon unconventional light oil plays in the southern part of the province, something it was unable to do under the EnCana umbrella. Similar to shale natural gas operations, companies drill numerous horizontal wells and fracture rock deep underground to maximize oil output. Cenovus is currently producing about 1,000 barrels a day from eight wells in Lower Shaunavon, Swystun said. It can likely boost that to 3,000-5,000 bpd, depending on how aggressively it decides to drill, he said. In reviewing the 6 month chart for Cenovus, the stock is in a downtrend since the spin-off and is currently testing the 50 day MA. We would stay on the sideline until more definitive plans are released on their Bakken strategy and investment.
Painted Pony Petroleum (TSX:PPY.A) Market Cap: 325 million (CAD)
Painted Pony Petroleum Ltd. (TSX:PPY.A) and (TSX:PPY.B), has a market cap of slightly over 340 million dollars (CAD). In Q4 of last year their average production was just shy of 2000 BPD oil equivalent which was up 70% on the same period in 2008. In 2009, Painted Pony carried out an active horizontal Bakken development drilling program with the drilling of 19 (16.5 net) wells at 98% success. Painted Pony has budgeted to increase its Bakken drilling in 2010, with approximately 30 net wells forecast. In the first quarter of this year, the Company expects to drill 10 (8.8 net) horizontal oil wells in Saskatchewan. The Company has drilled 3 (2.3 net) wells to date, and 2 (2.0 net) wells are currently drilling. Painted Pony expects to have two operated rigs drilling primarily in the Midale and Huntoon development areas for the balance of 2010. A one year chart shows that Painted Pony has had a steady climb over the last 12 months that is commensurate with their increased bopd production. Some back of the napkin math indicates that if they can acheive the same bopd rates on the 30 wells they plan to drill, they should be able to top 5000 bopd by the end of the year and average 3500 bopd throughout 2010. At current rates that equates to about $100 million CAD in 2010 revenue which fairly values the company at its current pps. But similar to a Brigham Exploration, the investment community is expecting growth to continue 30% yoy for the forseeable future. The 6 month chart shows the stock has been in a steady uptrend with consistent support at the 50 day MA.
PetroStar Petroleum (TSX: PEP.V) Market Cap: < 10 Million CAD
Its hard to call PetroStar Petroleum a key player as it is a tiny micro-cap, but we figured we would include as a minuscule bakken play. Petrostar Petroleum Corporation (TSX-Venture: PEP) is a small Canadian-based oil and gas producer focused on production of heavy and medium oil properties and development, implementation and commercialization of enhanced oil recovery systems and processes. Petrostar Petroleum announced recently that work is scheduled to commence on one of the company’s 100% owned P&NG leases that are located in the SE. Saskatchewan extension of the prolific Bakken oil formation. . The extent of this initial work program will be to re-enter and re-complete the A1-26-14-31W located near Moosomin, SK l in order to place the well into production. If Petrostar management can execute on this plan and get the aforementioned well into production, they will most likely be able to raise financing to fund further Bakken ventures. To date the Company has acquired P&NG leases covering some 30 locations, both in the SE Saskatchewan area and in SW Manitoba. The stock is thinly traded on the TSX and is below .10 cents CAD. This is a pure speculation play with no fundamentals to back up any legitimate investment thesis. However, if the company does execute, it could easily be a 5 or 10 bagger. A 6 month chart of PetroStar Petroleum is below but any technical analysis of trends is not relevant with such a thinly traded equity
Summary
The closest thing to a pure-play in the Saskatchewan Bakken Region is currently PetroBakken with a growth strategy focused on both aggressive organic growth as well as growth through acquisition. Their horizontal drilling technology and deployment process appears to be slightly behind American counterparts such as Brigham, but this gap will inevitably close in the next 12-24 months. Expect to see the average bopd increase and a proportional increase in production. I wouldn’t be surprised to see 65,000-70,000 boepd by mid 2011 as they develop their 210,000 acres in the Bakken region.
Drop us a line if there are other Canadian players we should consider profiling
Related posts
