Posted by bakken
Our 2013 picks have gotten off to a great start this year with Oasis (OAS: 38.21 +0.74%) up about 15% since the start of the year and US Silica (SLCA: 22.10 -1.56%) is up 20% since the start of the year. With oil prices steadily creeping up as the market strengthens, Bakken stocks have increased steadily over the last few weeks buoyed with the overall market. In addition, some key developments have occurred in the Bakken region in the past few weeks:
- A new report out this month from the Federal Reserve Bank of Minneapolis indicates that the Bakken oil boom is now five times larger than the area’s oil boom of the 1980′s. Oil production from the Bakken increased 16 % from May thru October of 2012, while the Bakken area now accounts for 11 % of total U.S. oil production (SOURCE: kbzk.com)
- Continental Resources (CLR: 83.98 -0.56%), the top producer and leaseholder in the Bakken said it increased its year end 2012 proved reserves 54% to 785 million bbl of oil equivalent. With the 2012 increase, CLR said, it has grown its proved reserves 45% per year since the end of 2009.
- Enbridge’s (ENB: 46.75 -0.11%) pipeline system has been underused for the past three months as railroads move more oil out of the Bakken shale play, a refining company told U.S. regulators. Enbridge plans to expand its pipeline network out of the Bakken but expects railroads to continue to create a competitive landscape for oil transportation out of the Bakken region.
- Not everyone is so bullish on the Bakken, Arthur Berman has a compelling article on why the Bakken Boom will not last forever. Take a look at it, here
Until next time, Keep drillin’
Tags: CLR ENB enbridge OAS predictions
Posted by bakken
After a stellar set of predictions in 2011, our 2012 predictions were a bit off the mark. However we are confident that we will have a roaring comeback in 2013 and a number of predictions will come to fruition. In 2012 , we saw the vast majority of Bakken producers end the year 15-20% off their highs (most peaked in Feb/March of 2012) but very close to where they started the year in 2012. Effectively most Bakken plays traded sideways throughout the year as oil wallowed between $80-$90 for the better part of the year.
|| 52 WEEK RANGE
||% CHG FROM 52-WK HIGH
||1-YR TRGT PRICE
||P/E NEXT YR
In 2013 however, we do expect a rebound of top tier Bakken stocks but this is largely predicated on the fact that the US economy will have a modest recovery (assuming congress can get past the fiscal cliff issues). Without further ado, our top 3 predictions are below.
- Oasis Petroleum (OAS: 38.21 +0.74%) hits $45 per share in 2013 or gets acquired. - This admittedly is a regurgitation of our 2012 prediction, but we feel strongly that Oasis has quality acreage and production ramp-up that will make it an attractive target. 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.
- US Silica (SLCA: 22.10 -1.56%) hits $25 per share in 2013 – We have outlined this stock a few times and it certainly is a market leader in Silica production in the Bakken Region . The forward PE for this stock continues to be under 8 and has extremely strong cash flow which position it well for growth in 2013.
- The Bakken Region will surpass 28 million barrels of production per month with 6000 producing wells. – The Bakken region is continuing to maintain its growth trajectory with 30%+ year over year growth expected through 2020. Some interesting stats on monthly production can be found at the North Dakota Dept of Mineral Resources site here.
Until next time, keep drilling
Tags: bakken CLR HES KOG OAS predictions SLCA