2012 Top Bakken Stock Predictions

Posted by bakken

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: 26.35 +6.81%)  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: 8.57 +8.07%)  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: 0.00 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!

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Weeky Roundup

Posted by bakken

The overall market has been on an upswing over the last few trading sessions with oil up almost 12% in the last 3 weeks. Bakken stocks benefited from the recent move and may have gotten a little extra buying with Brigham being acquired by Statoil ASA. The move may trigger some consolidation in the region with a number of other companies such as Continental Resources and Oasis Petroleum looking attractive. We’ll be issuing our top 3 bakken acquisition targets at the end of the week but in the meantime, noodle on the latest happenings in the region:

• There as been a lot of recent leasing activity in South Dakota and the potential for the Tyler Formation. State geologist Ed Murphy in North Dakota said the formation extends from the western part of that state into northwest South Dakota and may hold up to one-third the volume of oil estimated in the prolific Bakken.
• As expected,  many investors are looking at the largest owners of acreage in the region with the Brigham acquisition.  Among the biggest U.S. explorers in the formation  are Oasis and Whiting who own the most Bakken shale acreage versus their takeover value, according to data compiled by Bloomberg. On that basis, both control more land than Brigham Exploration.
• Sunoco (SUN: 48.11 +2.65%) has been receiving quantities of Bakken crude oil from the Mid-Continent to run at its Philadelphia-area refineries, trade sources said on Friday.  Traders said the crude was railed to Albany, New York and then barged down to Philadelphia. One trade source said volumes were between 10,000 and 20,000 barrels per day.
• The 2nd annual Bakken Infrastructure Summit kicks off this week in Denver.    The summit’s focus will be on the full range of initiatives to develop expanded infrastructure capacity for the Bakken region, including briefings on every major pipeline project currently under development.

Take care until next time!

 

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