Small Oil Companies Making the Best of the Bakken
Despite the fact that the markets have taken a bit of a down turn, this has created a great buying opportunity for investors. Various stocks working in the Bakken which is allowing for better opportunities both for the company and investors. Michael Filloon has found a few companies doing just this.
Abraxas (AXAS) has done a very good job of purchasing acreages in some of the best plays in the United States. Its current properties are:
- Williston Basin (20835 Net Acres)
- Niobrara (17800 Net Acres)
- Eagle Ford (12073 Gross Acres)
- Alberta Basin (10000 Net Acres)
- Pekisko Fairway (9120 Net Acres)
- Texas Oil Plays (8700 Net Acres)
Abraxas estimates it will drill 35 net wells in 2011. Of the $60 million Abraxas plans to spend in cap ex, $25.5 million will be spent in the Williston Basin. Its Williston Basin acres are located in:
- Harding/Rough Rider 7010 net acres
- North Fork/Nesson 3540 net acres
- Carter 3200 net acres
- Sheridan 2340 net acres
- Nesson 2270 net acres
- Elkhorn Ranch/Lewis & Clark 2035 net acres
- Elm Coulee 440 net acres.
Credo Petroleum (CRED) is a play on five resource areas:
- Central Kansas Uplift (150000 gross acres)
- NW Oklahoma (75000 gross acres)
- Southern Oklahoma (10000 gross acres)
- Williston Basin (7000 gross or 6000 net acres)
- Texas Panhandle (3000 gross acres)
Credo has shifted focus to oil and increased production significantly. Its Williston Basin acreage is on the Ft. Berthold Reservation. Although this is a small position of just 6000 net acres, it is just west and south of Parshall Field. Parshall Field has had excellent results and could prove very lucrative for Credo. Credo has decided not to operate these wells, but has been a non-operator in a total of 7 wells this year and expects another nine to be completed before the end of 2011. It working interest has been between 1% to 3%. Credo states it has an average 140 Boepd share to date of initial production. Its Enerplus Ethan Hall reported an IP rate of 3732 Boepd. The majority of wells to be completed this year will have working interests of 12% to 20%. It has managed to change its business from gas to liquids which has provided much needed revenue. I like Credo as an investment, but think Triangle and Abraxas are better investments.
US Energy Corp. (USEG) is a play on the Williston Basin, but it also has other interests. Its businesses are:
- Oil and gas production
- Molybdenum
- Geothermal
- Uranium
- Real Estate
These different businesses are intriguing, but are also very different. Because of this US Energy would be better served to divest and become a pure oil and gas production company. US Energy has been adding to its oil and gas businesses since 2007.
These companies have potential for great growth moving forward. We all know the Bakken is a great shale play to be in, and can be pretty lucrative for energy companies. These stocks could be great, so watch them closely.
Quotes taken from report by Michale Filloon, Read the entire article here.
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