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Yesterday I profiled a fast growing E&P company that is experiencing rapid and accelerating production growth, EPL Oil & Gas (EPL). I have several positions in these fast-growing energy concerns as I believe we are in the early innings of an energy revolution in this country powered by fracking technology. I also think that these operators will increasingly become acquisition targets as M&A activity is off to its strongest start in years. Finally, takeaway capacity (rail and midstream) is increasing in key areas like the Bakken, which should have helped improve margins as it makes it easier to get this increasing production to refiners throughout the Gulf, Mid-Continent and East Coast.

Today's selection is Triangle Petroleum (TPLM), a small Bakken player. I first profiled this company back in June as a good $5 a share speculative play. The stock has gained 35% since then, and its growth story continues to improve. I believe the shares still have substantial growth ahead of them.

Here are some recent positives for TPLM:

  • Consensus earnings estimates for FY 2014 have gone up some 40% over the last two months.
  • Imperial Capital just reiterated its outperform rating on the shares, noting that "we believe TPLM is well-positioned to develop its core Bakken acreage."
  • In its mid-February production update, the company stated that it exited its fiscal year averaging 3,300 BOE (barrels of oil equivalent). This was at the top end of its previous guidance.
  • The Bakken/WTI spread has narrowed in the last few months, which will help margins going forward.

Triangle Petroleum Corporation develops unconventional shale oil resources in the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana.

Here are four reasons why TPLM is a good growth play at less than $7 a share:

  1. Revenue jumped over 600% in FY 2013 (ended Jan. 31), and analysts have over 200% sales growth penciled in for FY 2014.
  2. The nine analysts who cover the stock have a median price target of $10 a share on TPLM.
  3. Despite its stellar growth rate, the shares sell for just over 10.5x forward earnings.
  4. Given its small market capitalization (under $400 million), prime acreage, and exploding production growth, it would hardly be a surprise to see the company as an acquisition target.
Source: Triangle Petroleum: $7 Bakken Producer Should Have A Huge 2013