A $5 Energy Play With Plenty Of 'Bakken' Potential

| About: Triangle Petroleum (TPLM)

GMX Resources (GMXR) announced a successful well in the Bakken and also provided an operational update that boosted the stock some 20% earlier last week. This again demonstrates the potential of the huge and expanding production in the Bakken reserves. I own two companies based primarily on their expanding production the Bakken, Warren Resources (NASDAQ:WRES) and Hess (NYSE:HES). Another Bakken that looks very enticing here is Triangle Petroleum Corporation (NYSEMKT:TPLM).

"Triangle Petroleum Corporation engages in the acquisition, exploration, and development of unconventional shale oil resources in the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana." (Business description from Yahoo Finance)

5 reasons TPLM makes for a solid speculative play at $5 a share:

  1. The company has a solid balance sheet with approximately 15% of its market capitalization in net cash.
  2. Earnings are expected to show a steep ramp up in the next few years. The company lost 44 cents a share in FY2011. However, analysts expect TPLM to make 11 cents a share in FY2012 and then explode to 79 cents a share in FY2013.
  3. The stock is cheap at just 11% over book value and 6.5 times FY2013's earnings estimates.
  4. The company has a $300mm credit facility in place. Combined with cash on hand, this allows Tirangle to have an aggressive drilling program to ramp up production until it is cash flow positive.
  5. The nine analysts that cover the stock have a $9 median price target on TPLM and Wunderlich just upgraded the stock to a "buy".

Disclosure: I am long HES, WRES.