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Michael Filloon
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Michael Filloon is the head energy analyst at Split Rock Private Trading and wealth management. He is an accomplished and well respected energy analyst covering cyclical sectors including Energy & Commodities. His focus are North American shale plays including the Bakken, Permian Basin and... More
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Split Rock Trading and Wealth Management
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The Bakken Update
  • 17 Stocks to Gain Exposure to Bakken Oil 1 comment
    Jan 17, 2011 11:43 PM | about stocks: CLR, HES, EOG, XOM, WLL, NFX, STO, MRO, DNR, OAS, COP, BTE, NOG, QEP, KOG, SM, SSN
    The Bakken Formation has become a significant source of oil.  It was first analyzed in 1951 by the USGS.  They found the oil in the source rock would not be recoverable, but oil reserves below were.  New techniques opened up formations that have been historically difficult to drill.  In 2008, a USGS report stated recoverable oil in the Bakken ranged from 3 billion to 4.3 billion barrels.  In 1999 they wrote total oil content was from 271 to 503 billion barrels.  This formation covers 200000 square miles.  Elm Coulee Oil Field in Montana is estimated to one day produce 270 million barrels.  EOG Resourses reported a single well they drilled in Parshall, North Dakota is estimated to produce 700000 barrels.  Although most investors know oil producers like Exxon Mobil (NYSE:XOM), some can find it difficult separating which oil exploration and production companies by locale.  The reasoning for this list is to identify what oil drillers are levered to the Bakken Shale.  For convenience sake, I will identify the company by their market cap, and operated rigs running.  Companies are listed in order of acreage owned in the Williston Basin.1. Continental Resources Inc. (NYSE:CLR)-Market cap 10.66B, 21 Rigs2. Hess Corp. (NYSE:HES)-Market cap 26.98B, 15 Rigs3. EOG Resources(NYSE:EOG)-Market cap 25.55B, 12 Rigs4. Exxon Mobile(XOM)-Market Cap 392.51B, 7 Rigs5. Whiting Petroleum(NYSE:WLL)-Market Cap 6.68B, 14 Rigs6. Newfield Exploration(NYSE:NFX)-Market Cap 9.51B, 4 Rigs7. Brigham Exploration(BEXP)-Market Cap 3.31B, 6 rigs8. Marathon Oil(NYSE:MRO)-Market Cap 30.24B, 6 Rigs9. Denbury Resources(NYSE:DNR)-Market Cap 7.66B,  N/A10. Oasis Petroleum(NYSE:OAS)-Market Cap 2.67B, 5 Rigs11. ConocoPhillips(NYSE:COP)-Market Cap 99.5B, N/A12. Baytex Energy(NYSE:BTE)-Market Cap 5.36B, 3 Rigs13. Northern Oil and Gas(NYSEMKT:NOG)-Market Cap 1.41B, Minority Partner14. QEP Resources(NYSE:QEP)-Market Cap 6.72B, 2 Rigs15. Kodiac Oil and Gas(NYSE:KOG)-Market Cap 933M, 2 Rigs16. SM Energy(NYSE:SM)-Market Cap 3.69B, 2 Rigs17. Samson(NYSEMKT:SSN)- Market Cap 140M, 3 RigThere is considerable difference in acres owned by these companies.  Continental Resources owns almost 870000 acres, while Samson (SSN) only owns about 3000.   I did place an N/A by each company that I did not find a rig operating with that company's business listed.  This does not mean that they don't have rigs operating, as they could have a subsidiary corporation that owns the wells.  I also place minority interest by Northern Oil and Gas (NOG).  Northern Oil and Gas(NOG) operates only as a minority partner.  This means the wells they have interest in, another company will operate the rig lowering Northern Oil and Gas' risk. It also is less work intensive and why they can operate a 1.4 billion dollar company with just 8 employees.  In summary, I think most of these companies on the list would be good to own.  There should be plenty of catalysts in the near term to raise stock prices.  Keep an eye on CLR and WLL as Mid-cap picks, and BEXP, OAS, and NOG as Small-cap picks.  SSN is a very small company that is a personal favorite.  I added it to the list even though they are a much larger play on the Niobrara. 

    Disclosure: I am long BEXP, NOG, SSN.Additional disclosure: I will take positions in the names OAS and KOG at any given time
    Themes: energy, oil, bakken Stocks: CLR, HES, EOG, XOM, WLL, NFX, STO, MRO, DNR, OAS, COP, BTE, NOG, QEP, KOG, SM, SSN
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Comments (2)
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  • AKgasman
    , contributor
    Comments (2) | Send Message
     
    If the numbers published today are correct, 74 barrels per well down from 77 barrels per well, then Bakken has already started its per well oil production decline.
    If they would reinject the gas instead of flaring it, the oil production per well would stay higher if not climb and the total oil recovery would double. They would still have the gas when the oil gives out and by then there would be a market for the gas.
    The Time Value of Money trap, but the removal of gas from the oil reservoir shale, flaring or sale, is NOT in the National or ND best interest. The flaring of gas is not allowed in Alaska.
    NDs projected 3 billion or 4 billion barrels of recoverable shale oil that is less than half of the recoverable oil left in just the Alaska Prudhoe Bay resevoir.

     

    Then there are 25 to 30 billion barrels of viscous oil and 25 to 30 billion barrels of heavy oil which BP testified to the legislature as 50% recoverable in 2004
    The exploration by Great Bear of Alaska's oil shale will start this winter if they can obtain a drill rig. Great Bear of Texas said there is more of Alaska's oil shale and it will be more prolific than elsewhere in the US.
    Graet Bear was formed just to drill and produce Alaska's oil shale.
    17 Oct 2011, 05:04 PM Reply Like
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