Philip Meyer

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    • Tue Feb 26th 15:16 PM | Rating: 0 0
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      5 Oil Stocks You Want to Know - Barron's
      In trying to capture what the Bakken shale play can mean to Brigham Exploration (BEXP) I am reminded of the little boy who was found madly digging into a pile of horse manure. Asked what he was doing the little boy said "With all this horse ---- there's bound to be a pony some place around here". Suffice to say, Brigham has the potential to find a lot of ponies given its steadily increasing Bakken position, now totally over 200,000 net acres. Relative to share price, Brigham's Bakken exposure is potentially staggering. Conservatively, the company's position should lead to a doubling of reserves over the next two years. Longer term, its Bakken exposure has the potential to increase reserves an order of magniture or more if Leigh Price's resource assessment of the "Bakken Source System" proves as reasonable as it is exhaustive" (a). Using Price's low-end estimate of 271 billion barrels of Bakken oil-in-place and a 10% recovery factor , Brigham's position could generate some 11 barrels of reserves per share. This jumps to 20 barrels per share using using Price's high-end estimate of 503 billion barrels of oil-in-place. Increasing the recovery factor to 20%, not unrealistic over time given the learning curve improvements typical of resource plays, reserves could again double to 40 barrels per share. Assuredly, there will be slips between the lip and the cup, as has already been the case. On the other hand, given the enormous size of the cup there is a huge margin for error.
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