Abraxas and Net Acres vs Enterprise Value -- Bakken, North Dakota, USA

There's an interesting story in the Bismarck Tribune today regarding a bit of a tussle between Abraxas and Sanjel. I don't know if this is just "business as usual" in the oil patch and the press just happened to pick up on this story and print it, or if it suggests the cash flow problems that smaller companies are having with the high cost of drilling in the Bakken. (Note: the story refers to Sanjel as Denver-based. In fact, Sanjel is Canada-based, but US head office is in Denver.)

Having said that, this gives one a reason to look at the most recent Abraxas corporate presentation.

Looking at that presentation and Yahoo!Financials for Abraxes, I can't add anything to the Bismarck Tribune story referenced above.

However, there is an interesting slide in the Abraxas presentation. If other companies have provided a similar slide, I have missed it. Abraxas has a bar graph comparing the number of net Bakken acres oil companies have vs their enterprise value. I can't reproduce the graph here but here are the numbers (the graph provides much more impact and if any interest at all in investing in the Bakken, you should take a look):

Net Acres in the Bakken/Enterprise Value (EV)

• AEZ: 275 net Bakken acres/$1 million EV
• GEOI: 175 net
• BEXP: 170 net
• KOG: 160 net
• NOG: 150
• CLR: 100
• WLL: 60
• AXAS: 55
• NFX: 48
• SM: 47
• DNR: 46
• EOG: 40
• HES: 39
• MRO: 25
• XTO: 25
• MDU: 23
• STR: 10
• COP: 2

If one is interested in investing in the Bakken, this slide speaks volumes. For example, DNR is being closely watched by someone at Motley Fools. If one feels DNR is undervalued, the first question I asked is what percent of the Bakken contributes to DNR's bottom line. This slide helps answer that question.

Abraxas, on its webpage, says it prides itself in horizontal drilling expertise. It has one rig in the ND Bakken. (I only have data showing one rig; correct me if I'm wrong.) Currently, of some interest, Abraxas is not listed on the "Current Active Drilling Rig List" at the NDIC website (posted January 17, 2011 -- that list hasn't changed for several days now).