BEXP reported net income for 4Q10 was $13.8 million ($0.12 per diluted share) versus net income of $2.5 million ($0.03 per diluted share) for the same period last year.
BEXP's after-tax earnings in 4Q10 excluding the loss on the early redemption of our Senior Notes due 2014 and unrealized mark-to-market hedging losses were $25.4 million ($0.21 per diluted share) as compared to our after-tax earnings in the fourth quarter 2009 excluding our unrealized mark-to-market hedging losses were $3.8 million ($0.04 per diluted share).
Link here.
Just wondering your thoughts, or if you had heard that Black Rock (blk) has bought 7% of BEXP... there was a mention of a selloff... I have shares and wondering what that all means for the long term...sounded like investors would be forced to sell at some point.
ReplyDeleteI'm the last person you want to ask for investment advice. Smile.
ReplyDeleteI am truly an amateur when it comes to investing. I am conservative with a long time horizon.
I am inappropriately exuberant about the Bakken, so my emotions can get in the way of making good investment decisions.
Having said all that:
1. I had not heard about Black Rock buying BEXP until you wrote (I'm sure you saw that at Bakkenstocks.com.) If accurate, I don't when and what priced BLK bought BEXP.
2. The Bakken companies have all had a great run. I wouldn't buy at this point. I would wait for the inevitable pullback; if there isn't a pullback ... well, we all miss a few.
3. My biggest concern is their newly announced accelerated drilling program. It is very, very expensive to drill these wells. Unless BEXP is at risk of losing leases, I do not understand why they are accelerating their program. I have the same concern with CLR -- 22 rigs and plans to add more. My friends tell me CLR will do just fine, but if not at risk of losing leases, accelerated programs are going to cost them a lot of money.
4. Of the Bakken players, CLR, WLL, BEXP, and maybe NOG, KOG seem to be best bets. But they've all gotten expensive.
5. NOG was just added to the S&P MidCap 400 and has a very unique business plan.
6. I buy/accumulate NOG; I recently started buying KOG. I think CLR and WLL are more conservative "bets" than BEXP.
7. But, I wouldn't rush in right now. They've all had a good run. There should be a pullback. And, if I'm wrong... well, we all miss some, but I would rather miss buying something than buy at the top and watch share price fall.
I'm sure you follow Bakkenstocks.com. That blog seems to be a great source for investment ideas and comments.
Thanks Bruce,
ReplyDeleteWe follow your site daily and respect your insights... we are passionate and excited about the Bakken. My wife's family has land and royalties in Williams County. We plan to hold our investments for the long run as we believe this will be an incredible asset for our country as all of these wells are drilled continue to produce over the next century!
Thank you for the insight into some of the companies that maybe over extending. We are not stock experts either. We have bought a half a dozen of some of the stocks you mentioned... just on the belief that the Bakken play is a winner and will keep rockin'.... Yes, that was the site I saw the Black Rock purchase on...that was it and didn't see anything else.
Been following the Bakken many years...found your site last summer.
Thank you for this site we love it!!!
Thank you for your kind comments.
ReplyDeleteLooking back, it is amazing all that has been written about the Bakken and the story may just be beginning.
For additional insight into BEXP, go to this site:
ReplyDeletehttp://seekingalpha.com/article/255008-brigham-exploration-beats-guides-big-and-accelerates-bakken-development-activity
Zman is very, very good. I enjoy his postings.
If in a hurry, go directly to end of article; his conclusions are almost identical to mine: BEXP's accelerated drilling program carries a risk, but Zman is very, very bullish on BEXP.
Thank you Bruce,
ReplyDeleteI'll check it out. Enjoyed the re-cap of Cramer's comments... Missed his show today.
I am amazed that Jim Cramer missed the Bakken by at least one full year, perhaps two years.
ReplyDeleteThe Bakken has been well reported for two years.
Shoot -- he should have been reading my blog and all the comments that folks have been sending in. Smile.
Maybe I was wrong. Maybe it's okay to buy BEXP at these levels. Smile. I guess it depends on one's entire portfolio, willingness to take risk, etc.
ReplyDeleteIf BEXP has to do a second stock offering to raise more cash to accelerate its drilling program that might offer an entry point.
I still remember the first time someone called in to Cramer about BEXP. It was in 2008 and at the time Cramer was doing a week-long special, "Wildcat Week", dedicated to nat gas (BEXP was around 75-80% nat gas back then).
ReplyDeleteHe seemed to have never heard of BEXP and declined to comment, saying he had to do some homework on them. Then, his "homework" led him to this:
http://www.thestreet.com/story/10421319/2/cramers-mad-money-recap-next-weeks-game-plan.html
http://www.cnbc.com/id/25142149/Brigham_Linn_Explained
Granted, BEXP collapsed soon after this along with the rest of the market, but at the time Cramer was still trying to pump nat gas E&Ps like it was going out of style, yet he didn't think BEXP had "proven" their 3D seismic imaging technology or themselves as a profitable E&P.
Here's a little discussion about it from way back then, if you're curious and bored :)
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_B/threadview?m=te&bn=2138&tid=5963&mid=5963&tof=14&so=E&frt=2#5963
When BEXP started trading at $4, and then $2, I bought as much as I could could afford to at the time. My only regret now is selling off as much of my position as I did last year at $15-16.
You are not alone. I also bought BEXP and then sold it way too soon.
ReplyDeleteUnless one is a trader, I'm beginning to think anything one is holding in the Bakken right now, should be very good as a long term holding.
I'm not sure if I remember Cramer/first call re: BEXP, but it sounds vaguely familiar.
The first link you have might not get you to original page any more (link broken), but this one documents what that link referenced:
http://www.wikinvest.com/stock/Brigham_Exploration_Company_%28BEXP%29.
Re-reading the thread on BEXP/Cramer really does suggest Cramer doesn't understand the Bakken. He's pumped Marcellus for the past two years (natural gas doesn't move) and yet, the Bakken has taken off and it's oil. He must have really missed the Bakken. I think he mentions the Eagle Ford more than he mentions the Bakken, and the Bakken is way ahead of Eagle Ford in terms of development.
The question now is whether BEXP, CLR, WLL, et all are now in a trading range.
There are a dozen different ways to value these companies, but at the end of the day, I think most retail investors (if they understand the Bakken) figure that we will see an average of one TFS and one MB well on each section in the "Bakken." If that's how they are valuing the Bakken, the companies are way undervalued. The trend is moving toward an average of four horizontals on a spacing unit (2 MB and 2 TFS). In addition, there are "no" dry wells in the Bakken; each Bakken well will hold the lease by production for 30 years and there are additional pay zones.
Oh, forgot to say "thank you" to M4570D0N.
ReplyDeleteThank you for a great comment. Kind of fun to go back and see what folks were saying about Jim Cramer back in 2008. Things haven't changed.
No problem.
ReplyDeleteWhich link was broken for you? All 3 links are working for me. The one from The Street or CNBC? The Street article just had this bit at the end of the 2nd page:
"Recently, Cramer was stumped by two lightning round stocks: Linn Energy (LINE_) and Brigham Exploration (BEXP_). After doing the homework on both names, he followed up with his opinions.
Cramer called Linn Energy a pretty good stock. This conservative driller has a large dividend and is at the tail end of a turnaround, he said.
Because of its inconsistent results, he said he'd stay away from Brigham Exploration and wait for a pullback before he'd buyer of this name."
There shouldn't be an issue with the CNBC link, but you could also try removing the last part of the url, shortening it to this:
http://www.cnbc.com/id/25142149/
that should still bring you to the same page. The video clip on that page still works, too. I still love the part where he says they have a better reputation as scientists than wildcats. Cramer makes a fantastic contrarian indicator.
My mistake; they all work.
ReplyDeleteTwo years ago or so, I read almost every back issue of RMOJ for the previous two years, and came up with BEXP and WLL. Interestingly, I was talked out of both by others with negative comments which turned out to be unfounded.
Although I have to admit, the financial issues/cash flow that BEXP had at the time it partnered with USEG required a lot of courage to stick with BEXP.
Thank you for taking the time to comment.
It is fun to go back and look at the charts. On the day Jim Cramer was talking about BEXP (in March, 2008), it was selling in the $15 range. It never rose again in the immediate follow-on period. Right or wrong in his reasoning, it would have been best to avoid BEXP at that time. (Of course, as you implied, it might have been best to avoid the entire market at that time.)
ReplyDeleteBy November, 2008, BEXP had dropped to $2.65. That would have been the pull-back to buy. But even then, that was not the end.
BEXP dropped to $1.25 by March, 2009, just a few months later. It would have taken a courageous person to go "all-in" at that point. By this time, BEXP was in a cash flow problem and either looking for a partner or already partnering with USEG. In November, 2009, the first of six wells came in that was a joint venture with USEG. It was a dicey moment for BEXP (at least from my perspective).
Since then BEXP has been on a meteoric rise and has not looked back.
I consider Cramer just one more data point.
However, there are many talking heads on CNBC who cause me to change the channel as soon as they come on (Robert Reich is one of them).
I have never changed channels when Cramer is on because of something he has said.
On another note, since Cramer spoke so much about the science BEXP used, it would be interesting to hear from folks that understand the technology, whether Oil for America has broken the code.