Nothing Like a "Post From The Heart" -- Z-Man on NOG -- SeekingAlpha

One of the better reviews of a Bakken company at SeekingAlpha.com.

I have always appreciated Z Man's analysis of oil companies. This one is perhaps one of his best -- a bit of personality, a bit of fire, a bit of humor.

And a lot of data.

From my perspective, the pure Bakken-play companies are still in growth mode, and quarterly earnings are not as important as a) cash flow; b) total acreage; c) production increase yoy; and, d) proved reserves.

With that in mind, some data points about acreage taken from the linked article and from the NOG press release:

• NOG has 168,000 net acres at end of 2011
• carries cost of those acres at $1,832/acre
• NOG is trading at $9,413 per "straight" acre
• KOG trades at ~ $20,000 per "straight" acre
• NOG, on a 4Q production basis, trades at $5,000/acre
• KOG, on a 4Q production basis, trades at $15,000/acre

The NOG press release can be found at the link for "4Q11 Earnings" at "Earnings Central," at the sidebar at the right.

With regard to proved reserves, NOG's nearly tripled, up 198% yoy. For my purposes: reserves tripled.

Assuming one can stay in business (cash flow), reserves may be the most important datapoint in the oil sector. Tripling one's reserves and keeping average cost/acre well below that of competitors is no mean feat.

I don't hold any NOG. I have in the past, and may in the future, but not anytime soon. This is not an investment site; see disclaimer.