For Investors Only: Motley Fool On Triangle Petroleum

Link here.

Disclaimer: this is not an investment site. This is not a recommendation to buy, sell, or hold shares in any company mentioned here or at the link.

On a regular basis, I check Yahoo!Finance headlines for CLR, WLL, OAS, and KOG, because these four of the better known/followed companies in the Bakken (BEXP, is no longer there, as a stand-alone ticker symbol).

For WLL headlines (or maybe CLR headlines, I forget), there was a Motley Fool headline story for Triangle Petroleum.

I don't think one can find a much smaller publicly traded Bakken play (market cap: $225 million) except perhaps for some "penny" stocks on the OTC market. So, that fact alone, that Motley Fool would even find it, is very, very interesting.

Motley Fool is positive about the company (see the linked article). There are three important points that need to be emphasized. Motley Fool address one point but (unless I missed them) did not address the other two points.

Motley Fool did seem to suggest that one well can have a significant affect on a small company. Of course, the same is true of a bad well. In the old days there was a fair chance of a dry well. There are "no" dry wells in the Bakken. The downside risk for a dry well is pretty low in the Bakken.

Now, the two points that Motley Fool did not mention.

First, location, location, location. Triangle Petroleum does not have many acres in the Bakken, but from what I can tell (based on where they have permits), their acreage is among the best in the Bakken. It appears they are in north-central and northeastern McKenzie County; the latter I consider the bull's eye of the Bakken.

Second, constraints. There are two major constraints in the Bakken: takeaway and fracking.

I can't comment much on takeaway in this area, but it's my hunch this area is as good as any has having takeaway infrastructure in place. Even if their oil has to be trucked out, it's not far to pipeline or rail terminals.

Of the two constraints, I consider fracking the much bigger constraint. The smaller companies are at the back of the queue arranging for/waiting for fracking spreads. (Remember the recent post from a reader regarding a Chesapeake well? The fracking team said they may not hang around for the next Chesapeake well -- or something to that effect; fracking teams are hard to come by -- almost a direct quote.)

So, Triangle Petroleum -- smallest of the small Bakken players. They must be at the end of the fracking queue. Hardly. They have their own in-house fracking spread. Not only that, it has been suggested that the team not only can keep up (for now) with its own wells, but can also frack other wells, generating another revenue stream.

Triangle schedules 7 days for a frack. They are completing/fracking a well in three (3) days in some cases. 

So, again, for investors, if Motley Fool likes this company and did not address location or constraints, this is a bit more data to consider.