Tuesday, April 16, 2013

For Investors Only. Not Unexpected: Pullback Offers Opportunity -- SeekingAlpha, Mike Filloon

Link here to SeekingAlpha article.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you read here. 

Filloon:
In the Bakken, Triangle may be the cheapest of the small operators I like. It has good core acreage in McKenzie and Williams counties. It has additional upside in Montana that is also prospective the Red River formation. It has had excellent results for that area due to a good well design. The stock dropped over 11% today and is down from a high of $7.91/share. This stock was a good buy below $6, and has now fallen to $5.23/share. I currently own Triangle and added to my position earlier today.
Kodiak finally dropped below $8, and I started a position today. Although Kodiak is a high growth, levered name it is an excellent investment. It is a consistent operator, and has some of the best well results in the Bakken. There are multiple reasons to be bullish this stock. Management has done a very good job of adding very good acreage. It also continues to cut costs and has two 10 well pads in process. This will give a better idea of how good the Three Forks is in Williams and McKenzie counties. Kodiak's stock has value here, but could continue lower over the next few weeks so be prepared to add to the position.
The Niobrara has also been a hot spot in 2013, and today provided a buying opportunity. Bonanza Creek has been one of the best performers in small oil and gas this year. It continues to have great results, and does this with a very low well cost. In 2012, analysts discounted the Niobrara and this has been a mistake. I have a buy on Bonanza Creek at $34. I started a position today, and will continue to add shares if the stock pulls back.
Synergy Resources is also in the Niobrara. It has acreage in Wattenberg Field and the northern D-J Basin. Additional upside is found in its Nebraska acreage. It is prospective the Penn, Cherokee and Mississippi Lime formations.

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