Update On The Niobrara For Investors -- Mike Filloon
From SeekingAlpha:
The Niobrara of the DJ Basin gets little press when compared to the
Bakken and Eagle Ford. This play extends from Platte and Goshen counties
in Wyoming to Elbert County in Colorado. I first covered this play in January of 2011, as Samson Oil and Gas made a huge discovery in Goshen County. This turned out to be an excellent trade as it sold this acreage to Chesapeake.
It did not turn out well for Chesapeake, as it has struggled to develop
this acreage. Goshen County is not the top prospect, as Wattenberg
Field in Weld County, Colorado has been the outperformer. This stacked
play is prospective the Niobrara A, Niobrara B, Niobrara C, Codell, and
Greenhorn. The Niobrara B is in full development mode, while the other
source rocks are currently being tested. I will cover this specific
area, and provide reasons to invest in the top small cap operators in
Wattenberg Field.
Bonanza Creek may be the best way to play this area. This was an IPO flop, but made some investors look like geniuses. Bill Costello,
Portfolio Manager/Research Analyst at Westwood Holdings Group has been
on this name, which is up over 100% over the past 12 months. It
currently trades around $37/share, and looks to be headed to $45/share
over the next 12 months. A recent EPS miss
provided a buying opportunity, but the sell-off wasn't warranted as it
reaffirmed annual production guidance. I recommended and bought the
stock on April 16th at $34/share. I sold the position at just below
$40/share. The stock is beginning to look attractive again.
Disclaimer: this is not an investment site. Do not make investment decisions based on anything you read here or anything you thought you read here. I do not follow the Niobrara. I post this information to help me understand the Bakken.
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