For Investors Only: Bakken Bullishness Leading Commodities Sector
At SeekingAlpha:
In Friday's article we discussed the transaction that Oasis Petroleum completed to drastically scale up their operations in North Dakota's
prolific Bakken shale oil play. We have had numerous emails sent to us,
as well as some comments in much older articles, where readers believe
that our optimistic outlook on these junior E&P names is misplaced.
We would disagree and based on some of the research we did this weekend,
which focused a good bit on the Bakken, we believe that we were
possibly not bullish enough.
Readers may remember our bearishness as it pertained to Magnum Hunter Resources due to their accounting issues. It was a big issue when we wrote about
it with many readers getting upset that we took a
short-term view of the accounting discrepancies. In our experience that
is the only way to play the situation but we did say at the time that
the bearishness had absolutely nothing to do with the company's
properties and everything to do with their accounting. This ties into
the Oasis news because Magnum Hunter announced that they did in fact
participate in the sale of a portion of the acreage to Oasis. Although
Magnum Hunter only came away from the deal with $32.5 million, it was a
small deal on their part, the move does highlight the value of the rest
of their portfolio - and it is our opinion that those holdings would be
much more valuable.
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.