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.

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