Random Update On Emerald Oil -- Mike Filloon

Contributor over at SeekingAlpha.

Emerald's 4Q13 was difficult, as it ended the year with a big bottom line miss.

This was not surprising, as it has continued to use slickwater fracs, which are more expensive than a standard completion.

The size of the miss is more important. It has been effective from a production standpoint in central to northwest McKenzie County.

We are starting to see more operators discussing the use of this type of completion like Oasis (OAS), but the expense has been an issue for operators. We know northeast McKenzie and southwest Mountrail counties are considered the best Bakken acreage. This does not mean it has the most upside, as we already have a good idea of how these areas will infill. The upside is in downspacing, and added locations in 2014. Emerald's acreage has some of the thickest shale in the Bakken.

Whiting (WLL) is currently testing downspacing this area with more than double what Emerald is. Continental Resources (CLR) is even tighter with respect to its Wahpeton pad. Once proved, northwest McKenzie County could provide more locations per section than anywhere in North Dakota.

Triangle Petroleum (TPLM) also operates in this area, and has had excellent results. It would seem Triangle knew about the geological advantages, and why this area was its focus during the operated Triangle land grab.

If I am correct, the acreage values in this area could go up significantly. This area won't produce the IP rates of northeast McKenzie County, but it could produce significantly more resource.