Seeking Alpha: Oasis Petroleum Getting Less Than Its Full Due

As one of the large operators in the Bakken (in terms of leased acres), Oasis Petroleum (NYSE:OAS) certainly isn't immune to the various concerns investors have about the space, including price differentials and the threat that well returns will decline as less promising formations are targeted. Oasis also has to deal with some concerns that are more company-specific like the question of whether their acreage is of lower quality and whether the company will overpay for acquisitions.

Despite these concerns, Oasis has done okay since my last write-up - rising almost 16% while the EPX Index has risen about 11%. On the other hand, when compared to the performance of other Bakken operators like Continental Resources (NYSE:CLR), Whiting (NYSE:WLL), or Triangle Petroleum (NYSEMKT:TPLM) that comparison becomes much less favorable, as these producers have seen their shares rise more than 40% and more than 50% (WLL, TPLM) over that same time period. Although I think there are reasons for Oasis to trade at some discount to these other names, the results over the last half-year or so seem a little extreme and Oasis is starting to look more interesting again on a relative basis.

Follow this link to the full article:
Oasis Petroleum Getting Less Than Its Full Due

Seeking Alpha: Whiting's Buy Shows How The Bakken Is Changing

Whiting Petroleum's (NYSE:WLL) announcement that it had reached an agreement to acquire Kodiak Oil & Gas (NYSE:KOG) was surprising on several levels. First, Whiting isn't offering much of a premium to Kodiak's standalone net asset value. Second, a lot of investors have been assuming (or perhaps hoping) that consolidation in the Bakken would take the form of large energy companies coming in to buy large operators like Continental Resources (NYSE:CLR), Whiting, and Oasis (NYSE:OAS), not peer-to-peer consolidation. Third, this is a deal that is more about execution and efficiency than exploration growth, perhaps marking a recognition of real change.

All told, assuming the deal gets done on the announced terms, it's a good deal for Whiting and not a bad deal for Kodiak. Whereas Whiting has generally gotten good marks for its execution and operating performance (albeit with some concerns about capital efficiency), execution has been a recurrent issue and concern for Kodiak. In buying Kodiak, Whiting has an opportunity to address concerns about its drilling inventory, an opportunity to improve Kodiak's costs, and an opportunity to leverage its newly enlarged position to drive further efficiencies and optimization across a large acreage position.

Read the full article here:
Whiting's Buy Shows How The Bakken Is Changing

Seeking Alpha: Noble Energy Targeting Multiple Growth Plays

Noble Energy (NBL) has delivered below-average adjusted production growth over the last five years and likely will need to take on additional debt to fund its capex plans over the next couple of years. I believe those negatives are more than offset by a strong future production profile based on multiple strong producing assets that should generate solid returns in the coming years. Noble isn't strikingly cheap, but still offers enough upside to merit a closer look.

Read the full article here:
Noble Energy Targeting Multiple Growth Plays

Seeking Alpha: Whiting Petroleum Working On The Second Act

Whiting Petroleum (WLL) has built itself over the years into one of the largest landholders in the Bakken, but instead of giving the company a victory lap, the Street is worried about whether that acreage is now too mature. Not only does Whiting's Williston acreage still have more than a little life left in it, this isn't a one-play story, and the company's potential in the Niobrara is definitely worthwhile. Investors have more than a few good investing options in the oil and gas sector today, but Whiting is worth a closer look.

Continue here:
Whiting Petroleum Working On The Second Act

Seeking Alpha: Oasis Petroleum Offers A Familiar Story In The Bakken

ith concerns about oil prices, wider differentials, and rising costs pushing down many oil and gas developers in high-growth areas like the Bakken and Niobrara, Oasis Petroleum (OAS) isn't exactly a unique situation. Relative to companies like Whiting (WLL) or Continental (CLR) I suppose you could call Oasis a "fast follower", but whatever you call it, the company has more than half a million acres in the Bakken. Oasis's acreage is company-operated to a very significant degree and a significant amount of that property is in the attractive McKenzie County in North Dakota.

Valuation is always an inexact science, and even moreso in the case of oil and gas companies. If you assume that double-digit differentials are temporary and that WTI oil prices won't drop back below $80/barrel, Oasis looks attractive on a NAV basis. Likewise, an EV/EBITDA approach would support the notion that a price in the mid-to-high $50's is reasonable today.

Follow this link for more:
Oasis Petroleum Offers A Familiar Story In The Bakken

Seeking Alpha: A Cleaner, Tighter Abraxas Petroleum Ready For 2014

Some investors get nervous when they see E&P companies selling acreage, but I suspect that may be due to a basic misunderstanding of how oil and gas companies create value. Acreage and reserves are definitely a critical part of long-term production and profit growth, but "acreage at any cost" has to be tempered with profitability and liquidity. I think Abraxas Petroleum (AXAS) has been making a lot of good decisions in 2013, shoring up a once-stretched balance sheet by selling off non-operating acreage in non-core areas and focusing its attention on its Bakken and Eagle Ford properties where the company has been seeing surprisingly good results given the previously assumed quality of the acreage.

Looking into 2014, Abraxas has a cleaner balance sheet and a tighter operating focus. Large acreage positions in areas like the Niobrara and Duvernay give some optionality to long-term development (or sale) plans, while a focused drilling program for 2014 should support the solid execution that the company has been displaying recently. Valuation has me a little cool on this name right now, but I'd definitely keep an eye on it and reconsider if the stock were to pull back to the $3 area.

Please read the full article here:
A Cleaner, Tighter Abraxas Petroleum Ready For 2014

Investopedia: Has Ultra Petroleum Seen The Worst?

Maybe the worst question an investor can ask about a stock or sector is "how much worse can it get?," as the answer is often something along the lines of "a lot." That seems like a relevant point when considering Ultra Petroleum (NYSE:UPL) - a natural gas-focused exploration and production (E&P) company that has long been a top-notch operator, but has suffered from rock-bottom gas prices. It's probably true that higher natural gas prices are inevitable as export-oriented liquefaction facilities come online and more energy consumption is shifted to gas, but that's a multi-year process that still leaves ample room for volatility in these shares.

Please continue here:
http://www.investopedia.com/stock-analysis/2012/Has-Ultra-Petroleum-Seen-The-Worst-UPL-RDS-A-APA-WLL0904.aspx

Investopedia: Triangle Petroleum Almost A Ground-Level Bakken Play

If there are any investors fretting that they have missed the story in the Bakken, a name like Triangle Petroleum (AMEX:TPLM) may be an answer to those worries. While Triangle is still a very risky story, the company is only just starting to develop its acreage in the Bakken region. If Triangle follows the same path carved out by others like Whiting (NYSE:WLL), Continental (NYSE:CLR), Kodiak (NYSE:KOG) and Oasis (NYSE:OAS), investors may be able to look forward to considerable growth in reserves, production, and market valuation over the coming years.

Still (Mostly) A Land Story 
For all of the talk about the Bakken, it's still a new energy-producing region in North America and there is plenty of growth yet to come from the area. While activity in the Bakken is largely dominated by larger, well-established companies for whom the Bakken is just another operating region, Triangle is a different story altogether.

Click here for more:
http://stocks.investopedia.com/stock-analysis/2012/Triangle-Petroleum-Almost-A-Ground-Level-Bakken-Play-TPLM-WLL-CLR-KOG-MRO-STO-EOG0410.aspx

Investopedia: Oasis Petroleum Still Worth A Look

It's pretty much a given that investing in individual exploration and production (E&P) companies is tantamount to buying a ticket for the roller-coaster. While the long-term thesis that oil and gas prices are destined to rise might be directionally correct, the incredible drop in crude oil prices from mid-2008 to the end of the year, and the spike from late 2011 to today, shows that plenty of volatility remains in the meantime.

Oasis Petroleum (NYSE:OAS) is by no means immune to the variability of oil prices, but this growth play in the Bakken could still be worth a look for more aggressive investors.

Read the full article here:
http://stocks.investopedia.com/stock-analysis/2012/Oasis-Petroleum-Still-Worth-A-Look-OAS-CLR-WLL-UNP0402.aspx.

Investopedia: Statoil Buys Into Bakken

By most standards, Norway's Statoil (NYSE:STO) is a quality name in the world of major energy companies. Unfortunately for its shareholders, the company's stock price has been bedeviled by worries regarding the company's production volumes, reserve growth and dependence on Norway's offshore energy fields. With Monday's announcement that the company is acquiring Bakken specialist Brigham Exploration (Nasdaq:BEXP), Statoil management is making a solid argument that the company is not sleeping on opportunities to leverage its balance sheet into solid reserve growth.


The Terms
Statoil and Brigham announced that the companies had reached an agreement whereby Statoil will acquire Brigham for $36.50 per share in cash, for a total enterprise deal value of $4.7 billion. That price translates into a roughly 20% premium to Friday's close.


Read the full piece at Investopedia:
http://stocks.investopedia.com/stock-analysis/2011/Statoil-Buys-Into-Bakken-STO-BEXP-BHP-CHK-WLL-CRED-CLR1018.aspx

Investopedia: Are The Rails Starting To Spin Their Wheels?

Economies don't turn on a dime, so "more of the same" is usually the order of the day. The uncertainty that really become apparent early in the summer is still the dominant theme of the U.S. economy. Given that demand for railroad carriage is a derivative of economic activity, it is not so surprising to see that the trend in rail car traffic has likewise become uncertain. Investors should note, though, that while growth is no longer unequivocal, there are still positive trends at work. 

August Rail Numbers  
In the latest Rail Time Indicators from the Association of American Railroads, August carload traffic in the United States fell 0.3% from the year-ago level and remained flat with the prior month. Intermodal traffic climbed 0.4% and 0.3% for the same time periods. Of the 20 reporting categories of traffic, 12 showed gains in the month of August - consistent with July, but down from 16 in the year-ago period.

Read more:
http://stocks.investopedia.com/stock-analysis/2011/Are-The-Rails-Starting-To-Spin-Their-Wheels-UNP-BRK.A-CSX-NSC-BTU-ACI-CLR0915.aspx

Investopedia: Whiting Petroleum - Right Place, Right Time, Right Type

Everybody watches, talks about and makes predictions about oil prices. And like the weather, the reality of what actually happens often puzzles if not outright embarrasses the experts and their elaborate models. Whiting Petroleum (NYSE:WLL) offers a relatively simple equation for investors - if investors think oil prices will rise, or at least stay consistently high, this is a good stock to own for its production growth and undeveloped resource base. 


A Disappointing First Quarter
Investors may get a chance to buy Whiting shares a little cheaper now after the first quarter, as the Street seems relatively unimpressed with the results. Revenue growth was solid at 23%, but the company's price realizations, production details and exploration costs delivered a below-expectation bottom line result.

Production was mixed in the first quarter, up 10% (on a barrels per day basis) from last year, but down 3% sequentially. Bad weather in North Dakota hurt production, while a higher percentage of natural gas liquids (NGL) impacted the overall price realizations in an unfavorable way. (For more, see Oil And Gas Industry Primer.)

Costs were also higher this time around. Whiting engages in some relatively sophisticated operations with service providers like Baker Hughes (NYSE:BHI) and those technologies don't come for free. Per-barrel cash costs rose about 13%, though depreciation and depletion (DDA) costs were relatively flat on the same basis. 



Read the full piece at Investopedia:
http://stocks.investopedia.com/stock-analysis/2011/Whiting-Petroleum-Right-Place-Right-Time-Right-Type-WLL-CLR-BHI-APA-APC-CRED-BEXP0429.aspx

Investopedia: High Oil Prices Should Make For A Healthy Halliburton

Building models and calculating price targets for energy service companies like Halliburton (NYSE:HAL) almost feels like an exercise in futility. Not only is the business maddeningly inconsistent, but there is only scant evidence that investors pay much attention to valuation. More often, energy services are simply a trading vehicle for attitudes about near-term exploration and production in oil and gas. 

That said, Halliburton is seeing stronger business conditions and with oil prices as high as they are, the near-term outlook for exploration and production should be quite healthy. (For more, see Unearth Profits In Oil Exploration And Production.)

North America Drives the Quarter 

Halliburton delivered strong revenue performance to start the year, driven in large part by momentum in the North American business. Overall revenue jumped 40% from last year and rose more than 2% on a sequential basis. Completion and production saw better than 6% growth (and made up about 60% of total revenue), while the drilling and evaluation segment saw a 3% contraction. North American revenue jumped 13% sequentially, while business in regions like Africa, Europe, Russia, Asia and the Mideast dropped by double-digit amounts.

To continue, click below:
http://stocks.investopedia.com/stock-analysis/2011/High-Oil-Should-Make-For-A-Healthy-Halliburton--HAL-SLB-WFT-SPN-STO-XOM-CLR0419.aspx

Investopedia: Rail Traffic Data Still Largely Good News

Another month has gone by, but the data concerning rail traffic in the U.S. is still positive. That, in turn, is another positive read for the economy overall, as well as industrial and material companies. And of course, let us not forget the rail companies - so long as rail traffic continues to climb, that is a tailwind for the sector as well. 

January's Data Mostly Positive 

For January of 2011, the Association of American Railroads reported that U.S. train carload traffic rose 8% from the year-ago level. The level of traffic seen in January also represented a 1.5% sequential increase from December's levels. Of the 20 categories tracked by the AAR, 15 saw carload growth in the month, with coal (always the biggest commodity for railroads) posting above-average growth of 8.8%. Grain traffic was also notably higher (up 10%), while sand, gravel, and aggregate shipments climbed 16%. The biggest laggards, waste/nonferrous scrap and nonmetallic minerals, were both down by double digits, but represent less than 3% of normal rail traffic anyway. (For more, see Rail Traffic Points To An Ongoing Recovery.)

Investors may want to pay attention to the "mostly positive" part of this news, though. For although U.S. rail traffic was again strong, U.S. intermodal traffic may be softening up. For January, intermodal traffic was up 7.4% on a year-on-year basis and 1.8% on a sequential basis. That is still quite good, but I believe this is the first quarter in quite some time where the year-on-year increase in rail traffic exceeded the increase in intermodal. It may mean nothing at all, or it may be a sign that international trade activity is lightening up a bit.

Also of note is the performance in Canada: Canadian traffic was down in January on an annual (-1.6%) and sequential (-5.9%) basis and although intermodal volumes were positive, they were not terribly strong. Seeing as how a lot of Canada's rail traffic is part of the "stuff trade" - mostly moving commodities to shipyards for export - this is worth watching as it pertains to commodity demand growth. If China and India are cutting down on the coal, lumber and metal they buy from Canada, that would not be positive for Canadian Pacific (NYSE:CPI) or Canadian National (NYSE:CNI), though both also have operators in the United States.

Continue below:
http://stocks.investopedia.com/stock-analysis/2011/Rail-Traffic-Data-Still-Largely-Good-News-CP-CNI-CLR-WLL-UNP-NSC-HUBG0214.aspx

Investopedia: Statoil: Bargain Or Bull Trap?

If investors want to find bargains today in the energy sector, they have to shop in the scratch-and-dent bins. Norway's Statoil (NYSE:STO) is a good example. Concerns about this company's production growth prospects have kept a lid on the stock price as more dynamic companies like Whiting (NYSE:WLL), Brigham Exploration (Nasdaq:BEXP), and Cimarex (NYSE:XEC) have raced by. The question, though, is whether Wall Street has made too much of Statoil's near-term growth woes and whether patient investors might be looking at a bargain in these shares. 

A Poor Quarter amidst Sluggish Expectations
Wall Street was not expecting very much from Statoil in the fourth quarter, but they got even less than that. Of course, "not expecting very much" is a relative judgment - Statoil still produced almost 17% revenue growth and 19% operating profit growth.

Unfortunately, during that same period the company saw a 23% increase in the average price for petroleum liquids and a 17% increase in natural gas prices. What that highlights is that once again production was a significant issue. Total production in the quarter fell more than 5% to about 1.95 billion barrels of oil equivalent per day, with lifted volumes of liquids (more valuable in today's price environment) down 8%. 



The full article can be found at:
http://stocks.investopedia.com/stock-analysis/2011/Statoil-Bargain-Or-Bull-Trap--STO-WLL-XEC-APA-PBR-UPL-COP0211.aspx

Investopedia: Anadarko: A Balanced Player In An Imbalanced Time

It is an ironic part of commodity investing that good times usually work against the best companies. When prices are soaring, those higher realizations paper over a lot of the sins and shortcomings of inferior players and those stocks often outperform those of the companies built to list. To that end, Anadarko Petroleum (NYSE:APC) is a fine company and a very credible candidate for longer term portfolios, but probably does not have the same upside leverage to higher energy prices as other names.

The Quarter That Was
For the fourth quarter of 2010, Anadarko reported that revenue (outside of divestitures) rose about 9%. Growth was helped by both higher production (though production slipped on a sequential basis) and higher price realizations in oil.

Across the board Anadarko saw good cost control this quarter. Although EBITDA rose about 4% as reported, cash cost growth was contained to 2% on a per-barrel basis (coming in at about $7.57/boe). What makes that all the more impressive is that Anadarko operates in some expensive regions; Anadarko is the largest operator in Eagle Ford, for instance. Said differently, in an environment where companies like Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) are seeing good results, it is no small detail that Anadarko is keeping a lid on costs. (For more, see Eagle Ford Shale Midstream Assets Coming.)

The Look Ahead
Although the company did report that it achieved 140% reserve replacement for 2010, the news was not wholly perfect. The company did report that the start of the Caesar-Tonga project is looking like a 2012 or beyond event instead of a 2011 event, and the company continues to wait for greater clarity from the federal government as it pertains to operating in the Gulf of Mexico. 


Please click below for the full article:
http://stocks.investopedia.com/stock-analysis/2011/Anadarko-A-Balanced-Player-In-An-Imbalanced-Time-APC-SLB-HAL-WLL-APA0203.aspx