Blue Light Special

[dan_s]

There are lots of our favorite stocks "On Sale" today but CLR may be the best of the bunch. According to may forecasts, CLR has more than 30% annual production growth locked in for at least five years. Company guidance for production growth this year is 47% to 50%. IMO the stock is now trading well below break-up value.

Read this:
http://www.forbes.com/sites/energystock ... r=yahootix

During the first quarter all of our favorite Bakken companies had to sell a lot of their oil at a large discount to WTI. The regions supply/demand issue was solved in April and Bakken crude is now trading a narrow discount to WTI. Denbury told me they got a premium to WTI in April after selling a more than a $15/bbl discount in Q1. What this means is that the Bakken companies may surprise the market with strong realized oil prices when they report Q2 results.

[dan_s]

Gulfport is near the top of my list of S-16 that are grossly oversold.

Read this:
http://www.forbes.com/sites/energystock ... r=yahootix

Sweet 16 Growth Portfolio: An updated Net Income and Cash Flow Forecast model has been posted for Gulfport Energy (GPOR) under the Sweet 16 Tab.

Note: There is more detail on the Excel version of our forecast models.

[danross70]

Really tough for me not to go overboard on PBN.TO. Growing, in the Canadian Bakken and the Cardium, dividend pushing 9%, and it is available at less than 2 and one half times Cash Flow. It is not growing as fast as some of the others, but that dividend is a SWEET feature! Looks like it is on sale to me.

[dan_s]

My top intern from Rice University has been assigned Petrominerales, PetroBakken and PetroBank. He is in the Army reserves, so he has two weeks of training first. We should have the profiles and forecasts done by the end of June.

PetroBakken has really improved their balance sheet and the dividend should be secure unless oil prices go a lot lower. All of the Bakken companies should report better than expected Q2 results since the differental on Bakken oil had a sharp improvement in April & May.

I really like what PetroBank has going in the Cardium. Returns are much better there than in their Bakken acreage. Also, check out Vero Energy (VRO). They are getting good Cardium wells and partner on many of them with PetroBakken.

For high yield, look at the preferred stock on EPM and GST. EPM in better shape today but GST should be ramping up production sharply by August. Check out the updated profile for GST under our Sweet 16 Tab.

[dan_s]

My screw-up. I still have some updates to finish on the GST profile. It should be posted on Monday.

The interns are now back from vacation, so we'll be generating a lot of updated and new company profiles this month.

[mrmuileh]

Dan:

Would you say that CLR is your favorite among the Sweet 16 right now. All of them are bargains right now, but if you had to pick one for a combination of capital appreciation without a lot of risk, which one would it be?

Regards,

MrMuileh (Phil)

[dan_s]

Sorry for the delay.

CLR, being a large-cap with 40% to 50% production growth over each of the next two years, would definitely be a safe bet. EOG is another very safe bet.

If you look under the Sweet 16 Tab you can find a spreadsheet that shows my Fair Value estimate and the First Call price target for each stock. EXXI, CRZO, DNR, GPOR, GTE, OAS and WLL all look like "Screaming Buys" at current prices. OAS and WLL are almost pure plays on the Bakken.

I do believe the Bakken companies are going to impress the Wall Street crowd with their production growth and high realized oil prices for Q2. Oil price differentials went up $15-$20 per bbl in April.

I am working on a company profile for KOG right now. It should be posted under the Watch List Tab tomorrow. KOG is a small-cap pure play on the Bakken.