July 28 - View from Houston

[dan_s]

Hess' takeover bid for Sweet 16 member American Oil & Gas (AEZ) will definitely draw more attention to Bakken players.

There are 17 public E&P companies that hold over 50,000 net acres in the Bakken. There are a lot more that wish they were in the play. The Hess offer gives everyone a valuation point. There is a good chance a competing bid will come forth. Hess is not the only one taking a hard look at AEZ.

The Bakken is now confirmed as the "Real Deal". There has been enough drilling and enough wells on-line long enough so ultimate recoveries can be estimated. 400,000 to 1,000,000 bbls of oil will be recovered from these wells. Let's say it is 500,000 per well. For a well costing $6 Million to drill and complete that is an all in F&D cost of $12/bbl. Not bad!

Now, realizing that these wells come on very strong, the NPV per well is very high.

THIS IS EXACTLY WHY I LOADED THE SWEET 16 UP WITH BAKKEN PLAYERS THIS YEAR.

IMO PetroBank (PBG.TO) may be the most undervalued Bakken Player. Take a look at my forecast model for that one.

Oasis Petroleum (OAS) is the newest Pure Play on the Bakken. I hope to have a special report on it going to our Premium Members this weekend.

The Eagle Ford is the next "BIG DEAL" so do your homework on that one.

Dan