Energy Prospectus

NEW YORK (MarketWatch) -- QEP Resources Inc. , which has set plans to buy acreage in the Bakken shale of North Dakota for $1.4 billion in cash from Black Hills Corp. and Unit Corp. , is paying a rich valuation that bodes well for other players in the region, analyst Gabriele Sorbara of Imperial Capital said in a note to clients on Friday. "This acquisition is a positive read-through to the pure play Bakken players, which we believe are takeout candidates," Sorbara said. Oasis Petroleum and Triangle Petroleum appear to be among the most attractive candidates for a buyout deal, Sorbara said.

I also think KOG is a takeover target.

Details on the deal.
http://seekingalpha.com/article/826291- ... urce=yahoo

This what troubles me about OAS...

Net cash provided by operating activities $171,860 for 6 months ended June 31

yet CAPEX was $530M...

how does this continue? What am I missing?

From the profile: "Oasis has more than enough liquidity and growing cash flow from operations to fund its growth. On June 30, 2012, Oasis had $238 mm of cash and cash equivalent, and had no outstanding debt under their $500 million revolving credit facility."

I have no problem with an E&P using debt when the value of the assets is going up 3X to 4X faster.

An E&P's Value = Current Assets + Present Value of Proven Reserves + Value of Undeveloped Acreage (which is at least $10,000 per acre in the Bakken) - Debt.

OAS is going to have a very impressive reserve report at year-end. The banks will gladly fund their growth.

BTW this is exactly what BEXP did and look how things worked out for their shareholders. This rapid growth and the fact they have de-risked a high percentage of their acreage is what makes OAS a "Prime Takeover Target". It is a Pure Play on the Bakken / Three Forks and a long list of majors (sitting on lots of cash) would love to get into the Bakken.