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Investing In The Bakken (July 2011)

I have completed an extensive research in the various operators currently participating in the Williston Basin and still think the Brigham Exploration is the best overall investment option at the present time.  This is based on this companies past track record, their overall drilling strategy and above all, the current stock prices to obtain shares in this company.  This is one solid company with exceptional management and I think that the future will only get better in regards to new production figures and higher stock prices.

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Permalink Reply by Terry Petersen on July 10, 2011 at 10:41am

Charles,

I've been looking at investing in 3 or 4 companies in the Bakken.  I have read all kinds of positive things about Brigham and would like to invest in them.  However running the ratios I find that their PBR is 4.67, they have a fairly high debt to asset ratio, low sales revenue per share, and the ROI is below average.  Other ratio's such as debt to equity, working capital, sales to revenue, and PEG ratio are better than average.  And if I were to buy based on returns, as you say, this company has done very well in the past.

You may be correct on your observations but I guess I'm thinking they might be kind of risky compared to other companies.  (Their BETA is 2.85)

I would like to buy a few shares of Brigham but need to be sold more as to why I can make some money on them.   I will investigate their company management further, but would you still recommend them based on the ratio's above?  Or did you already use ratio's in your research of various operators?

 

Permalink Reply by charles s mallory on July 10, 2011 at 11:44am

Terry:

I am aware of these ratios and the debt for this company.  I also know that this company holds mineral leases in prime areas of the Basin and I feel that they know how to produce these areas to the maximum potential.  I have a friend who is renowned in the oil and gas trading and forecasting business and he informed me that he has also bought stock in this company.  My friends company does extensive evaluations of the various shale plays including the Eagle Ford, Haynesville, Barnett, and Niobrara.  I am no investment guru but I did retire from the oil and gas industry and I like what I see in this particular company.

Terry Petersen said:

Charles,

I've been looking at investing in 3 or 4 companies in the Bakken.  I have read all kinds of positive things about Brigham and would like to invest in them.  However running the ratios I find that their PBR is 4.67, they have a fairly high debt to asset ratio, low sales revenue per share, and the ROI is below average.  Other ratio's such as debt to equity, working capital, sales to revenue, and PEG ratio are better than average.  And if I were to buy based on returns, as you say, this company has done very well in the past.

You may be correct on your observations but I guess I'm thinking they might be kind of risky compared to other companies.  (Their BETA is 2.85)

I would like to buy a few shares of Brigham but need to be sold more as to why I can make some money on them.   I will investigate their company management further, but would you still recommend them based on the ratio's above?  Or did you already use ratio's in your research of various operators?

 

Permalink Reply by Terry Petersen on July 10, 2011 at 12:53pm

Thanks for your response Charles.

I like what you say but I guess I may be overly cautious about investing in Brigham.  I've just got to think it through for myself and get a little more information.  I will probably make up my mind in the next couple of weeks. 

Does anyone else have any opinions on Brigham or any of the other Bakken companies?

Permalink Reply by charles s mallory on July 10, 2011 at 1:02pm

Terry:

You can go to the Million Dollar Way website and read several posts on investing in different companies in the Bakken.  I think there is a new article just posted today.  I don't generally tend to invest in oil companies but I don't see oil values  declining over the next few years.  I decided to invest mainly due to the low price on shares at the present time.

Terry Petersen said:

Thanks for your response Charles.

I like what you say but I guess I may be overly cautious about investing in Brigham.  I've just got to think it through for myself and get a little more information.  I will probably make up my mind in the next couple of weeks. 

Does anyone else have any opinions on Brigham or any of the other Bakken companies?

Permalink Reply by Terry Petersen on July 10, 2011 at 1:33pm

Charles,

 

I agree 100% and I do think the long term trend is up.  That is why I'm taking a look at some of the companies. 

 

Thanks for the info on the Million $ Way.  I will take a look at the article.

Permalink Reply by M A Miller on September 2, 2011 at 11:30pm
Brigham is a sexy pick because of their high IPs and their ability to acquire and exploit in the Bakken, but I am skeptical because they are saddled with high debt.  Although I do agree, as far as Bakken pure plays they are hard to argue against considering their leasing prowess and strong technical staff.  If I were investing based on return, I think I would try and play the ebs and flows of one of the non-ops - NOG or Triangle - b/c of the low overhead business model.
Permalink Reply by Seward Anderson on September 12, 2011 at 8:06pm
You might want to take a look at Continental Resources (CLR).  Harold Hamm is a go- getter. 

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