I farm in western MN and decided a couple of years ago that I wanted
to invest in the Bakken as it was too close and too big a story not to
have a piece of in some fashion.
Little did I know that I would fall in love with not only the Bakken,
but also the general oil and gas industry. I enjoy listening to
conference calls and analyst days and so forth. This is not really a
Bakken post but it kind of is.
In mid 2008, I got in a flame war of sorts with somebody on the Yahoo
NOG and BEXP boards over investing philosophy. I still think my
opponent was working for a Soros type hedge fund to drive NOG down and
BEXP up for reasons I won't go into here-this opinion has been
reinforced with other things I learned since. But anyway-
I said I was buying the Bakken "Story". I did not really care what the
numbers were as in my opinion-it was too early for numbers. I wanted
to buy the "Story" before the numbers people got enough information to
feel comfortable. A big part of the story for me was that companies
had a huge learning curve and they should be able to improve
technologically in the future-ie you could not base a lot on the 2008
numbers for things like reserves and so forth.
The company that I most enjoy following and reading about is EOG-I
bought them (for my Dad's IRA) for the Bakken but have followed their
other holdings with great interest.
They have publicly said for the last couple of years that they are
switching their focus from gas to oil and that they are working on
several horizontal oil plays in addition to the Bakken and the Barnett
Combo. However, they would not publicly comment on those plays until
they were ready as they want to lease acreage before any public
I "bought" the EOG story-they are switching to more oil and they have
secret plays maybe comparable to the Bakken, but I don't and can't
know any of the numbers associated with those plays.
Then along comes April 7th and the EOG analyst day-I encourage anyone
here to listen to the Analyst day on the EOG website-it will be there
until May 6th.
EOG makes their big announcement about a couple of their secret plays
and the Eagle Ford shale in south Texas is a doozy-plus they announce
a couple of others as well. Also they give a lot of numbers related to
the Eagle Ford and other plays as well-potential reserves and so
forth, so the numbers people have something to go on and analysts are
upgrading EOG and so forth.
So it has been really fun to watch this-because I bought the EOG
"Story" without any numbers-I got there ahead of the numbers people
and was waiting for them and they are all over the Eagle Ford story
and some other plays ie Spearfish in ND.
Another fun thing to watch is the muted street reaction to another
play that EOG announced that day which is the Niobrara in Colorado and
Wyoming. Their hand got tipped early and they had to announce this
before they wanted to. All they really said is they have a lot of
acreage and that is too early for numbers. Wall Street has really
ignored the Niobrara part of the announcement-In my opinion, they
can't see the Niobrara story-because of no numbers and their focus on
the Eagleford-So if good numbers come out on the Niobrara, once again-
I am there ahead of the numbers people.
The funniest thing of all tho-is the plethora of stories since April
7th from investment media that EOG is becoming an "oilier" company.
Umm, yes-they have been saying they plan to do that for the last
couple of years. So, I because I bought the EOG Story without any
numbers-I got there ahead not only ahead of the "Numbers" people, but
also ahead of the "Story" people-
Because I have followed EOG so closely-I have lost a lot of respect
for the Wall Street analyst types and the investment media-apparently
they need information handed to them on a silver platter.
Suddenly there are
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