While the prolific Bakken formation oil fields underlies the US states of Montana and North Dakota along with the Canadian provinces of Saskatchewan, it’s the oil in North Dakota and Saskatchewan that gets much of the attention, but small cap oil stocks like Abraxas Petroleum Corp. (NASDAQ: AXAS), Emerald Oil Inc (NYSEAMEX: EOX), Triangle Petroleum Corporation (NYSEAMEX: TPLM) and Norstra Energy, Inc (OTC: NORX) have not overlooked the oil in Montana. To begin with, North Dakota gets all the attention because the Middle Bakken in that state is thickest – meaning the best production volumes are found there plus the state requires mineral lease holders to explore their acreages within three years. In contrast, the Upper Bakken in Montana has not had the big initial flow rates, but they also decline more slowly and seem to have a better oil-to-gas ratio than Middle Bakken oil wells.
Moreover and according to recent article on OilPrice.com, Montana’s rig count has grown from just 8 near the end of 2011 to 22 near the end of 2012 while the state’s Department of Natural Resources and Conservation issued a record 356 oil drilling permits in the first ten months of 2012 - beating the previous record of 313 set in 2005.
With that in mind, here is a quick look at the small cap activity in the Montana Bakken formation or in the state of Montana in general:
- Abraxas Petroleum Corp. An independent natural gas and crude oil exploitation and production company, Abraxas Petroleum Corp. targets conventional reservoirs, as well as emerging resource plays, in its primary operating areas in the Williston Basin, Eagle Ford Shale/Gulf Coast, Permian Basin, Powder River Basin and in Canada. Abraxas Petroleum Corp. has around 23,000 net acres in the Bakken and around half of that would be in Montana. However, it appears that Abraxas Petroleum Corp. is not active in developing its Montana acreage. On Tuesday, Abraxas Petroleum Corp. rose 1.79% to $2.28 (AXAS has a 52 week trading range of $1.55 to$3.45 a share) for a market cap of $211.43 million plus the stock is down 23.7% over the past year and down 32.9% over the past five years.
- Emerald Oil. An independent exploration and production operator, Emerald Oil is focused on acquiring acreage and developing wells in the Williston Basin of North Dakota and Montana while assets outside of the Williston Basin are being monetized to focus capital deployment to the Williston Basin. Specifically, Emerald Oil has 51,000 net acres in the Williston Basin in North Dakota and Montana while the company’s current focus is in McKenzie County, North Dakota with operable acreage in Dunn County and Williams County, North Dakota and Richland County, Montana that could be developed in the future. On Tuesday, Emerald Oil rose 0.62% to $6.45 (EOX has a 52 week trading range of $3.90 to $18.34 a share) for a market cap of $153.99 million plus the stock is down 61.6% over the past year and down 83.8% over the past five years.
- Triangle Petroleum Corporation. Focused solely on the Bakken oil play in the Williston Basin of North Dakota and Montana, Triangle Petroleum Corporation has acquired approximately 86,000 net acres prospective for the Bakken and Three Forks formations. In North Dakota, Triangle Petroleum Corporation is directing resources toward its operated program to develop its consolidated positions in McKenzie and Williams counties while in Roosevelt County, Montana, the company’s "Station Prospect" is a largely contiguous position of approximately 50,000 net acres with a scalable development area for the future. On Tuesday, Triangle Petroleum Corporation is down 0.64% to $6.23 (TPLM has a 52 week trading range of $4.63 to $7.91 a share) for a market cap of $276.36 million plus the stock is up 1.1% over the past year and up 8% since November 2010.
- Norstra Energy. Small cap Norstra Energy would be an up and coming Bakken play as it has interests in over 10,000 acres of prime Bakken formation land in Montana and is specifically targeting the South Sun River Prospect for a horizontal Bakken well proving the prospect from exploration to production. Norstra Energy has just appointed a third generation geologist from the University of Montana as its CEO. Norstra Energy also recently announced that it has entered into a farm-out agreement with Summit West Oil, LLC, for its South Sun River Bakken Prospect. On Tuesday, Norstra Energy fell 8.16% to $0.45 for a market cap of $36.14 million. Norstra Energy also has a 52 week trading range of $0.35 to $0.58 plus the stock is up 26.8% over the past year.
As players in Montana’s Bakken formation, keep an eye on small cap oil stocks Abraxas Petroleum Corp., Emerald Oil, Triangle Petroleum Corporation and Norstra Energy, Inc as Montana may well become the next North Dakota of oil.