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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (38957)	8/25/2010 3:12:09 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78464

One of the things I'm trying to do is bet on the Bakken. The Bakken shale and Bakken stocks don't get mentioned much on SI. Maybe that's a sign it's still early. I am convinced a LOT of money is going to be made in buying stocks in this shale. However, I have a lot of issues. 1. I've been convinced of many things in my life, some related to the stock market or stocks, and I found my "convinced" has turned out to be inaccurate or false. I just have been wrong so many, many times. 2. I ask myself, if I am so convinced about the Bakken and thus Bakken stocks, just how much of my portfolios should I commit or am I willing to risk on these stocks? And even more importantly for me (given my age/lifestyle/needs/wants/current overall portfolio size, etc.), I wrestle with what is the point of taking such a risk? Anyway, as I find E&P's that may have Bakken leases I check them all (looked at PETD tonight), find a few that I like, and buy shares. (I reiterate, I'm no expert in evaluating E&P companies, and I'm not saying I buy every E&P Bakken stock solely or even primarily on strict analytical methodology.) ========================================== Okay, if GEOI doesn't seem that cheap to you, of course you skip it and move on to something else. As I mentioned here previously, management - if you believe them - has stated their net asset value is $22/sh. on proved reserves. And the stock price is a bit now above $14. My scribbled notes show that they cost their Bakken land at $1000/acre. The Bakken can be fairly big, and I'm not sure where their land holdings are relative to other E&P Bakken players, but some areas of the Bakken now are being leased for $3000/acre. I acknowledge poor research on my part. And I don't know management's capabilities to deliver performance. For me the stock overall looks attractive though, and it's one I've been buying. ---- I'm partial to Denbury (DNR) because it seems to be a specialist in using its large CO2 reserves for "enhanced oil recovery". I got scared out of some of it in the stock's fall in '08 (still holding shares from '01), and I'm slowly adding back shares. I like it at the current price. You might look at Denbury as a possibility for you. Imo, it's one stock of a decent company with proven performance that could continue be a sturdy performer. And it's also moved into the Bakken. So I'm viewing it very favorably. "Based upon recent drilling results and technical data in the Bakken area, the Company has re-evaluated the potential barrels of oil equivalent recoverable from its approximately 300,000 net acres in the Bakken. Based on these updated internal engineering estimates, the Company projects its total potential recoverable BOEs in the Bakken could be approximately 350 MMBOE, of which approximately 29 MMBOE is considered proved at mid-year 2010..." oilvoice.com DNR may or may not be as good or better a value than GEOI or any other dink one I'm buying; it seems a lot safer to me though. My DNR buys this year have been at $18, $17, $16, and $14.44 last month. I catch it below my last price, I'll add more. Looking here for a five year holding minimum (and some confidence not to get scared out if/as stock drops perilously again). -g-