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Northern Oil & Gas: Strong Stock, Modest Price



July 15, 2011 – Comments (0) | RELATED TICKERS: NOG , BEXP.DL , EOG

Northern Oil & Gas is a strong stock pick and can stand side by side with the big companies. However, their stock price is a bit more affordable than some of their counterparts. Why not save some money, and make some money? Steve Zachritz describes NOG’s approach and and describes some of their current operations.


"NOG buys only a few high quality acres (at high cost) while taking in many more acres of what some refer to as goat pasture. If that were the case, then they would only have a few good wells to talk about, right? So I took it upon myself to do a little well study to see if NOG was in fact drilling a handful of good wells and a plethora of poor ones. In short, this is not the case. NOG’s short lateral core wells (drilled by Slawson) routinely stack up well against Brigham Exploration Company’s (BEXP) core area long lateral, much higher cost wells.

Since Northern is a non-operator, I looked at wells drilled by their biggest operators [Slawson, EOG Resources (EOG), Continental Resources (CLR), Hess (HES), Marathon Oil (MRO), etc.] in which NOG has a working interest. I looked at as much monthly data as is currently available from the North Dakota Industrial Commission (NDIC) and in the end viewed data on over 85 wells."


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