Williston Basin Mid-North America Fund Levered To Bakken

By Eric Fox | October 19, 2010 AAA

Investors that want to play the development of the Bakken and other formations in the Williston Basin sometimes find themselves unsure of what stocks to pick. One alternative is the Williston Basin Mid-North America Stock Fund, an open-end mutual fund that invests primarily in stocks exposed to this fast growing basin.

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Origin
The Williston Basin Mid-North America Stock Fund has been around since 1999, but was formerly known as the Integrity Small Cap Growth Fund. The fund is part of the Integrity Viking Fund family, and is advised by Viking Fund Management, LLC.

The fund changed its name and investment strategy in November 2008, and now invests 80% of its assets in companies with exposure to the Williston Basin in Montana, North Dakota and Canada.

The fund can also invest under the 80% rule in companies with oil and gas exposure to other states in the "Mid-North America" region including Arkansas, Colorado, Illinois, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Wisconsin and Wyoming. Although this list might make the fund seem like a regular mutual fund that invests in the overall energy sector, the company's positions show a pronounced tilt toward companies that operate in the Williston Basin and target the Bakken and Three Forks formations in that basin.

Positions
The fund's largest position is in CARBO Ceramics (NYSE:CRR), which was 3.6% of the fund's total assets as of September 30. CARBO Ceramics makes ceramic proppants used in hydraulic fracturing of wells in the Bakken and other unconventional resource basins. The company asserts that ceramic proppant leads to greater production and recovery relative to the use of sand or other types of proppant.

On the exploration and production side, the fund's largest position is Brigham Exploration Company (Nasdaq:BEXP), which is 3.12% of total assets as of September 30. Brigham Exploration Company has been drilling long lateral wells in the Bakken for several years and has some of the most productive wells in the play. Oasis Petroleum (NYSE:OAS), which went public earlier in 2010, is the second largest exploration and production company holding, at 3%.

Other stock holdings that the fund holds that are strongly levered to the Bakken and Williston Basin are Whiting Petroleum Corp. (NYSE:WLL) (2.9%), Continental Resources (NYSE:CLR) (2.5%), Kodiak Oil and Gas (NYSE:KOG) (2.2%), Northern Oil and Gas (NYSE:NOG) (2.3%) and GeoResources (Nasdaq:GEOI) (2.5%). All of these companies have extensive acreage and prospects in the Williston Basin.

Performance
The Williston Basin Mid-North America Stock Fund has a long-term performance record going back more than 10 years, but most of this record is from its original investment strategy as a small cap growth fund.

The fund had a total return of 14.66% in the year ending September 30, and a 7.88% total return in the first three quarters of 2010. This return reflects the sales charge paid by investors.

Bottom Line
The Williston Basin Mid-North America Stock Fund is a way for investors to play the Williston Basin and the rapid development of the Bakken and Three Forks formations by the exploration and production industry. (To learn more about the oil and gas investments, see Investing In Oil And Gas UITs.)

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