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Small-Cap Niobrara Players To Watch In 2012
The Niobrara is one of the many promising oil and gas formations in the United States and has seen a surge of interest from the exploration and production industry. Many of these operators are looking for new plays to help increase oil and liquids development. (To know more about oil and gas, read Oil And Gas Industry Primer.)
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Large-Cap Players
Most investors are familiar with the large-cap players active in the Niobrara, including EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Noble Energy (NYSE:NBL). A number of small-cap operators also are active in this play, most of which are just starting exploration of the Niobrara.
Small-Cap Players
GMX Resources (NYSE:GMXR) is shifting away from natural gas development and has set a goal of having 40-50% of its production from oil by the fourth quarter of 2012. GMX Resources has approximately 41,000 net acres under lease in the Niobrara, and the company has selected this play to help achieve this goal.
GMX Resources just completed a horizontal well on its acreage and plans to drill a vertical well here in early 2012. The company will also begin a seismic survey of its Wyoming properties during Q1 2012.
Petroleum Development (Nasdaq:PETD) has exposure to the Niobrara in the Wattenberg Field in Colorado, and the company estimates it has 350 gross drilling locations on the properties. The company drilled 16 horizontal wells here in 2011 and plans to drill at least 25 horizontal wells in 2012.
Crimson Exploration (Nasdaq:CXPO) has 10,000 net acres in Colorado prospective for the Niobrara. The company is not actively developing its properties and spent 2011 evaluating the results of other wells in the area. Crimson Exploration holds all of its Niobrara acreage through production and does not have an issue with any lease expirations here. The company has permitted its first well and plans to start drilling in Q1 2012.
PetroQuest Energy (NYSE:PQ) is involved in the Niobrara on a non-operated basis and completed a five-well test program in July 2011. The company plans to evaluate the results of these wells before proceeding with more activity here.
While most operators are working on the Niobrara in the Denver Julesburg Basin in Colorado, Quicksilver Resources (NYSE:KWK) has 210,000 net acres in the Green River Basin. The company drilled seven test wells here in 2011 and is currently seeking a joint venture partner to help develop this acreage.
The Bottom Line
The exploration and production industry has answered the siren call of the Niobrara and will no doubt continue to do so in 2012. Investors should check out small-cap operators here with the understanding that the risk is higher because exploration of the play is still at an early stage. (For additional reading, check out A Guide To Investing In Oil Markets.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.
Large-Cap Players
Most investors are familiar with the large-cap players active in the Niobrara, including EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Noble Energy (NYSE:NBL). A number of small-cap operators also are active in this play, most of which are just starting exploration of the Niobrara.
Small-Cap Players
GMX Resources (NYSE:GMXR) is shifting away from natural gas development and has set a goal of having 40-50% of its production from oil by the fourth quarter of 2012. GMX Resources has approximately 41,000 net acres under lease in the Niobrara, and the company has selected this play to help achieve this goal.
GMX Resources just completed a horizontal well on its acreage and plans to drill a vertical well here in early 2012. The company will also begin a seismic survey of its Wyoming properties during Q1 2012.
Petroleum Development (Nasdaq:PETD) has exposure to the Niobrara in the Wattenberg Field in Colorado, and the company estimates it has 350 gross drilling locations on the properties. The company drilled 16 horizontal wells here in 2011 and plans to drill at least 25 horizontal wells in 2012.
PetroQuest Energy (NYSE:PQ) is involved in the Niobrara on a non-operated basis and completed a five-well test program in July 2011. The company plans to evaluate the results of these wells before proceeding with more activity here.
While most operators are working on the Niobrara in the Denver Julesburg Basin in Colorado, Quicksilver Resources (NYSE:KWK) has 210,000 net acres in the Green River Basin. The company drilled seven test wells here in 2011 and is currently seeking a joint venture partner to help develop this acreage.
The Bottom Line
The exploration and production industry has answered the siren call of the Niobrara and will no doubt continue to do so in 2012. Investors should check out small-cap operators here with the understanding that the risk is higher because exploration of the play is still at an early stage. (For additional reading, check out A Guide To Investing In Oil Markets.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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