A look at three Bakken small caps

three bakken small capsHere’s an interesting article over at Seeking Alpha on three of the most well-known small cap Bakken oil companies. It’s a bit of a test, so I don’t want to ruin the surprise. But, it reveals one of the companies that doesn’t always get the most attention might be worth a look.

All three companies have seen impressive growth, which is not surprising considering the growth of the Bakken itself. The differences come in how each company has financed that growth.

Here we see one side of the capital structure with Company A choosing not to sell additional shares over this time frame (they took on debt earlier than the others opting to go with a balanced approach earlier than many of their Bakken small cap peers). Company B grew by secondary until early 2010 before turning to other means (debt plus cash flow) shown below. Company C has more aggressively tapped the equity markets to fund operations and producing property acquisitions. Surely you have them pegged by now but we’ll keep going.

None of the players listed here are highly leveraged but you can see that over time they have chosen to balance their capital structures tapping relatively cheap money in the senior debt markets recently to be better positioned to move into development mode and to continue to add acreage. As a hint, all three names are looking to be largely HBP’d by the end of 2013.

Read the rest of the article for the reveal. As always, this is not a stock recommendation, just interesting information.

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