Having changed its name and symbol from Innocent, Inc. (INCT) to Panther Energy (PNEG), the company’s outlook and current position is highly optimistic as the company focuses its assets in a state recognized by many as being on the cusp of a second oil boom. Energy industry analysts are becoming quite excited about the untapped oil prospects in the Powder River Basin.
North Dakota currently has an economic growth rate of 13.4%, simply trouncing the average U.S. state growth of 2.5%. This is the third year in a row where North Dakota has experienced such growth and the muscle behind the boom is a surge in oil production from the Bakken Shale, an underground rock formation in the northwestern part of the state. Energy analyst Raoul LeBanc of energy consulting firm IHS Energy suggested that the Powder River Basin may someday be seeing the drilling frenzy of the Bakken, and Wyoming may end up becoming the next North Dakota. The Powder River Basin encompasses most of northeaster Wyoming and a sliver of southeastern Montana.
Analyst Stephen Tremmel of IHS Energy points out there are lots of ‘tight’ formations as well as conventional formations in the Powder River Basin to tap for oil. Tight formations refer to oil plays that require enhanced oil recovery techniques to extract the oil such as fracking and horizontal drilling.
Several other major energy companies are getting excited about the prospects of the Powder River Basin as well. Chesapeake Energy Corporation agreed to an asset exchange with RKI Exploration & Production LLC, which the oil-and-gas company expects will increase its exposure in the Powder River Basin of Wyoming. The asset exchange involved a complicated land swap on top of which Chesapeake paid an additional $450 million to acquire additional properties in the Powder River Basin. Chesapeake’s holdings in the Powder River Basin will increase by 66,000 net acres to a total of 388,000 net acres, while Chesapeake’s average working interest in the area will rise to roughly 79% from 38%.
Oil giant EOG Resources has also been increasing its exposure in the Powder River Basin having drilled 16 net wells in 2013, and plans to drill 28 net wells this year. With 30,000 net acres in the region, EOG Resources has an additional 115 net locations to drill, and may be looking to acquire others.
The bottom line is that the energy sector is treating the Powder River Basin in the manner of a loaded slot machine expected to soon give a tremendous payout. This places Panther Energy at the right place and at the right time.
For more information, visit www.PantherEnergyInc.com
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