With Bakken Setting Records, Northern Oil & Gas Is An 'Ideal' Energy Play

SunTrust analyst Neal Dingmann upgraded shares of Northern Oil & Gas, Inc. NOG from Hold to Buy and increased his price target from $2 to $4.

The Thesis

Dingmann expects the company’s earnings to grow by 68 percent this year and 37 percent in 2019, both driven largely by the Bakken Formation in the Williston Basin.

The company has continued to leverage its strong partnerships in the Williston Basin and, given its recent financing transactions, is now situated to take full advantage of the region. Northern is working on some of the largest projects, which have set production records in recent months.

Wells in Bakken are also now being drilled roughly three times faster than in 2014 and 2015 thanks to improvements in efficiency.

“These efficiency improvements, along with the highest oil prices we've seen since 2014, and differentials at less than $2.00 per barrel below WTI… are driving top-tier returns out of the Bakken,” said Dingmann in a note.

Price Action

Shares of Northern Oil & Gas were trading up 4.4 percent at $2.79 at time of publication.

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