|Is the Niobrara the next Eagle Ford?|
The 'surprise factor' of the Niobrara may lure investors away from 'mature' Bakken
Investors will continue to abandon natural gas sensitive areas and refocus on oil, specifically the Niobrara, noted a September 29 report from Jefferies & Co. Inc.
Because the Niobrara is in its infancy, Jefferies called the play “ripe for investing” as “the market likes room for surprises.” While the company points out the Bakken as the “premier shale oil play,” it is “more mature and hence has less potential for surprises.”
The company points out, however, that the Niobrara “is not well understood and data has been spotty.” On the other hand, the Bakken is “verifiably economic with growth potential in Montana and extensional counties to the south of North Dakota.”
The company calls the Eagle Ford in the first quarter of 2010 the last “resource catalyst” that the E&P sector has seen and is looking to well results that should come from the Niobrara this quarter, noting that limited results from EOG Resources and Noble Energy Inc. have, thus far, been promising. The company expects to see results from Carizo, SM Energy, QEP Resources, Rex Energy and Voyer Oil and Gas by the end of the year.
Source: Jefferies & Co. Inc.