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Finding oil out in the Bakken shale in North
Dakota is a hot topic for many energy exploration companies.
The Bakken formation is known as a dependable
supplier of crude oil and natural gas, but there’s another lesser known
region that promises to become the next big thing in the U.S. for oil and
gas explorers.
This place is being called “the little Bakken,” or
“NeoBakken” because of its potential. Companies are snapping up acreage,
doing deals and moving rigs into position as I type this.
This region is the Niobrara shale formation in
Colorado, Wyoming, Nebraska and Kansas, in the region where the four
states meet. This shale is in the Denver-Julesburg Basin, usually
referred to as the DJ Basin.
To invest in this play in the Niobrara investors
can purchase shares of a small Australian company that is focusing its
attention solely on the oil potential of this region. It has a U.S.
listed stock that still appears undervalued despite a substantial run-up
in 2010.
Samson Oil and Gas Ltd. (AMEX:
SSN) is headquartered in Perth,
but its U.S. operations are based in Colorado. The company’s shares have
pulled back as oil prices have dipped, and are currently trading below
the 50-day moving average. A retracement to the 200-day moving average,
around $2.00 per share, would be an excellent place to load up on shares
– although $2.50 will probably be a significant support area where an
initial position would also be attractive.