Whomever came up with this concept that being concentrated in the Bakken is a "negative" on KOG should be taken out back and slapped up! With recoverable oil reserves possibly in the range of 32 to 45B, and July production at 875,000 boepd, it is a POSITIVE to be focusing E&P $ in North Dakota. Some have been critical of KOG's debt ratio, but with their production numbers accelerating, it looks as though KOG will be just fine at $100 oil.
Not only are analysts wrong on criticizing KOG for being concentrated in the Bakken, but they are also miserably low on earnings estimates. I'm having a hard time projecting KOG's earnings, but I have OAS at about 91 cents and WLL over $1.30 for Q3, much higher than the "professionals." The information for calculating those numbers is public!!! I'm confident that KOG will exceed their estimates as well. The small investors/traders who put in the time and effort can usually do a better job than the analysts. Consider this: we get paid only when our investments/trades are successful, but the analysts get paid regardless of whether they are right or wrong as long as they spew out information.
There are many analysts that just don't understand shale oil and fracking. Most of the general populace also doesn't have a clue about fracking. Fracking in these shale plays is as big a deal in history as the development of mechanized farming, the invention of the automobile, computers and the internet.
They're lemmings! They all worship at the same temple. Diversify, diversify, diversify!
Warren Buffet says wide diversification is for investors that don't know what they're doing.
He also says you should not invest in any business that you don't understand.
Richard Rainwater, who built the Bass Brother's Fortune, says that if you want to amass great wealth, you must concentrate your wealth in "out-of-favor" sectors, in the survivors in that sector.
(That was when oil went from $144- down to $38- by the way.)
Now KOG is a survivor and the lessons that they learned in poverty will keep them from making the mistakes that others will make in good times.
But they have high debt now! Yes, but.......they've got hedges and short-term contracts for drilling, plus plenty of time on the non-callable 7-years bond debt. All they have to pay is the interest and their cash flow can easily handle that.
Meanwhile they're got their foot on the accelerator for maximum development while avoiding the pitfalls less experienced managements are prone to make.
I know analysts and they resemble Monday Morning Quarterbacks, the only ones than can do it better are the politicians and they're all lawyers.