If you were to go into the boardroom of a major oil company and say that you just picked up 42,000 acres, those gathered around the table might ask if you had found that acreage in the seat cushions with the crumbs and lint. For Kodiak Oil & Gas , though, a purchase like this will be talked about for a while. The company's most recent purchase increased its assets in the Bakken formation by 27%, and an additional 5,700 barrels of oil equivalent per day should help to grow production numbers as well.
A lot of problems can arise when a company acquires new assets. Do they fit the company's strategic vision? Did the company pay a good price? In this video, Fool.com contributors Tyler Crowe and Aimee Duffy help to answer some of these questions about Kodiak's acquisition and also looks at its prospects.
Kodiak has one distinct advantage over several other small exploration and production companies -- it's in the Bakken. This shale oil play is one of the premiere places to produce oil in the U.S. and gives Kodiak enormous potential.To find out more about this dynamic energy play, you're invited to check out The Motley Fool's premium research report on the company, which comes with a full year of updates and analysis as key news breaks. To get started simply click here now.
The article This Little Oil Company Just Made a Big Buy originally appeared on Fool.com.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow them both on Twitter, @TMFDuffy and @TylerCroweFool, respectively.The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.