Northern Oil and Gas Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of independent energy company Northern Oil and Gas (NYSE: NOG ) slumped as much as 11% in intraday trading on heavy volume.

So what: Independent oil and gas players in general were struggling today as Brigham Exploration (Nasdaq: BEXP ) and Kodiak Oil & Gas (NYSE: KOG ) joined Northern in declines. However, Northern has been the subject of some very unflattering coverage recently, which likely explains why it's down much more than comparable companies. In a note today, Barron's highlighted the continued insider selling that's gone on at Northern, including a $22 million sale by CEO Michael Lewis Reger last Friday. Meanwhile, self-proclaimed online fraud-fighter The Street Sweeper has posted a two-part missive on Northern that suggests it could be a "looming horror story."

Now what: The bears seem to have the upper hand today, but that doesn't mean that there aren't any bulls to be found. Wall Street analysts currently have an average target price of $35 for the stock and a long-term growth rate of 30%. Currently, the company's equity is valued at roughly $1.6 billion, and that's on just $60 million in total 2010 revenue, so the beef of the Northern story is a future promise. But bullish analysts or not, a speculative play like this holds little interest for this Fool and much less so when there are serious red flags being raised about management.

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Comments from our Foolish Readers

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Report this Comment On March 23, 2011, at 3:33 PM, EPS100Momentum wrote:

Why would you buy NOG for a bakken play when you have BEXP with hundreds of thousands of acres available
See BEXP 10K you will be shocked at its High rate of Oil well completion to Production in 2010 and its continuing in 2011 at nearly 100%
http://www.gurufocus.com/news.php?id=124262
Report this Comment On March 23, 2011, at 6:19 PM, awallejr wrote:

That Street Sweeper link is a real eye opener. An EPS100 what the implication is that all these Bakken wells may be destined to be quickly burning stars.
Report this Comment On March 23, 2011, at 7:41 PM, rclew wrote:

I thought it was a little strange that StreetSweeper shorted NOG shares in a large volume before publishing its disparaging stories about NOG. Is this how the game works? Short a stock and then write a story about how bad it is to run the price down, then buy to cover? Even though the story author did not trade the stock, according to StreetSweeper, it appears that StreetSweeper did. Was this the case or did I miss something? SS said it shorted the stock "through its members", buf also said it intended to recover
"its" money through the redemption of the shorted stock. Strange.
Report this Comment On March 24, 2011, at 1:58 AM, awallejr wrote:

What the SS article was saying is these Bakken wells are short lived. So you get an early gusher but they deplete fast. You really can get burned if you hold on to these stocks too long. Listening to Cramer in this play will hurt you if you don't act quick. Beware is all.

updated Moments ago Sponsored by:
	DOW	15,479.32	91.74	0.60%
	S&P 500	1,680.09	10.93	0.65%
	NASD	3,522.28	20.16	0.58%

BEXP.DL	$0.00		+0.00	+0.00%
Brigham Exploratio…		CAPS Rating:

9

Northern Oil and Gas Shares Plunged: What You Need to Know

Don't let it get away!

Comments from our Foolish Readers

Report this Comment On March 23, 2011, at 3:33 PM, EPS100Momentum wrote:

Report this Comment On March 23, 2011, at 6:19 PM, awallejr wrote:

Report this Comment On March 23, 2011, at 7:41 PM, rclew wrote:

Report this Comment On March 24, 2011, at 1:58 AM, awallejr wrote:

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