Minnesota-based Northern Oil and Gas (AMEX: NOG) has a slightly different business model compared to fellow players in the Bakken. The company is a nonoperating participant in the Bakken and Three Forks regions -- a pretty unusual strategy for someone in this lucrative shale play.

But here's the flip side to the story: The company has working interests in a total of 413 gross wells, which includes major partnerships with EOG Resources (NYSE: EOG), Hess (NYSE: HES), and Continental Resources (NYSE: CLR).

Strong fundamentals
Here's the result: Production in 2010 shot up by an astounding 214% compared to the previous year. If this doesn't sound appealing, then this should: Proved developed reserves at the end of last year stood at 6.4 million barrels of oil equivalent -- a whopping 190% jump from the prior year.

Cash flow from operations had been impressive in the past 12 months -- it more than doubled to $54 million from $21 million in the previous year. I expect an exponential growth trend in the next couple of years, considering the fact that it operates on a play that has a potential to change America's energy outlook.

A safer bet
Northern's business model looks appealing since it seems that pre-emptive measures to lower risks by having a spread over the entire Bakken reserves are actually working. Currently, it does not make much sense to consider the stock's price to its earnings since Northern Oil is new in its operations in Bakken. Price-to-book stands at 3.8. While assets look a bit overvalued, I highly doubt that the market has taken its future cash flows into consideration.

Discounted future net cash flows stand at $210.6 million at the end of 2010 -- again a vast improvement from $68 million the year before. This is not surprising given the exponential hike in production and reserves.

Foolish bottom line
With the fundamentals looking strong, this stock looks like a strong buy to me. Management seems to have a clear idea where the company is headed. Foolish investors might want to dig deeper for a clearer picture.

Isac Simon does not own shares of any of the companies mentioned in this article. 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.