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According to recent data Goodrich Petroleum Corp (NYSE: GDP) was among the most hated stocks in the energy sector. Investors sold short an enormous 59.5% of its float as of the end of March. That move backfired big-time as the company's shares are up more than 25% today.

The gusher that burned shorts
Goodrich Petroleum reported exceptional well results today in its newly acquired acreage that's prospective for the Tuscaloosa Marine Shale. Its Blades 33H-1 well achieved a peak 24-hour average production rate of 1,270 barrels of oil equivalent per day, or BOE/d. Even better, nearly all of that production was oil as oil production was 1,250 barrels per day.

With more than 300,000 net acres in the Tuscaloosa Marine Shale Goodrich Petroleum has built a massive position in this emerging oil play. It is among the early leaders in developing the play along with Encana (OVV 0.45%) and Halcon Resources (HK). As the following slide shows the exceptional results of this new wells really looks like it will extend the play to the south.

Source: Goodrich Petroleum Investor Presentation (Link opens a PDF)

Overall, the Tuscaloosa Marine Shale hasn't been the easiest play for producers to coax oil out of its rocks. Issues with clay and other obstacles have made it tough to economically produce the oil that energy companies know is trapped within the shale. This difficulty is one reason why Goodrich Petroleum and Halcon Resources are among the most shorted stocks in the energy industry as some investors don't think it can be done. However, given recent well results from Goodrich and Encana, it appears like the industry has figured out the best formula to unlock the oil from this play. That's not the news Goodrich Petroleum short-sellers wanted to hear.

A word of warning to Halcon Resources' short-sellers
This is also really bad news for short-sellers of Halcon Resources stock, which had sold short 23.2% of its stock as of the end of last month. Those shorts are hurting today as Goodrich's well results sent Halcon's shares up by more than 10%. That surge might only be the beginning as Halcon Resources just announced it has a massive position in the Tuscaloosa Marine Shale, which it is calling a core holding. That's the same term that Encana has used when referencing this play. 

Like GoodRich Petroleum, Halcon has amassed a more than 300,000 net acreage position in the Tuscaloosa Marine Shale. As the following slide shows a lot of its acreage lies in the southern portion of the play, which is the section that Goodrich is starting to prove producible.

Source: Halcon Resources Investor Presentation (Link opens a PDF)

Halcon Resources really likes the oil rich nature of the play, which looks hold significant oil. In fact, Encana sees its position in the Tuscaloosa Marine Shale eventually producing 50,000 barrels of oil per day. Similar potential could await both Goodrich and Halcon.

Another reason Halcon shorts could be burned is due to the potential for the company to sign on as a joint venture partner in the play. With Halcon doing the early heavy lifting it could realize a lot of value when a larger player wants in on the emerging oil potential it is finding. That could unlock significant value and sent is shares soaring. Again, given positive recent well results that future is closer to becoming a reality that many shorts realize. 

Investor takeaway
Betting against the energy boom hasn't proven to be a good bet so far. While money can be made on the short side, there is a greater potential to be burned if that bet goes bad. That's why I wouldn't join short sellers in either Goodrich Petroleum or Halcon Resources as that money looks likely to go up in flames.