Credo Petroleum (CRED)

[OilStockReport]

I see continued upside. What do you think?

Credo Petroleum (CRED) seems to be in a position for improvement. Credo has seen better times as it once traded at $30 a share. This company used to derive most of its revenue from natural gas. Credo is trying to change with the current pricing environment and is increasing oil production. Credo's areas of operation are:

Central Kansas Uplift - 150,000 Gross/90,000 Net Acres
N.W. Oklahoma - 75,000 Gross Acres
North Dakota - 7,000 Gross/5,734 Net Acres
Texas Panhandle - 3,000 Gross Acres
Southern Oklahoma - 4 Waterfloods
Although its Kansas acreage is worth a fraction of its Bakken, Credo is increasing production. It has had a 40% success rate, and has a completed well cost of $465,000. Credo estimates reserves per well of 42 MBO. Total net reserves of 1.6 million barrels of oil. Credo's Bakken acreage is a prime location. Acreages adjacent to its positions are owned by Marathon (MRO), XTO (XOM) and Williams (WMB). On November 15, 2010, Williams purchased 86,000 acres in the area for $11,000/acre. Credo maintains net reserves of 4.2 million Bbls and 3.6 Bcf are in its Bakken acres. The waterfloods in southern Oklahoma have a 400 Bopd with a 70% oil cut. Humphreys Prospect has net reserves of 640,000 Bbls and 10 Bcf. Credo has the ability to increase production and will be able to add gas production when pricing improves. For more information on this stock check out Credo Petroleum: Worth a Look.

P/E Ratio- 62
Price to Sales- 7.04
Price to Tangible Book- 1.87