Credo Petroleum (CRED)

[OilStockReport]

Their shift to oil could pay off.

Credo Petroleum (CRED) is another spec play I own. Over the past few years Credo has changed the focus of its business from natural gas to oil. Its has acreage in:

Central Kansas Uplift-150000 Gross Acres
NW Oklahoma-75000 Gross Acres
Southern Oklahoma-10000 Gross Acres
ND Bakken-7000 Gross Acres
Texas Panhandle-3000 Gross Acres
Its Bakken acreage is in a very good location. The Fort Berthold Indian Reservation is near some of the best wells to date in the play. It currently has 50 drillable spacing units. Locations will grow as Credo estimates more than one well will be drilled on each spacing unit. Its Kansas acreage provides low cost, repeatable projects with a very good return at today's oil prices. In 2010, Credo managed to create 59% of its revenue from oil. Credo's plan creates revenue from its Kansas holdings, to finance horizontal wells in other areas. Credo is not for the faint of heart with a market cap below $100 million, but there could be opportunity here. If Credo is able to create enough revenue to purchase acres in other plays, or if natural gas prices recover this stock's market cap could increase significantly.