There May Be Some Very Cheap Companies in Emerging Viking Play

UPDATE 1-RESEARCH ALERT-Paradigm starts Canadian oil & gas cos with buy

10:23AM ET on Tuesday Mar 08, 2011 by Thomson Reuters

* Sees drillers benefitting from activity in Viking shale play

* Sees new technology making Viking operations economically viable

March 8 (Reuters) - Paradigm Capital started coverage of several Canadian oil & natural gas companies, including Angle Energy and WestFire Energy , with a "buy" rating, and expects drillers to benefit from renewed activity in the Viking shale play.

Viking, a legacy play in the Western Canadian sedimentary basin, has seen a resurgence of interest as producers have been able to tap into previously uneconomic parts of the reservoir with better technology, the brokerage said in a note to clients.

The Viking play can turn out to be massive in scale with producers using new technology - horizontal drilling and multi-stage fracturing - to overcome drilling issues that plagued them earlier, it added.

Angle Energy's Viking holdings could become the company's most significant core area, it said.

The brokerage, which rated Compass Petroleum , Invicta Energy Corp and Novus Energy Inc with "buy," quoted the Alberta Geological Survey estimates that Viking contains 3.6 billion barrels of OOIP (original oil in place).

Paradigm also said the Viking at Redwater offers better economics than most shales - except for the Bakken.

The Bakken shale, located in North Dakota and Montana, has the highest crude oil content in North America Name RIC Rating Price Target Angle Energy Inc Buy C$13.75 Compass Petroleum Buy C$2.75 Invicta Energy Buy(Spec) C$0.60 Novus Energy Inc Buy C$2.00 WestFire Energy Buy C$13.00