The hottest oil play in the U.S. and, maybe in the world, is the Bakken Formation oil of North Dakota. The oil companies - particularly the small oil companies - are flocking to Bakken. Most of the small oil companies drilling in the Bakken were rewarded, early-on, by significant increases in the value of their stock. Recently, however, the stocks have crashed as the overall stock market panicked during the past few months.
The Bakken Formation consists of two parallel shale layers at about two miles depth. Sandwiched between the shale layers is a layer of dense dolomite which, so far, has contained the bulk of the oil produced. Both the shale and the dolomite layers are thin.
Advances in horizontal drilling techniques allowed the Bakken formation oil to be extracted. Vertical drilling is used to reach the shale-dolomite-shale layers which has been described as having a "oreo" appearance. Once drilling reaches the oreo layers, horizontal drilling is used to pierce the center dolomite layer for a distance of up to two miles. A fracturing technique is then used to open up the dolomite for oil flow and proppants are then inserted to hold the fractures open. The high-quality oil then flows out easily.
The above procedure may sound fairly simple but it took significant advances in horizontal drilling techniques to make it so.
This Bakken is an example of American ingenuity at its best. We will need more of the same if we are to survive the energy crisis that is descending on us.
Experts are still arguing about the amount of recoverable oil contained in the Bakken Formation. The estimates begin at about 2 billion barrels all the way up to about 500 billion barrels. Obviously, the future price of oil will play a major role in determining how much oil will be recovered from Bakken.
A $50 per barrel price for oil was once quoted as the oil price necessary to allow development of the Bakken. The present price of oil if hovering a little over that figure. Will development of the Bakken continue.
A listing of some of the oil companies operating in Bakken follows: Note: Lease figures are provided for some Bakken oil companies but these figures are not completely reliable at this time.
EOG Resources (EOG). The big winner at Bakken! EOG is generally regarded as being ahead of the other companies in developing and producing Bakken oil. EOG has over 300,000 acres under lease and they are drilling multiple wells. EOG has said that Bakken is giving them the highest return of any of their properties.
EOG has a market cap of $15 billion, revenue of $6.4 billion, and a net income of $2.4 billion. The PE is 6 but is forecast to drise to 16 over the next year. The EOG stock price is down about 50% over the past year.
EOG has the dubious honor of being a former subsidiary of the defunct and disgraced Enron Corporation. But don't let that association bother you. EOG is a well-thought of company with no hint of scandal. Their work at Bakken has been excellent.
Marathon's market cap is $21 billion, revenue is $72 billion, and net income is $3.5 billion. At a PE of 5, the stock is down about one-third over the past year.
Known as the shale experts! XTO has just jumped onto the Bakken scene, a move applauded by analysts. (XTO has also jumped into the Haynesville natural gas play in North Louisiana).
Market cap is $19 billion, revenue is $ 7.7 billion, net income is $ 1.9 billion. The stock PE is 9. The stock value has dropped almost 50% over the past year.
This may be the hottest of the smaller oil companies working the Bakken Formation. Brigham has developed a reputation as being expert in use of 3D seismic technology in finding oil at Bakken.
Market cap is $86 million & revenue is $125 million. Brigham's stock has lost two-thirds of its value over the past year,.
Northern is another small, hot company working the Bakken Formation. It has over 30,000 acres under lease and a heavy drilling program in progress.
Even though, this is only their second year as a publicly traded company, the company has enthusiastic management and will likely be a successful participant in the Bakken oil strike.
Market cap is $156 million and revenue is $3.5 million. Net income was 2.4 million. The stock price is down about 60% over the past year.
Whiting is another fairly small oil company whose name always comes up in discussions of who's doing what in the Bakken Formation. The wells they have drilled in Bakken are flowing well and, for future work, they have identified 100 or so net locations in Bakken for future drilling.
Market cap is $1.7 billion, revenue is $1.3 billion, and net income is $252 million. The company's stock is down 50% over the past year. The present PE is 5.
Continental is believed to be the largest (487,000 acres) lease holder at Bakken. Their first well there looked good so the company has quite a bit of promise at Bakken.
Market cap is $4.1 billion, revenue is $ 1 Billion, and net income is $320 million. The stock price has lost 50% over the past year.
St Mary's is by no means a pure Bakken play since they have varied oil & gas interests around the country.
Market cap is $967 million, revenue is $1.3 billion and net income is $92 million. At a PE of 6, the stock is down about 70% for the year.
This small company is often mentioned in Bakken discussions, however, the company has no wells in the area, yet. Kodiak does have 38,000 acres at Bakken under lease.
Market cap is $37 million and revenue is $7 million. There is no income, yet. Kodiak's stock has lost about three-fourths of its value over the past year.
Other small oil companies operating in the Bakken Formation include Petrobank, Paramount Resources, Primary Petroleum, Petro-Hunt and a few others. These will be added to the discussion list, above.
1. Stock Gumshoe Forum. Tons of useful information on the Bakken Oil Rush and the oil companies participating in Bakken.
2. Bakken Oil Formation. Bakken is the largest oil strike in the U.S. in many years.
3. Oil & Energy Stocks. Peak Oil & an energy crisis are arriving. Bad times but some will make money with oil stocks.
4. Germany in World War 2. The German side of World War 2.
The Bakken Formation oil rush in North Dakota is only a few years old but, already, many oil companies have plunged in and most appeared to be doing very well until the past year. Since then, many of the stock prices have dropped appreciably in step with the rest of the stock market. New drilling technology has been successfully applied in the Bakken, and the Bakken strike, conceivably, could mark the beginning of a turnaround for the oil industry in its fight against the arrival of peak oil and an energy crisis.
Disclaimer
This web site, titled Oil Company Stocks - Bakken and the information included herein, is intended to provide information only and should not be construed as investment advice. The information provided is meant to broaden your knowledge and enable you to make better investment decisions within your portfolio.
Sometimes I give an opinion on the quality of an investment. This information is based solely on my own investment goals and investment needs and might not reflect your goals and needs and might not be an appropriate investment for your portfolio.
Please consult with your financial manager/consultant/accountant before actually purchasing any of the investments discussed herein.
Last Updated: 06/24/09
e-mail me @ vanc13@cox.net (Author: Van Cook)
Search Bakken Companies