How to Play the Oil Rush in North Dakota

Oil Rush in North Dakota If you picture North Dakota as sparse and dull with vast stretches of open plains and endless roads to nowhere, think again. Lurking below the surface and hidden in the rocks is a potentially massive pool of oil that some believe could be the answer to the country’s future dependence on foreign oil. After Texas, North Dakota is currently the second-greatest producer of oil in the country, generating about 10% of the U.S. oil production with about 600,000 barrels monthly. (Source: Austin, S., “North Dakota Oil Boom,” Oil-Price.Net, August 13, 2012, last accessed February 13, 2013.)

And the rush by companies to the plains is in full force, based on my stock analysis. At the center of the oil boom in North Dakota is the expansive and oil-bearing Bakken Shale formation, where the advancement of hydraulic fracturing, or fracking, techniques has unearthed a potentially massive deposit of oil in the rocks that could be the most lucrative in decades, according to my stock analysis.

The so-called “shale” oil and its promising production and money-making potential are quickly becoming the topic of choice in the oil industry and everyone wants a piece of the action, as my stock analysis indicates. Small or big, companies of all sizes are staking out their ground here. The end result is that North Dakota is undergoing an oil boom, armed with the lowest unemployment rate in the U.S. at 3.2% as of December 2012, according to data from the U.S. Department of Labor.

But the actual amount of oil in the shale formation is subject to many estimates and it depends on whom you’re talking to, based on my stock analysis. Yet with new fracking techniques (a method in which rocks are cracked with force to release the oil), the reserve estimates could continue to rise; but one thing is clear, there could be a lot of oil. For the time being, there are opportunities to make money in this area with rising oil prices, based on my stock analysis. (Read “The Play You Can Make on Oil Prices.”)


My stock analysis suggests that the biggest player in the Bakken oil fields is Continental Resources, Inc. (NYSE/CLR). According to the company’s estimates, there could be as much as 20 billion barrels of oil in the Bakken and Three Forks area, according to the company’s web site.

Continental owns more land in the Bakken region than any other company, with around 984,040 net acres as of September 30, 2012; this the most likely reason why the stock has moved.

CLR Continental Resources Inc stock market

Chart courtesy of

Another big player in the Bakken area is Whiting Petroleum Corporation (NYSE/WLL), based on my stock analysis. The company is the second-biggest producer of oil in North Dakota, with close to about 580,000 net acres, according to the company.

The largest companies in the Bakken area, based on market cap, are Hess Corporation (NYSE/HES) and Halliburton Company (NYSE/HAL), according to my stock analysis.

Hess is estimated to have spent as much as $3.0 billion in the Bakken region in 2012; it produced about 64,000 boepd in the Bakken area in fourth quarter 2012, an increase of 68% year-over-year. (Source: “Hess Reports Estimated Results for the Fourth Quarter of 2012,” Business Wire January 30, 2013.) Hess owns about 500,000 net acres in the Bakken region.

So, my stock analysis indicates that investors should go north, as there could be a whole lot of money in those rocks and oil stocks.