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Bakken Gusher: Montana Millionaires?
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There have been two major newsletter publishers pushing hard for oil companies that are working in the Bakken field in Wyoming/North Dakota/Canada, with some speculating that the recoverable oil will exceed that remianing in Saudi Arabia’s largest oil field.
Whether or not that’s true, I don’t know. There are certainly a wide range of estimates for this field, which requires somewhat unconventional extraction and which has frustrated oil companies for many years. The oil is of high quality, but it’s not necessarily in big, easy reservoirs that are simple to pump out of the ground. Something to do with shale and migrating oil and who knows what else.
I haven’t identified the oil companies involved here, though there are dozens, but I wanted to point my regular readers to the Stock Gumshoe Forum, where some very active sleuthing is going on for these firms. Some of the most active and reliable posters have weighed in, including some very good insights from WomanWithPortfolio, one of the best contributors to the forum. If they say they’ve got these companies sniffed out, they’re probably right … and they generally seem very enthusiastic about the potential of this area.
Sorry that I have yet to opine on the Bakken, but I’m no geologist and I don’t have anything that I can add quickly without doing some more in-depth research, so I’ll just pass you off to the other investors who have looked into this one already.
I’ll be writing to you soon with some more ideas … and hopefully they’ll be uncommonly fabulous. If you want to review what the folks on the forum are saying about the oil companies in the Bakken, here’s the link to follow (you don’t have to be a member of the forum to read the items, but you will have to join — free, naturally — if you want to add your two cents or start your own discussion).
And if you’d like some reading outside of Gumshoe Land on this one, the Kiplinger Letter folks also did a little writeup on the Bakken Formation and its oil potential last month, worth a quick read if you’re interested.
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33 comments for “Bakken Gusher: Montana Millionaires?”
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Getting oil from shale economically has always been a perplexing issue. I suspect part of what is drive the craze is the high price of oil raises the level of “what is economical”. More interesting is if there has been a technology breakthrough. Time will tell.
Best Wishes,
D4L
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Check out EOG – they are the kings of the Bakken and their stock reflects it. WLL is also a player.
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2 of the stocks talked about, I believe are bexp and nog I have also look at sgy and clr
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Does anyone have information on Agoras’ tease for “oil vacuum”?
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It would seem that the oil vacuum teaser is referring to (GBRC)Global Resource Corp. It is around $2.00. and has patents pending on this technology.
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Northern Oil (NOG) made an announcement this morning about their progress in the Bakken, and if you check out the following link, you’ll see how incredibly entwined the companies are that are doing the exploration and drilling in the Bakken. NOG was proudly announcing a successful test, but if you look further, you’ll see that they only have a 6% interest in the well, and Marathon has the rest. They have joint interests with BEXP, EOG, and WLL (Whiting) as well, with as little as 1% interest in some of the ventures. So here’s the link:
http://online.wsj.com/article/PR-CO-20080408-903549.html?mod=wsjcrmain
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Pure Energy Trader, which has generally lost me a lot of money, recommends Marathon (MRO) – but then they have another service where they recommend all their really good Bakken plays. Phsaw.
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Sorry to keep blabbering on about this, but I grew up in wildcatter country, so I’m keen on trying to get a handle on the best way to invest in the Bakken. It seems to me that another way to get in on this is through the equipment makers and suppliers.
It was the use of horizontal drilling that made the plays in the Bakken possible. The first companies to use this techique there, as far as I can find out, were Halliburton and Schlumberger, partnering with other companies. And Halliburton also has other interests there. (I’m not a fan of this company, I have to disclose.)
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I guess I’m late to the party with my find of NOG. I believe two other recomendations from the same teaser are ERF and CLNE.
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If I had a big bundle to invest in the Bakken, this is how I would do it, Chinese menu style:
one from column A: the big U.S. cos: MRO, WLL, EOG
one from column B: the small fry: BEXP, NOG, TEC (the latter too risky IMP)
one from column C: the wily Canadians: PBEGF, ERF (Enerplus bought up the interests of Lyco, which had some of the best acreage in the formation)
one from column D: the horizontal drilling suppliers: SLB (Schumberger) or HAL (I’d have to hold my nose for the latter and even then couldn’t buy)
Disclosure: I own shares of Whiting and Petrobank (beaucoup of this one) and I’m covered for equipment suppliers with a drilling ETF. I’m waiting for a dip in EOG and more promising news from the small fry.
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ABUCKATATIME Reply:
September 19th, 2008 at 10:16 am
I read everything I could on the Bakken, a subject which greatly interests me, and you sound so informed and yes, even successful, that I decided to join the blog so I could get advice. I realize that you posted your choices of Bakken companies 5 months ago, but since you outlined a very specific method (the Chinese menu) for choosing which ones you would invest in, maybe you would still be willing to help another lady, a senior who is still a newbie. I have $5,000 and would like to buy $1,000 each worth of stock in your recommended MRO, WLL, EOG, NOG and SLB. How would I go about doing that? Can I buy these directly? I don’t have a broker. Thank you in advance.
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KOG Kodiack Oil and Gas has a small position in the field. Anyone heard of these guys before
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reg. Rod Loveless’ response to Agoras’ tease for “oil vacuum”.. if that indeed is Global Resource Corp.(GBRC.pk), it might be interesting to note that it was picked as Popular Science’s ‘Best of What’s New’ Award in Nov’07 in the Green Tech category. Developed an emissions-free process that uses microwaves to pull fuel out of shale rock, tires and even plastic bottles. The extraction technology might also help recover oil that is stuck in muck inside hundreds of capped wells across the country. Available Production unit in early 2008.
It was @ 2.55 then. There was some negative opinion of the company & mgmt when I researched the company so I passed on it..
Relatedly, Raytheon (RTN) has been recently reported to be doing final testing of a process that uses microwaves to get oil out of shale rock…
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The USGS is supposed to release a report in the next 28 days on the Bakken field which may contain 100 billion to 500 billion barrels of recoverable oil. The field is found in the states of North Dakota (entire state), and portions of Wyoming, South Dakota and Saskatchewan.
Its not oil shale, the oil zone is between two layers of hard shale which has to be drilled through. Horizontal drilling lets the drillers go around the shale layers (most often by having one central drilling location with multiple horizontal horizontal radiating outward.
See this URL for more info: http://www.businessweek.com/ap/financialnews/D8VTC5480.htm
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My research says the three are: NOG, ERF, and CLR. No question on NOG and ERF, the stock chart in the teaser is definitely NOG and the bar chart is an exact copy out the ERF annual report.
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The best bet for speculation here is BEXP…..They are the $7 dollar stock he talks about.
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Many thanks to WomanWithPortfolio for doing (and sharing) her research.
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GUMSHOE, U R unbelievable which is why I send you this gift:
The stock is HNSO
This update is after the latest news release acquiring a significant interest in Global Med Direct. You must read this thoroughly to get a real understanding of what is going to happen with this stock trading under a half a penny! 25 million people in America suffer from Diabetes! Think of costs when it comes to medication, testing strips and doctor visits…. And understand that diabetics NEED to test themselves and buy the supplies. As per the press release last week, HNSO states that GMB is doing $10,000,000.00 in Annual revenues, but it is a small piece of a huge pie. That is why I am so excited about the potential here now!
First you need to visit the new company….. http://www.globalmeddirect.com/
Global Medical Direct is a nationwide Durable Medical Equipment provider specializing in direct to consumer diabetes supplies. The Company provides diabetes products and educational services to help patients lead healthier and more productive lives. Global Medical Direct provides an easy-to-use, cost effective and convenient way for patients to obtain their diabetes supplies and medications through their health plan, employer and government payers such as Medicare and Medicaid. The Company’s products include blood glucose meters, test strips and ancillary supplies, insulin pumps and supplies, diabetic shoes and orthopedic inserts and diabetes maintenance medication.
Now you have to look at the potential market and these INSANE PPS numbers. Remember…These are real numbers and all part of potential growth…..This makes me wonder how long this PPS WILL BE SUB PENNY!!
The total annual economic cost of diabetes in 2007 was estimated to be $174 billion. Medical expenditures totaled $116 billion and were comprised of $27 billion for diabetes care, $58 billion for chronic diabetes-related complications, and $31 billion for excess general medical costs. Indirect costs resulting from increased absenteeism, reduced productivity, disease-related unemployment disability, and loss of productive capacity due to early mortality totaled $58 billion. This is an increase of $42 billion since 2002. This 32% increase means the dollar amount has risen over $8 billion more each year.
The 2007 per capita annual costs of health care for people with diabetes is $11,744 a year, of which $6,649 (57%) is attributed to diabetes.
One out of every five health care dollars is spent caring for someone with diagnosed diabetes, while one in ten health care dollars is attributed to diabetes.
How can it be known if GMD will not grow to 100 mill in revenues based on the increase in the amount of money being spent each year? It can’t be known, but it can be conservatively assumed based on the FACTS stated.
WHAT IS WRONG WITH THIS PICTURE? $$$$$ With 200 million shares outstanding and a price of .005 HNSO has a market cap of 0.84 million dollars. GMD is doing $10 mill in revenues…..not including medbioworld valuation of between 6 and 10 mill……THIS STOCK SHOULD BE TRADING WAY HIGHER RIGHT NOW! AT LEAST NOT LESS THAN $0.15 WHICH IS LIKE A MOON SHOT FROM .005! LIKE 30 TIMES THE PRESENT PRICE
Do the math OLE GUMMER..Compare this to other stocks. This is a no brainer. All you have to know is that when a company has REAL revenues, not projected….The share price will rise accordingly. All of the signs of a major event unfolding here. And the best part of this is the price right now. A half a penny is INSANE….
Think of a major short position based on millions and millions of shares being printed after the close everyday…. see that the demand is outweighing the supply and some market makers are starting to move away. You read level 2 you will see is NITE @ .005 AUTO @ .0065 then the next offer is .01!
GUMSHOEVILLE PUTTING THE RUMORS TO SLEEP
HNSO does not have a convertible debenture and was never financed with DEBT! NO REVERSE SPLIT. 200 mill out is no reason to do a r/s No back door stock financing or printing of shares. What you see everyday is a bunch of Bull that the traders want you to see. Nobody has shares that they can unload unless they are taking a major LOSS! This stock was 12 cents 2 yrs ago when they had NOTHING!!
YEAH, I own shares in this company, AND I AIN’T SELLING! holding onto mine. Gummer I owe U a ton so make it your business to BUY BACK UP YOUR LITTLE RED, it’s Srping U NEED A GREEN $ TRUCK!!!
PLEASE! THE MKT CAP IS MERELY A PALTRY $840K….. How can this be with 10 mill in revs?
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For a detailed look at the Bakken from 2006 go to http://www.willistonnd.com/usrimages/Bakken.pdf
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The USGS report says 4.3B bbl recoverable with current technology. That is a very large amount of oil. I have owned erf for awhile, and just bought a little bit of BEXP.
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USGS report was only 4.3 billion, they were expecting 500-800 billion, sellllllllllllllll timbbbbbbbbbbbber
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Newshide,,,,,,I believe the report that Mr. Mining Man is referring to is Old News. We are all waiting for the report which is due out in weeks from the USGS. I am certain we will receive a new wave of hype newsletters from the usual suspects at that time. Hopefully, Travis will be able to find a way to prevent them from posting their entire missive on this site!
I think you might be a bit mixed up, too, newshide. The natural resource we are all talking about here is oil, so no need to yell “timber.” Besides in Montana no one would hear you! lol
Best advice posted here? from Wonder Woman, who suggests buying Chinese style. Thats what I did. Watch HAL and SLB tomorrow, for example (the move is on an upgrade, not Bakken, (so far). I also own MRO and HES from the big companies, and NOG because it set up nicely and is my first selection from the #2 list on the menu. I am looking at ERF BEXP and CLR, as well as SM, but if I buy any more, I am going to have to move to Montana! lol
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sorry that is the new report, its all over the wires
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my bad only 3.65 billion barrels of oil
http://pubs.usgs.gov/fs/2008/3021/pdf/FS08-3021_508.pdf
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You can put the Bakken in perspective by looking at the total proven reserves around the world. If the Bakken has 4 billion, that’s equal to a quarter of Mexico’s total reserves and nearly as much as Sudan. It’s about a fifth of the U.S. total reserves.
Here’s the link:
http://www.eia.doe.gov/emeu/international/reserves.html
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Here’s a link for some interesting Bakken coverage that might help put the USGS report released on April 10th in the proper perspective. While the Bakken oil pool is not nearly as enormous as the exaggerated estimates the investment newsletters were touting earlier…it’s still HUGE. The link is: http://nextbigfuture.com/2008/04/usgs-bakken-oil-study-released-365.html
[Reply]
WoW,,,
Travis and Woman with Portfolio…..thanks for having this forum. I was already an investor in several of the larger cap stocks like HAL, RIG and HES, but I decided to buy some of the little dogs that Woman With and others recommended here,,,WoW!
Today we had the news from PBR and HES regarding South America and their 0il discovery, which apparently fueled interest in the entire sector. That, combined with a market searching for leadership confirmation, and it was a perfect day for the Bakken doggies! Check out NOG for example, up 9%. The list is long for the oil and gas plays.
If you are a conservative investor, wait for a pullback. Last Friday we had a brief one day event
so that some could get in. I think the key going forward will be earnings. Many of these companies have reported higher costs and some have preannounced projected earnings shortfalls and hedge losses, (check out EOG, for example). That being said, the market seems to be forgiving them so far…….So be careful entering any of these stocks….many are high flyers! Further, the little dogs might sell off fast with the amount of speculation going on. Risk – Reward,,,We shall see.
Thanks again!
Loren Travis and WoW my email: advantedges@aol.com
[Reply]
I’m wondering how all the bakken speculation has been affected by the actual geological survey results, which I took to be very disappointing this month. These teasers talk about 500 billion barrels of oil and the U.S. survey said there was about 5-10 billion barrels of recoverable oil in there. Wasn’t that grossly disappointing, or am I confused?
[Reply]
are any of you watching bakken related plays? They’re all taking off. complain all you want about what is or isn’t recoverable. you’re missing the rallies in BEXP, BSIC.OB, MRO, and KOG, for example.
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WESTERN STANDARD ENEGRY (WSEG.OB) is also take off.
Less than $1.00 per share – you will not see less than $1.00, again soon! Be patient – it will grow quickly every month.
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joseph bailey III Says:
April 9th, 2008 at 7:45 am
GUMSHOE, U R unbelievable which is why I send you this gift:
The stock is HNSO
You have to admit, this guys got marbles! And that’s probably about it.
[Reply]
More bakken insight available at http://bakkenstocks.com
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i think the key to a good bakken play is mangement, i think you all probably remember Elm Coulee play in the willingston basin, richard findley to be exact, well with a little research i found he’s playing a big part in another company that has a large amount of land in bakken area. companies ryland oil in canada and north dakota, still really junior and trading on the tsx, but with management of that calibur and that much land i thought it looked pretty good. they have a 51 101 you can check out on their website too which states something between 7-11B bbl.
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