By Nathan Slaughter
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How I’ll Profit from Possibly the BIGGEST Oil Find in U.S. History
New Technology Unlocks the Bakken
$100 Oil Has Profits Gushing
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Editor’s Note: Today we’re bringing you an issue written by Nathan Slaughter of StreetAuthority’s Scarcity & Real Wealth about the high-potential Bakken Shale. Without further ado ...
If you’re hungry for a ground-floor opportunity, how about getting in on an oil play that’s twice as big as Saudi Arabia’s oil reserves--in the Midwest?
How I’ll Profit from Possibly the BIGGEST Oil Find in U.S. History
In 1999, just months before his death, a respected geochemist named Leigh Price was working on a research paper that would soon send shockwaves through the energy sector.
Dr. Price had spent much of his career with the U.S. Geological Society (USGS) assessing the hydrocarbon potential in an area known as the Bakken Shale, a geologic sweet spot straddling parts of North Dakota, Montana and southern Canada. The culmination of his work was a manuscript suggesting that the area held more oil than anyone ever dreamed.
Around 413 billion barrels.
The report generated some controversy. After all, the entire country of Saudi Arabia only has 250 billion barrels of crude reserves. Could it be possible that North Dakota could dethrone the king of OPEC?
The answer to that question is the subject of endless debate among geologists. A master’s thesis written by a University of North Dakota grad student back in 1974 pegged the resource potential at 92 billion barrels. Work performed a few years ago using extensive sampling data and powerful computer modeling put the total at 300 billion barrels.
For its part, the USGS has calculated that 3.65 billion barrels of oil are recoverable. But most think that’s a lowball figure. North Dakota’s director of mineral resources says 11 billion. And the top executive of a leading oil producer believes the area could ultimately yield 24 billion barrels. North Dakota is now pressuring the US Dept. of Interior and the USGS for another review.
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New Technology Unlocks the Bakken
The productivity of oil reservoir rock is determined largely by two factors: porosity and permeability. The more porous the rock, the more empty space available to store oil and gas. And the more permeable, the easier fluid can flow through and be captured.
Some prolific oil fields have porosities of 30% and permeability measures of 1,000 millidarcies or more. By contrast, the Bakken is a tight shale formation with low porosity of 5% and permeability of 0.04 millidarcies. So while there is plenty of oil, bringing it to the surface is a challenge.
Many oil companies have come and gone in the Bakken Shale since production first began in 1951--and a lot of dry holes to show for their efforts. Of course, it’s easy to have hit-and-miss results when you’re drilling two miles down into a thin layer of five to 100 feet. And even if that bulls-eye was hit, producers still had to hope for natural cracks and fissures in the rock to release trapped oil.
But the past few years have brought two game-changing technological advancements. The first was horizontal drilling, in which a company drills down 10,000 feet or so to reach the most productive level, at which point it makes a 90-degree turn and creates a horizontal leg.
But horizontal drilling alone isn’t enough--trapped oil still has to be released from the tight rock formation. To stimulate production, a few innovative companies have begun using a technique that was perfected in the natural gas wells of Texas: hydraulic fracturing (fracking), injecting sand and fluids at high pressure to artificially crack the rock and prop it open.
$100 Oil Has Profits Gushing
Thanks to the developments mentioned above, oil companies in the region took out 113 million barrels just last year. And with oil at current prices, increasing the productivity of the Bakken is more compelling than ever.
With production rates widely expected to double to 700,000 barrels per day over the next couple of years, the Bakken will be swimming in cash.
Good Investing!
Nathan Slaughter
Editor, StreetAuthority’s Scarcity & Real Wealth
P.S. A lot of companies should profit from this trend--from drillers like Precision Drilling (PDS) to midstream players like Enbridge (ENB). But if you really want to make money here, buy the pure-play producer I just recommended to my paid subscribers. This company is growing its reserves like crazy--and thanks to soaring oil prices, its revenues (and profits) are going along for the ride. To be fair to my subscribers, I can’t tell you any more information about this opportunity right now. But if you’re the least bit interested, try a $39.95 risk-free subscription to my newsletter. Within seconds we’ll send you everything you need to know--including the name of this stock.