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The Bakken Shale Story

The Players
Continental Resources (NYSE:CLR) - The company currently has 350,000 acres in North Dakota with six rigs up and working and another three expected to go online by the third quarter of 2008. In the first quarter the boepd (barrels of equivalent per day) was 1,532, an 11% increase from Q4. The stock has been a trader's delight, gaining over 150% in 2008 through the middle of June.

Encore Acquisition (NYSE:EAC) - The company sits with 178,000 acres in the Bakken, more than double the number from Q3 2007. It only has one rig in the area, but there are plans for two more by August 2008. On May 22, the company announced the board has authorized management to seek out strategic alternatives including a sale of the company. In the month following the announcement the stock was up 17% and hit a new historic high. With the stock gaining over 100% since the January low, it is not likely someone will jump in to pay a premium on top of the recent stock rally.

Whiting Petroleum (NYSE:WLL) -Whiting currently has 96,500 net acres in the Bakken with five rigs up and working and another four expected to come online by the end of 2008. Production for the company has surged to 4,153 boepd in March, triple that of the average Q4 number. Whiting has been another favorite of traders and momentum investors. After going sideways for two years, the stock exploded in the forth quarter of 2007 and has not looked back. The company has tremendous growth in the Bakken Shale, but the beauty of this stock is the diversity it has throughout the Rocky Mountain region.

Kodiak Oil & Gas (AMEX:KOG) - This is a very aggressive play that is new to the Bakken Shale. The company has 45,000 net acres, with another 8,000 pending. Kodiak's first well was drilled recently and should be producing by Q3 of 2008. With the stock trading below $5 per share and up over 100% in the last two months, this is the riskiest of the stocks mentioned by far.

XTO Energy (NYSE:XTO) - In late May 2008, XTO announced a major purchase in the Bakken Shale that would cost the company $1.85 billion. The purchase included 352,000 acres of net leasehold of the Bakken Shale in North Dakota and Montana. The company estimates the proven reserves to be 68 million barrels of oil equivalent. According to the company's president Keith Hutton, the $3 per-barrel production cost makes the new acquisition a superb addition to the XTO portfolio.