Welcome to the Million Dollar Way

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."


The largest continuous oil reservoir in the continental United States.

NEWS

Hess will double the number of rigs in the Bakken from three in 2009 to six or seven in 2010, and will spend approximately $1 billion/year in capital expenditures for the next four to five years in the Bakken. November 14, 2009.

The excitement continues. Even minor players are announcing major plans for 2010. Another example is GeoResources, Inc. Posted November 12, 2009.

North Dakota reports record oil lease auction. North Dakota holds an auction to lease a portion of state lands every three months. The most recent auction resulted in a record $72 million for the state; the previous high was $30 million in 1980 (but adjusted for inflation, about $80 million). Average lease was $1000/acre with highest rate paid in prolific Mountrail county, about $3000/acre. By the way, almost all the money goes for public schools. Comment: producers don't pay top dollar for leases just to lose them; this record auction suggests a very, very active 2010 drilling program in North Dakota. November 6, 2009.

Buffett Buys Burlington: Although BNI is a national (perhaps, better said, a regional) railroad, it has a significant presence in North Dakota. Today (November 3, 2009) Warren Buffett announced he will buy what he already doesn't own of BNI. November, 3, 2009.

BEXP announces another great well. Meanwhile, BEXP announces another great well (with first day production of 1,776 barrels of oil equivalent), this time northwest of Williston, pretty much at the extreme of their acreage. Although the well is in a designated oil field (the Bull Butte), it might as well be a wildcat as remote and lonely as it is. We've gotten spoiled in the Bakken oil patch. We are no longer surprised by wells producing greater than a thousand barrels the first day; they only hit the headlines when they approach 4,000 barrels. Oh, well. By the way, this was a 28-stage fracture stimulation. November, 2009.

Denbury buys Encore. Denbury announced a couple days ago that it was buying Encore and that was the top news story almost everywhere; it was certainly the top news story in the oil patch. Denbury becomes one of the largest independent oil exploration and producing companies overnight by buying Encore, whose main base is in North Dakota.
Denbury's assets are primarily located in Mississippi; Denbury now goes nationwide on the shoulders of the Bakken and the Three Forks Sanish. If you think "the Bakken" is over-hyped, check out "monster wells." Remember, the list of monster wells is only the tip of the iceberg, as they say. November, 2009.

What's not to love: a) oil back to a new, higher trading range; b) the major oil companies losing money or reporting lower earnings (forestalls talk of windfall profits tax, driving Congress nuts); and, c) a well in the Bakken at almost 5,000 boepd on initial production -- a new record (reported this week). At $50/barrel, that is $250,000 a day. That's more than a million dollars a week. If I'm wrong on my math, someone will correct me. Yes, the Bakken has severe production declines but let's see what this well is doing a year from now. October, 2009.

The Grenora "barnburner." And, I'm still waiting to hear how the "barnburner" up by Grenora is doing. October, 2009.

And now, another monster well, the Chandler James, in production for one full year, producing at a rate of 35,000 barrels/month, which at $50/barrel, is $19 million/year. Yeah, I'm excited. October, 2009.

Now, about the blog.

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009

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This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.

Last updated: November 14, 2009.