The Motley Fools have said exactly what I've been thinking for the past year or so: amass your fortune in the Bakken. Years ago I started investing in energy because I enjoyed following the industry, and to a great extent, I felt it was fairly stable, if not exciting. But now I think a young investor could do well by picking a few companies in the North Dakota Bakken and investing regularly.
The more I follow the Bakken, the more I think one could dollar cost average with any number of Bakken players and do very well over the long term. I agree with the Motley Fools: consistently invest -- that means on a monthly basis. If nothing else, put a little away each month and don't get worried about the day-to-day volatility.
It appears companies in the Bakken are being valued based on their assets in the Middle Bakken, and to some extent, perhaps, their assets in the Three Forks Sanish.
Among the bigger players, I like the following companies in the order given: WLL, CLR, EOG, BEXP.
Among the smaller players, I like the following companies in the order given: NOG, KOG (two different business models), and now OAS.
Among pipelines: MDU and Enbridge.
There are many, many more ways to play the Bakken and many companies in the Bakken to invest in. My intent is not to step on anyone's toes, just to give readers a general idea of what I'm thinking at this point in time.
Of the Bakken companies, I am dollar-cost averaging in CLR and NOG, and ENB, but to a lesser extent. I take advantage of dividends offered by EEP. I think I missed opportunities in EOG, KOG, and WLL. But I can't complain about how things have gone in the big picture.
I am most intrigued by Slawson but it is not publicly traded. I think MDU is perhaps the best long-term, most conservative (safe) company out there. It's had a couple of tough years, but when (if) the economy turns, it should do very well. Right now it's trading not far above it's 52-week lows. It has never (?) missed a dividend payment and has increased dividends for the past five years. I do not own MDU yet but for a conservative investor with a long horizon, it might not be a bad choice. I certainly think it is one of the best utilities nationwide. Cap and trade won't hurt it (it has plenty of wind energy to offset carbon footprint).
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Sunday, June 20, 2010
Sagebrush
NEWS
January 15, 2011: Update on Sagebrush wells in Bottineau County. These are all Madison wells.
Original Posting
On the sidebar on the right, I have links to "producers" in the Bakken. I originally did not include Sagebrush for unknown reasons, probably an oversight.
But with the granting of five permits this past week on one or two abutting pads in the Renville oil field in Bottineau County, I thought it was about time to include a direct link to Sagebrush.
The five new wells will be on the same pad (or abutting pads) where there are already two wells (rig is on site). This appears to be two Eco-Pads side-by-side but I don't know; time will tell.
The pay zone in this area, is it the Madison? Yes, it is the Madison.
EPA More Emboldened With Each Win
As regular readers of my blog know, I have great anxiety about EPA taking control of rules and regulations of fracking nationwide. I think it's just a matter of time. Every "win" by the EPA emboldens the staff. Their latest win was in the Senate where the EPA prevailed in its authority to declare CO2 and water vapor hazardous substances. Water vapor contributes about 76% to greenhouse gases; a much smaller contribution is CO2 -- about 24%.
Be that as it may, here in Boston, the EPA is about to enforce rules on phosphorus discharge into the Charles River. I have no problem with the goal. What concerns me is that the dollar figures to do this are quite remarkable: it will cost anywhere from $6,000 to $120,000/acre to meet the EPA guidelines. When the figures vary by that amount, it tells me that no one really knows how to do this, and what it will really cost. As a very astute Bostonian noted, there's "a big difference between $6,000 and $120,000."Even without an MBA, one could figure that out.
It would cost the city of Milford $50 million to retro-fit its streets and highways. The annual city budget is $77 million. (A jobs bill? Maybe the temporary census workers could get jobs re-routing drainage systems.)
The program proposed by the EPA has never been tried on a scale this huge. Detractors are worried this is an experiment with a very high cost that has not been proven to work. The EPA says to "trust them."
By the way, Rahm Emanuel, the White House chief of staff, is expected to leave his job later this year after growing tired of the "idealism" of the Barack Obama's inner circle. This speaks volumes how rabid the left is and the one industry they loathe is the oil industry.
There may be good reason for companies like BEXP to accelerate their drilling programs.
Be that as it may, here in Boston, the EPA is about to enforce rules on phosphorus discharge into the Charles River. I have no problem with the goal. What concerns me is that the dollar figures to do this are quite remarkable: it will cost anywhere from $6,000 to $120,000/acre to meet the EPA guidelines. When the figures vary by that amount, it tells me that no one really knows how to do this, and what it will really cost. As a very astute Bostonian noted, there's "a big difference between $6,000 and $120,000."Even without an MBA, one could figure that out.
It would cost the city of Milford $50 million to retro-fit its streets and highways. The annual city budget is $77 million. (A jobs bill? Maybe the temporary census workers could get jobs re-routing drainage systems.)
The program proposed by the EPA has never been tried on a scale this huge. Detractors are worried this is an experiment with a very high cost that has not been proven to work. The EPA says to "trust them."
By the way, Rahm Emanuel, the White House chief of staff, is expected to leave his job later this year after growing tired of the "idealism" of the Barack Obama's inner circle. This speaks volumes how rabid the left is and the one industry they loathe is the oil industry.
There may be good reason for companies like BEXP to accelerate their drilling programs.