Sunday Morning Musings -- News and Highlights -- Idle Ramblings -- The Bakken, North Dakota, USA

1.  This puts the Bakken into perspective. Manhattan (New York) rents moving from $2,500 to $5,000 for an apartment.

2. Huge story in Bismarck Tribune about CCS Midstream. I posted when they first came to Williston not long ago.

3. I guess along with the rest of the nation, the Minneapolist Star Tribune finally heard about the Bakken; at least two in-depth articles, this is the first. A quick glance at the first article does not suggest anything new to those who have been following the Bakken, but based on what I've seen, most for most folks in Minnesota, the Bakken is still new to them.

4. The Chinese will compete with GE and Denmark's Vestas and others to produce whooping crane killers. This will be entertaining to watch.

5. This story is reported many different places, this one from the Anchorage Daily News.

North Dakota will likely leapfrog California and may even overtake Alaska in the next year -- far outpacing earlier industry predictions -- to become one of the nation's three biggest oil-producing states, a government regulator said.

6. I think I've linked this one before: feature article on Chesapeake Energy's CEO, Aubrey McClendon. Chesapeak Energy is now #2 behing ExxonMobil in natural gas production.

Erudite and confident, with rimless glasses pinned to a face that looks far younger than his 52 years, McClendon is charming. And he’s not shy about spending money. Professionally, he’s combined those attributes to stunning effect, building Chesapeake Energy into the nation’s second-biggest producer of natural gas after ExxonMobil, pumping 3 billion cubic feet per day out of the 13.7 million acres it controls—a landholding roughly equivalent to West Virginia.

If the article mentions the Bakken, I missed. According to CHK, the company left North Dakota prematurely, and is now coming back in. The jury is still on whether it will succeed in its stated strategy to tackle the Williston Basin differently than the others already here.

I've always said the "business of the business" is what is important for investors, and Forbes notes that:

The accounting method also hides mistakes—like the $325 million Chesapeake spent buying land in Michigan in 2010, thinking that it had found a hot new play. It hadn’t. Chesapeake now faces 100 lawsuits for trying to back out of some leases.

Even when the company finds gas, it sometimes doesn’t pay to drill. For instance, the company needs natural gas prices of only $2.25 per thousand cubic feet to break even in the Marcellus (prices are currently around $4). But in Louisiana they need $3.50 and in Texas, $4.50. Yet McClendon’s crews have been drilling at a breakneck pace in the latter two, even at a loss.

Why? Use it or lose it: Chesapeake must contractually sink at least one well on each leased section within three years or forfeit the rights. Extrapolate this across the nation’s gas plays and it’s easy to see why prices may stay low and why McClendon’s land machine, the heart of Chesapeake’s greatness, could take the company over a cliff.

7. More to follow, perhaps. But this may be the best of those I've seen this weekend, an article in SeekingAlpha, "Seven Energy Stocks to Buy Before Oil Hits $115." If oil is programmed to hit $115 and average $115 for the calendar year 2012, I can think of 150 companies you may want to consider, starting with NOG and working on up from there. The seven suggested by the contributor linked above: XOM, COP, EOG, RIG, MRO, NBL, and HOS. To those I would add, in no particular order: CRR, BHI, SLB, HAL, NOG, KOG, CLR, WLL, BEXP, CVX, ENB, ENC, and the rest of those listed at earnings central. And folks express wonder at some of the things I post. Hmmm.