Rockin’ the Bakken

A doubling of potential reserves bodes well for these 3 Canadian firms.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

According to a recent release from the U.S. Geological Survey (USGS) the booming Bakken Formation that encompasses North Dakota, Montana and South Saskatchewan (although this part wasn’t part of the survey) hasn’t even begun to hit its stride.

The USGS conducted an updated oil and gas resource assessment for the Bakken Formation (U.S. only) and a new assessment for the neighboring Three Forks formation.

The Survey found that these formations contain an estimated 7.4 billion barrels of undiscovered, technically recoverable oil.  This is a two-fold increase from the previous estimate.

The total resource is essentially split between the two formations.

Now, 7 billion barrels of oil is relatively paltry when it comes to comparing the Bakken to some of the world’s great oil reserves.  The Canadian oil sands for instance contain reserves of more than 160 billion barrels.  However, to have this source of light crude so close to home is highly significant for the U.S.

Who wins?

For Canadian investors, perhaps the most risk averse way to play this find is through pipeline operator Enbridge (TSX:ENB,NYSE:ENB).

The Bakken is still new as oil fields go and therefore relatively little infrastructure exists (ie. pipelines).  Enbridge is there in a big way as the company has extended a pipeline that ran from North Dakota to Saskatchewan and joined it to the company’s Mainline with a link in Manitoba.  The Mainline is then able to distribute Bakken oil to the U.S. Midwest, Midcontinent and eastern Canada.

Moving out the risk curve, it stands to reason that if the entire resource has expanded, producers may see their individual reserves expand as well.  This bodes well for Canadian-based producers such as Enerplus (TSX:ERF,NYSE:ERF) and Crescent Point (TSX:CPG).  Both have reasonable Bakken exposure in their portfolio of assets.

All three of these companies carry a nice yield and are coveted by dividend investors.  If you consider yourself an income oriented investor, you need to click here now to receive our special FREE report “13 High-Yielding Stocks to Buy Today”.  This collection of companies will have you rolling in dividend cheques before you know it!  Simply click here and we’ll send you this report – FREE!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

A solar cell panel generates power in a country mountain landscape.
Top TSX Stocks

3 TSX Stocks You Can Hold for the Next 3 Decades

While the market faces significant headwinds, it's crucial to ensure that you can commit to the TSX stocks you're holding…

Read more »

energy oil gas
Dividend Stocks

2 High-Yield Energy Stocks to Buy as Recession Approaches

Energy stocks such as TC Energy and Canadian Natural Resources allow investors to generate income even in recessionary times.

Read more »

green power renewable energy
Dividend Stocks

3 Top Dividend Stocks to Drive Your Passive Income

These three high-yielding, safe dividend stocks could boost your passive income.

Read more »

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

protect, safe, trust
Dividend Stocks

TFSA Wealth: How to Earn $363 in Monthly Passive Income for Life

Canadian investors can harness the power of the TFSA to generate steady tax-free passive income for decades.

Read more »

Canadian Dollars
Dividend Stocks

TFSA Millionaire: How to Turn $40,000 Into $1.2 Million for Retirement

Here's how TFSA investors are using the power of compounding to buy top Canadian dividend stocks to build retirement wealth.

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Superb Income and Growth Stocks for Every Portfolio

The market is full of superb income and growth stocks, but not all belong in your portfolio. Here are three…

Read more »

stock market
Stocks for Beginners

Worried About Stagflation? 2 Canadian Stocks for All Market Cycles 

Stagflation delays economic recovery. You can keep your portfolio stagflation ready with these Canadian stocks that are suitable for all…

Read more »