Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Semiconductor Sector – Watch the Early Bird in 2019 - 21st Jan 19
From ASEAN Economic Development to Militarization - 21st Jan 19
Will China Surprise The Us Stock Market? - 21st Jan 19
Tips to Keep Your Finances Healthy in 2019 and Beyond - 21st Jan 19
Tips for Writing Assignment in Hurry - 21st Jan 19
UK House Prices, Immigration, and Population Growth Mega Trend Forecast - 21st Jan 19
REMAIN Parliament to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 21st Jan 19
Pay Attention To The Russell Stocks Index and Financial Sectors - 20th Jan 19
Hyperinflation - Zimbabwe's Monetary Death Spiral - 20th Jan 19
Stock Market Counter-trend Extends - 20th Jan 19
The News About Fake News Is Fake - 20th Jan 19
Stock Market Bull Trap? January 22 Top Likely - 19th Jan 19
After the Crash, the Stock Market Made a V-shaped Recovery. What’s Next - 19th Jan 19
David Morgan: Expect Stagflation and Silver Outperformance in 2019 - 19th Jan 19
Why Brampton Manor Academy State School 41 Oxbridge Offers is Nothing to Celebrate! - 19th Jan 19
REMAIN Parliament Prepares to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 19th Jan 19
Gold Surges on Stock Selloff - 18th Jan 19
Crude Oil Price Will Find Strong Resistance Between $52~55 - 18th Jan 19
Stock Market’s Medium Term is No Longer Bullish. It is Now Mixed - 18th Jan 19
SPX and Gold; Pivotal Points at Hand - 18th Jan 19
Fable Media Launches New GoWin Online Casino Affiliate Site in UK - 18th Jan 19
The End of Apple! - 18th Jan 19
Debt, Division, Dysfunction, and the March to National Bankruptcy - 18th Jan 19
Creating the Best Office Space - 18th Jan 19
S&P 500 at Resistance Level, Downward Correction Ahead? - 17th Jan 19
Mauldin: My 2019 Economic Outlook - 17th Jan 19
Macro Could Weaken After US Government Shutdown. What This Means for Stocks - 17th Jan 19
US Stock Market Indexes Reaches Fibonacci Target Zone – Where to Next? - 17th Jan 19
How 2018 Was For The UK Casino Industry - 17th Jan 19
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19

Market Oracle FREE Newsletter

UK House Prices, Immigration, and Population Growth Trend Forecast

What’s Driving America’s Oil Boom (This Could Make You a Bundle)

Commodities / Crude Oil Jun 29, 2014 - 03:05 PM GMT

By: Money_Morning

Commodities

The amount of oil produced in the U.S. has skyrocketed more than 50% over the last six years.

Now small towns all across the U.S. are filling with new-found wealth… and a new breed of millionaires.

Who’s leading the way? It certainly isn’t the big major oil companies.


They may have service stations on almost every corner, but their production numbers lag way behind average U.S. production rates.

In fact, according to a new report by audit firm EY, a subsidiary of Ernst & Young Global, the fastest growing oil companies in America are the smaller, more nimble outfits.

They may not yet be household names, but they will be.

And their stocks are rising as quickly as their reputations…

The Brave New World… of Oil

The catalyst for this unprecedented oil boom can be traced to one word.

Shale.

Now, shale doesn’t give up its oil easily, which is why shale oil is termed “tight.” Newer techniques such as hydraulic fracturing, or “fracking,” are necessary to separate crude oil from the shale deposits that surround it.

When a barrel of oil sold for much less than it does now, fracking cost more than the oil was worth. Small towns in places like North Dakota earned their livelihoods from farming.

People were just scraping by.

But the discovery of massive shale oil deposits in the Bakken Shale basin of North Dakota turned wildcatters, motel owners and truck drivers into almost instant millionaires.

It also transformed America’s smaller oil companies.

According to the EY report, it’s the smaller companies, not the giants, whose fortunes are being made in the oil fields of North Dakota. Exxon Mobil and Chevron may at the top of the list of the world’s largest oil companies, but thanks to the shale oil boom, ConocoPhillips, Occidental Petroleum, Marathon Petroleum, Valero Energy, and others are gaining on them.

As Energy Intelligence, an independent energy analysis firm, noted, “The North American shale revolution is starting to impact (the list of top oil companies), with… US independents… showing unusual strengths.”

The numbers tell the story.

While ExxonMobil’s oil production has only grown by 13% over the past decade, companies such as Abraxas Petroleum have boosted production by 63% in the past two years alone. Stock prices have followed suit. Abraxas is up over 84% since the beginning of the year. InterOil Corp. jumped 27% in 2014. Ultra Petroleum is up over 34% since the beginning of the year.

None of these companies are household names. But for investors, they’re the names to know.

“Companies with integrated refining operations, such as Shell Oil Company and Exxon Mobil Corp., face challenges when it comes to finding and pumping oil and gas in shale regions,” notes the EY report.

Those challenges come down to one factor: the ability to be nimble in the fast moving, fast growing shale oil sector.

Before the lumbering giants can get there, the smaller, independent companies are snapping up the acreage and drilling rights, and building their operations in the middle of one of the biggest oil discoveries in American history.

Here’s how big it is.

The U.S. Geological Survey estimates that there are over 500 billion barrels of oil in the Bakken Formation, with billions more in the surrounding Williston Basin. That would make it second only to Texas in terms of oil reserves.

But with much of the oil reserves in Texas already claimed, North Dakota represents an unprecedented opportunity for both independent oil companies and the investors who take advantage of their soaring stock prices.

And those stocks could soar for a long time.

Experts predict it will take 20 years to develop the 35,000 wells the area can support, and decades before the oil fields are exhausted. As long as oil remains over $60/barrel – the benchmark West Texas crude is currently above $106/barrel – extracting shale oil using current technology is profitable.

But you don’t have to move to North Dakota or wait decades to make a bundle on this boom. Fifteen million people in 32 states are already cashing in.

All of them have one thing in common: their lives will never be the same.

You see, what’s going on in the Bakken is just a small part of a much greater story. Anyone who can look beyond the “household names” in oil and energy can profit.

Kent has all of the details right here. It’s a backdoor way for anyone to stake their claim.

Source : http://oilandenergyinvestor.com/2014/06/whats-driving-americas-oil-boom-make-bundle/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules