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Bakken Oilfields to Out Perform Canadian Oil Sands

Wednesday, September 23, 2009

Bakken Oilfields to Out Perform Canadian Oil Sands

Bakken Oilfield Producers likely to be much more profitable than Oil Sands

The Bakken Oilfields make up a gigantic oil formation with over 4.3 billion barrels of recoverable oil. This oil fields stretch across southeaster Saskatchewan, North Dakota, and Montana and was not technically or economically accessible in the past; however, new technologies have made this massive oil field accessible in a much more environmentally friendly way than the oil sands of Alberta.

The Oil Sands in Alberta require energy intensive extraction methods, but not the Bakken Oil fields. The Oil in the Bakken’s can be extracted without this energy intensive process making it much more economical and ethical compared to oil sands extraction and refinement.

The new technology is called ‘horizontal multistage drilling’ and it does exactly what it sounds like: breaks rock along the length of a well to enable the oil to flow. This technology is expected to produce some of the highest returns in the oil and gas sector throughout not only Canada, but the world.

Does anyone remember President Obama’s statements about the negative side of the Canadian Oil Sands? He was very quick to highlight the negative environmental consequences to this type of oil extraction. Did you also know that President Obama believes the Bakken Oil Fields are a much better alternative?

On Wednesday, August 25, 2009 President Obama stated he“believes that drilling in the Bakken Shale is an important development...” because of the substantial amount of oil that is estimated to be recoverable.

This may be hearsay at this point, but rumblings can be heard that President Obama plans to pass legislation that would put a premium on Bakken Oil versus oil sands oil. The implications of such hearsay could result in explosive stock performance in any of the Bakken Oil Field producers. Just remember; where there’s smoke, there is normally fire.

Here's a look at where the Bakken Oil Fields are:

So who are the big Bakken Oil Producers in Canada?

Number one is Crescent Point (TSE:CPG), which first acquired Bakken lands in 2006.

Number two is Petrobakken, a newly formed company through the merger of Petrobank (TSE:PBG) and Tristar (TSE:TOG). Petrobakken has become one of the largest pure-play unconventional oil producers in Canada.

So what do these stocks look like?

Crescent Point (TSE:CPG) is currently trading just off its 52 week high around $37. The 52 week high was $38.23 and the 52 week low was $18.13. The current dividend yield is a healthy 7.2% and the average analyst rating is a buy.

Petrobank (TSE:PBG) is currently trading at $42.51. The 52 week high was $47.20 and the 52 week low was $16.26. There is no current dividend, but the average analyst rating is a strong buy. The merger with Tristar is coming soon.

Tristar (TSE:TOG) is currently trading just at $14.47. The 52 week high was $17.76 and the 52 week low was $6.90. The average analyst rating was a buy and the merger is coming down the pipe.

Look for these stocks to outperform their counter parts in the oil sands, especially if the rumours turn out true.

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