Most investors that follow the energy sector are probably familiar with the development of the Bakken in the United States. The exploration and production industry is also fairly active on the Canadian side of the border, where development of the Bakken is occurring in Saskatchewan. (For background reading, check out Oil And Gas Industry Primer.)
Most of the development in Saskatchewan is being conducted by relatively low-profile Canadian independent exploration and production companies. Although these companies aren't as well known as U.S.-based independent oil and gas companies, they are equally aggressive in developing the same resources as their counterparts in Montana and North Dakota.
IN PICTURES: 9 Simple Investing Ratios You Need To Know
Enerplus Resources Fund (NYSE:ERF) has 142,000 net acres prospective for the Bakken in Saskatchewan. This acreage is located in the Freda Lake, Neptune and Oungre project areas.
The Bakken here is at a depth of 6,500 feet, which is shallower than most areas of the Bakken in the United States. The company is assuming an estimated ultimate recovery on wells here from 100,000 to 150,000 barrels of oil equivalent.
Enerplus Resources Fund last added to its position here in April 2010, when it bought 154 new sections for $117 million at a government lease sale. The company plans to spend $70 million in capital in the Saskatchewan Bakken in 2010.
Crescent Point Energy (TSX:CPG) is one of the most active operators in developing the Bakken in Saskatchewan, where it has significant potential and reserves at the Viewfield project.
Crescent Point Energy made six acquisitions to increase its acreage that is prospective for the Bakken here, and now has interests in 578 sections as of the end of 2009. The company believes that it has 2,750 future locations to drill.
Crescent Point Energy just added to its acreage prospective for the Bakken and several other formations present in Saskatchewan. The company added $175 million to its capital budget for 2010 to develop some of these properties.
PetroBakken Energy Ltd. (TSX:PBN) is also developing the Bakken in Saskatchewan, where the company has plans to drill 140 net wells in 2010. The company also plans another 14 gross exploration wells to determine the extent of the Bakken on its acreage here. PetroBakken Energy Ltd. estimates that it has 210,000 net acres prospective for the Bakken and more the 1,000 drilling locations.
Some of these Canadian companies are structured as royalty trusts, which makes for a fairly complex tax treatment of dividends and capital gains for investors. These issues should be researched by investors before buying these stocks.
All this development requires infrastructure to transport the oil production, and Enbridge Energy Partners L.P (NYSE:EEP) recently announced an expansion of its pipeline system that supports the Bakken. The pipeline expansion will be in the United States and Canada, and will boost capacity by an incremental 145,000 barrels per day by 2013.
Energy Partners L.P estimates the cost at $370 million on the United States side and C$190 million for the projects in Canada. Energy Partners L.P is 27% owned by Enbridge Inc. (NYSE:ENB).
There is plenty of action on the Canadian side of the Bakken play, but much of it is unknown to American investors, who tend to focus on the aggressive U.S. based independents. (For more, check out Canada's Oil Billionaires.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
EconomicsEmerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
Stock AnalysisPepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
Investing BasicsTrading spot gold or gold futures, equities and options isn’t hard to learn, but the activity requires skill sets unique to these markets.
EconomicsExplore the historical relationship between interest rate increases and the price of gold, and consider what effect a fed funds rate hike might have on gold.
InvestingHow do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
InvestingAfter a ten-year run, the economies of Latin America are in a decline. For sustainable, long-term growth, the region needs structural reforms.
SavingsSocial entrepreneurs recruit "skeptics" to team green, by providing economically efficient products and services that minimize consumers' carbon footprint.
InvestingMany global Investment banks are highly involved in the energy industry, but there are also some smaller banks and boutiques that are strong players.
Stock AnalysisThese three stocks are resilient, fundamentally sound and also pay generous dividends.
Investing NewsAre stocks cheap right now? Be wary of those who are telling you what you want to hear. Here's why.
Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >>
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>