Bullets for Christmas

Written By Nick Hodge

Posted December 24, 2011

Not those kind of bullets… bits of information.

To keep it light for the holiday, I’m going to give you three news headlines from the past three days with bullets from each.

If you’re not convinced of the Bakken’s success and potential by the end, you never will be…

1. The Vancouver Sun: Enbridge’s Bakken pipeline approved

  • The $180-million pipeline will move crude from the Bakken and Three Forks formations in Montana and North Dakota to Cromer, Man., via a new pump station at Steelman, Sask.

  • Pipeline companies have not been able to keep up with the flood of production, which averaged approximately 400,000 barrels per day on the U.S. side from 2,000 bpd a decade ago.

  • Enbridge VP: “The growth potential in the region is tremendous — with our existing infrastructure, and the proximity of our main line system, Enbridge is well positioned to capture opportunities created by increasing production.”

  • Earlier this month Enbridge said it would be investing $145 million to ship up to 70,000 bpd Bakken crude by rail between 2012 and 2013 to U.S. Midwest markets as an interim measure while it completes its Bakken expansion.

2. CBS News: N. Dakota leads 3-state region in oil, gas leases

  • Federal oil and gas lease sales in the Dakotas and Montana set a record in fiscal 2011, with parcels in Western North Dakota’s booming oil patch fetching the most revenue.

  • Oil and gas lease sales in the three states during fiscal 2011, which ended in September, totaled $109.9 million, with North Dakota accounting for $104.2 million. Montana tallied $5.2 million in lease sales, followed by South Dakota with $364,146.

  • Leasing revenue in the three-state region shows no sign of letting up.

  • In North Dakota, “every little nook and cranny” of available federal land is being leased.

3. Reuters: Bakken by the numbers

  • The magnitude of North Dakota’s oil revolution is hard for outsiders to grasp. Superlatives fail to convey the speed and scale of the transformation and its impact on the economy of the state.

  • On current trends, North Dakota will overtake California as the third-largest oil producer in the United States by the end of Q1 2012. Output is likely to exceed production from Alaska by the end of 2012 or early 2013.

  • In October, the state’s oil output rose to 488,000 barrels per day, up by a stunning 9 percent compared with the previous month (464,000 b/d) and an extraordinary 42 percent compared with October 2010 (344,000 b/d).

  • The state unemployment rate is just 2.9 percent, compared with 8.6 percent nationwide, which effectively means that there is more than full employment (assuming some level of frictional unemployment due to turnover). In the counties on the western side of the state overlying the Bakken formation, unemployment rates are less than 2 percent and labor shortages are acute.

Merry Christmas!

This year, the Bakken is certainly spreading more cheer than Santa…

The North Dakota state employment service reports there were 18,500 job vacancies open in October — and only half that many people looking for work.

The number of new housing permits in the United States has been cut in half since 2007. Permits in North Dakota are up 50%.

The U.S. national debt is over $15 trillion. The North Dakota state budget is expected to have a $300 million surplus at the end of its two-year cycle in June 2013.

North Dakota is now the fastest-growing state in the Union. Its median income is above the national average for the first time in decades. Its GDP is growing three times faster than the rest of the country.

You know any other place enjoying this kind of economic prosperity right now?

It’s clearly translating to stocks as well…

Here’s Enbridge (NYSE: ENB) — the company that just got Bakken pipeline approval — compared to the Dow Jones for the entire year:

Enbridge Bakken

This is going to continue for years. Revenues are exploding.

And there are three drillers in particular you should be aware of as this happens. They’ll be the gift that keeps on giving.

Call it like you see it,

Nick Hodge Signature

Nick Hodge

follow basic@nickchodge on Twitter

Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street’s Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor’s page.

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