The less publicized success story has been booming oil production from shale plays like the Bakken formation in North Dakota. In the course of three years, oil production in the state's Bakken formation has jumped more than 20 fold to 135,000 barrels per day in 2009 from recoverable reserves now estimated at nearly 4 billion barrels.
As things stand, the Bakken play is the only proven and successful source of oil from a shale formation, but independent producers are fanning out to other shale formations in search of similar gains.
Analysts estimate the breakeven price for shale oil at around $50 a barrel, making it an attractive investment at current prices, which have held between $70-80 a barrel for much of this year. With average costs at about $4-$7 million per well in Bakken, according to the state Geological Survey, and oil prices higher than $50 a barrel, this was a sweet deal.
"There's been a bit of a land rush in places like the Niobrara. There have been rumors which were later confirmed that a few companies have had success with their test horizontal wells there. So companies are scrambling to add more acreage," said Kenneth Carroll, analyst at Johnson Rice & Company.
Read the full 2 page CNBC article here.. http://www.cnbc.com/id/38788985//
MPO Price at posting:
$1.09 Sentiment: LT Buy Disclosure: Held
