When investing in US oil stocks keep in mind such terms as Williston Basin, Bakken Formation, and Williston, North Dakota. The western state of few people, winter wheat, and oil has struck it rich, again. New oil drilling techniques have helped US oil drillers extract previously untapped reserves. The resulting increase in US oil production coupled with reduced demand due to the recession has helped the USA reduce its oil imports from roughly two thirds of demand to less than half. Fraking and horizontal drilling, two other terms to pay attention to, have opened up as much as 11 Billion barrels of reserves in Western North Dakota alone. Multiply that increase in reserves by other Western US states and Gulf of Mexico sites such as Texas and Louisiana and you can see how investing in US oil stocks could be profitable. As technology advances more energy could well be extracted from the Bakken Formation underlying Western North Dakota and Eastern Montana. There are estimates that as much as 503 Billion barrels of oil could be extracted as advanced drilling techniques come on line. The entire formation lies under Western North Dakota and parts of adjacent South Dakota, Montana, Saskatchewan, and Manitoba. Investing in oil could be more fun, and more profitable, than it has been for a long time. Investing in US oil stocks, especially, could put investors in the country that may well become the world’s biggest oil producer, passing Russia and Saudi Arabia.
As always we like to ask the questions, what is a good investment and what are safe investments in oil or any market sector? Safe investments in oil are typically big oil stocks like ExxonMobile – XOM or British Petroleum – BP. These companies are typically well managed and control huge oil reserves which gives them substantial forward looking income streams. These are dividend stocks as well which gives a retiree quarterly dividend checks along with, hopefully, steady stock appreciation. If what an investor wants is a secure stock with steady appreciation and a quarterly dividend check big oil can be a nice place to invest. If the investor defines a good investment as a stock that has the chance to grow quickly and multiple in value smaller stocks are typically a good addition to a stock portfolio.
For someone interested in investing in growing companies , investing in US oil stocks, companies using new technology to extract previously unusable oil reserves in places like the Williston Basin, may be the way to go. When investing in US oil stocks, or any stocks, always remember to old adage from the California gold rush days, that when everyone is digging for gold it may be more profitable to be selling picks and shovels. Oil companies make money when they find and extract oil. Oil exploration companies typically get paid for looking for oil, whether they find any or not. And, oil drilling companies get paid for drilling for oil, whether they strike oil or not. Companies like Bradken – ASX, make products like steel castings, the picks and shovels of oil drilling. They can thrive when drilling is active. As usual we are not suggesting that investors buy oil stocks or avoid them. The point is to watch the news, investigate opportunities, and find stocks at good prices with the promise for future growth. Right now investing in US oil stocks could just fit the bill.