Fewer places to explore
But there's something else driving the price of Bakken and other potential production plays. Looking at the world, oil companies see a scarcity of promising areas for exploration and production. In their estimation -- especially when you factor in potential reserves that are off-limits because they're controlled by a national oil company in Saudi Arabia or Mexico or Venezuela -- there just aren't a lot of places to look for oil if you need to replace, let alone expand, reserves.
And that has produced a kind of global bidding war among oil companies eager to secure potential resources.
As an investor I think the strategy with the most potential profit in it is to think long term -- like a global oil company -- and buy what you think might be on their list of targets.
Invest in big oil's targets
In the United States I think that strategy means considering unconventional producers such as Pioneer Natural Resources (PXD, news) in the liquids-rich Eagle Ford shale formation. (That's the same formation where Petrohawk did business.) It's also worth considering other plays in the Bakken shale that operate next to Brigham Exploration.
Two stocks that I'd bring to your attention are Oasis Petroleum (OAS, news) and Whiting Petroleum (WLL, news). Oasis holds leases on about 303,000 acres in the 200,000 square-mile formation. Whiting has leases on 579,000 acres, mostly in the southern part of the basin. To date, most production has come from western North Dakota. The U.S. Geological Survey estimated in 2008 that the Bakken formation, the largest contiguous oil deposit in the United States, could contain 4.3 billion barrels of recoverable oil.
Here the game is big, new offshore discoveries that might be tempting to the international majors or to national oil companies looking to lock up future sources of supply. Talisman holds unconventional natural gas and oil leases in the U.S. Eagle Ford and Marcellus plays, but a bigger attraction is the company's 14.6-million-undeveloped-acre position in Southeast Asia. In 2011 Talisman has increased production in Indonesia and Vietnam and started new development projects in those countries and in Papua New Guinea. Talisman projects that production in Southeast Asia will grow at an average annual rate of 8% to 10% through 2015. Tullow's Jubilee field in Ghana is a major extension of the exploration horizon in western Africa -- it's not just about Nigeria anymore.
As acquisitions, both Talisman and Tullow would be bigger mouthfuls than an Oasis or a Whiting. But with cash so cheap, oil prices down and oil companies casting worried looks at the future, I don't think they're outside the current deal envelope.
And at the worst, you'd be buying stock in oil companies that are themselves expanding production and that can expect the future price of oil to be higher than it is in today's soft global economy.
At the time of publication, Jim Jubak did not own or control shares of any company mentioned in this column in his personal portfolio. The mutual fund he manages, Jubak Global Equity Fund (JUBAX), may or may not now own positions in any stock mentioned in this post. The fund did own shares of Brigham Exploration and Oasis Petroleum as of the end of June. For a full list of the stocks in the fund as of the end of June see the fund's portfolio here.
Jim Jubak's column has run on MSN Money since 1997. He is the author of the book "The Jubak Picks," based on his market-beating Jubak's Picks portfolio; the writer of the Jubak's Picks blog; and the senior markets editor at MoneyShow.com. Get a free 60-day trial subscription to JAM, his premium investment letter, by using this code: MSN60 when you register at the Jubak Asset Management website.
Click here to find Jubak's most recent articles, blog posts and stock picks.
VIDEO ON MSN MONEY
ok Someone, you asked: A flat federal income tax of about 17% with about @ a $40,000 exemption/couple filing jointly with no other exemptions or deductions would ELIMINATE all the loopholes and special rates paid [or in many cases not paid] by all those corporations and billionaires who can afford to pay hundreds of thousands of dollars every year to the lobbyists and politicians who write the loopholes. The median income in the US is @ $48-49,000 so half of the population would pay $0 to $1530 total federal income tax. The tax could be filed on a postcard, eliminating the need to hire accountants[sorry!], and greatly reducing the IRS headcount. Billions more would be collected by ending the loopholes.
Also pass legislation designed to prevent Congress from continuing their practice of adding individual IRS loopholes to other bills -maybe a new amendment to the Constitution forbidding the making of any changes to the federal income tax code or any other federal taxes that are not brought up in a separate federal income tax bill before Congress, and such a bill not to be brought before Congress more frequently than once a year, and to be published to the public two weeks before being brought to a vote.
Also fix the loophole that a company is considered a 'foreign' co and exempt or partially exempt from federal income taxes if they have their co. 'headquarters' in a foreign country. Tie their taxes to the value of the business they conduct on US soil. Many companies list their HQ in different islands to avoid US taxes. Some time back [I think Geraldo] there was an investigation that revealed several hundred companies who gave as their co headquarters an address in ONE small, vacant building in the Caribbean.
Also a Constitutional amendment forbidding automatic budget increases for all federal departments and programs. Right now all federal departments and programs get automatic 5% annual budget increases, and these increases are figured into our national debt load. All of us taxpayers have had to cut back, why are we not only not cutting back all federal spending, but instead giving all departments an ADDITIONAL 5 % !
I do not think you get it. The gas bill for myself and my son is approaching my monthly house payment. High gas prices are a big drain on the economy. For every increase at the pump people have to cut somewhere else. That means that the oil companies get more and all others get less. All others includes charities and people helping their kids, friends, & relatives. The money I would normally give the Salvation Army last year went to buy gas. Today's kids are suffering because parents have to spend more for gas and are able to save less for college costs and their retirement.
This wasn't the forum for you to vent about not being given all the drugs you want. But since you did, Here's a little secret for you: The mandated 3 month narcotic reviews, yeah, your doctor can do it once a year. Same with the monthlies. UNLESS you have been 'flagged' as a junkie just trying to get drugs. I am a combat wounded veteran. I don't get a check for 'arthritis' like you. I work and pay taxes to support you. And the mental problems where you 'came off your meds', I go a little crazy too...........every time I see someone like you trying to ride your imaginary hero status. Those of us that support the people like you, we are getting really tired of it.
My word, but you people can't even wait DAYS to start rewriting history. Let's recap:
LIBYA: 1 dictator removed from power
COST = ~ 2 billion $US
US CASUALTIES = 0
IRAQ: 1 dictator removed from power (after the stated cause for the war changed TWICE!)
COST = ~ 2 trillion $US and counting
US CASUALTIES = 4000+ dead
The extreme right wing propaganda machine would have you believe that only they have the national security and defense credentials to effectively further strategic objectives in the world. Unfortunately the facts clearly show otherwise. Get cracking guys. You have a LOT of history rewiting to do...
How do we stop this? Voting for the third option on your ballot. Right next to or below your options for Democrat and Republican should be a third party. Usually it is Libertarian, and they want to shut down most of the government fat, saving our tax dollar in the process. Stop fueling the fires of big oil. Vote out the Republican and Democrat monkeys.
I am a disabled veteran with psych and physical ailments from my military accomplishments between 1990-1993. I was on 7 psych medications and chose to stop taking them over a year ago. I have a service dog (MARLEY) she helps with my anxiety levels but without me using “Black-market” marijuana its harder for me to control, without marijuana the ARTHRITIS in my back would be more painful. I have a young friend of mine who is diagnosed with MS (multiple sclerosis) he too benefits from the effects. I say to you the readers KNOW-THE-FACTS…..If it’s legalized it too would stimulate the economy by shutting down unneeded prisons and government spending on prison guards , low-level law officials and programs like” NARK” and “DARE” that eat at local community budgets(This would put the MONEY back where it came from Social Security, Healthcare and WEL-FARE). These are local programs formed by the government under the “war on Drugs” with money bribes to your local politicians. why do you think we all want to know now “WHERE DID THE MONEY GO ?” The budgets are done every year the money is hidden in programs!!!Have we forgotten we gave IRAQ “GRANTS” to rebuild not LOANS ? How about the tsunami $$ to Japan to rebuild or to Indonesia to rebuild OR HAITI after their earthquake to rebuild ? I have an IDEA use US tax dollars to help the US TAX PAYER……….The sad part is we the people didn’t vote for that congress did for us. when we have a crisis we don’t have the money . Not to mention the new STATE “regulation” on pain medication means I now have to drive to my doctors once a month instead of once-every 3. The raise they are considering for SSDI is a joke compared the the gas$ increases over the past 3yrs. WE keep writing laws that keep LOW-income, LOW-income. wall-street has the gas market cornered their job is to make their investors money, it’s congress that’s spending our money and draining the purse not WALL street. Try sleeping at night knowing the country i was injured protecting is the same country I’m now fighting to legalize an” alleviation” from my symptoms.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] A solid November employment report translated into a solid day of gains for the major averages. While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month.
It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|