North Dakota isn't exactly swimming in water. Average annual rainfall in the state ranges from 13 to 20 inches a year. That's a lot in comparison to the 5 inches that fall in the Mojave Desert each year. It's roughly equal to the 15 inches that fall on Los Angeles in a year. New York City gets an average of 43 inches.

How to buy in

Interested in buying into the Bakken boom anyway? There are two ways to go.

First, you can buy shares of a relatively small, relatively pure play oil exploration and production company in the Williston Basin.

Brigham Exploration is an example of the kind of company I mean. As of Dec. 31, 2009, the company had 282,584 net leasehold acres in the Williston Basin. Beginning in 2007, the company shifted the majority of its drilling operations from the Anadarko Basin in west Texas and the onshore Gulf Coast to Williston. It drilled 53 wells in Williston in 2008 and 54 in 2009. Total investment in drilling, leases and seismic exploration came to $220 million through the end of 2009.

The company has only 117 million shares outstanding and a market capitalization of just $2.3 billion. Revenue came to $70 million in 2009 and is projected to hit $778 million in 2010. Projected earnings per share are 45 cents for 2010 and 80 cents for 2011. The Wall Street consensus calls for 47% average annual earnings growth over the next five years.

Other similar pure plays in oil production from the Bakken shales include Whiting Petroleum (WLL, news), with 88,000 acres in the Williston Basin and a market cap of $5.1 billion; Continental Resources (CLR, news) with leases in both the Three Forks and Middle Bakken formations and a market cap of $8.2 billion; and Oasis Petroleum (OAS, news) with a market cap of $1.95 billion. Oasis Petroleum has been public only since June 2010, but it boasts 292,000 net leasehold acres in the Williston Basin.

Second, you can buy pick-and-shovel companies -- that is, shares of the companies that are leasing rigs and providing services to these producers.

The last year has seen an amazing resurgence of land-based drilling in the United States. As of the end of September 2010, the number of drilling rigs working on land in the United States and Canada had climbed by 641 to 1,625 from the end of September in 2009, according to Baker Hughes (BHI, news). Of that total, 718 rigs are working in Texas, home of the Ford, Barnett and Haynesville natural gas shales. That's up from just 328 rigs a year ago.

Louisiana is next with 178 rigs. And North Dakota is third with 135.

Contrast that with the trend in the offshore Gulf of Mexico, where 32 drilling rigs were working before the BP disaster and 19 are working now.

Drilling and oil-services companies with good exposure to land-based U.S. drilling include Weatherford International (WFT, news), Basic Energy Services (BAS, news) and Lufkin Industries (LUFK, news).

Many of these stocks trade near 52-week highs, but that's what happens when a boom psychology is in the saddle. A congressional investigation into high-pressure hydraulic fracturing in the natural gas shales and its effect on water supplies could put a dent in some of these stocks -- if investors come to believe that congressional Democrats have the votes to enact new regulations on onshore drilling.

That might give you a chance to get in at a lower price. So might a rally in the U.S. dollar. (See my blog post on the global currency wars, "Yes, it's a currency war, and no, no one is doing anything about it.") Is that on your list of likely events in 2010 or 2011?

At the time of publication, Jim Jubak did not own shares of any company mentioned in this column in his personal portfolio. His new mutual fund,Jubak Global Equity Fund (JUBAX), may hold positions in the companies, and positions may change at any time.

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.

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