Which Counties Are Brimming With Oil?

Source: EIA

It's "old" news that the Bakken Shale of North Dakota is an oil producer's dream. However, that dream has really been sweeter for a handful of companies drilling in the play's sweet spot as these companies have witnessed the greatest initial production (IP) rates. Let's take a look at the companies drilling in the counties that are just brimming with oil.

Norway's Statoil (EQNR -0.07%) has drilled three of the most recent top 10 wells in the Bakken. It claimed the top spot with an IP rate of 3,042 barrels within the first 24 hours. This well, Enderud 9-4 4TFH was drilled in McKenzie County. Statoil also holds the fourth and ninth place positions, with wells drilled in Mountrail and Williams Counties.

Statoil's most recent success, however, was actually overshadowed by the prowess of ConocoPhillips (COP -0.41%). The company has recently hit the sweet spot of the Bakken attaining four of the ten best most recently drilled wells, including claiming spots two, three and four. While its top well was located in Dunn County, the other three were all in McKenzie County.

Also joining these two global giants in the top 10 was Marathon Oil (MRO -1.01%) with the sixth largest recent well, which was in Mountrail County. Finally, Halcon Resources (HK) also made the list with the seventh and tenth largest wells, both of which were in Dunn County. When looking at the list, it is dominated by McKenzie County which not only had the top well, but four of the top ten overall. Dunn County was next on the list with three of the ten wells, while Mountrail County claimed two top wells.

That is good news for Halcon, which has a nice position in these oil rich counties. With 130,000 acres overall, the largest portion of its operated acreage is in Williams County. However, it does have acreage in the really oil rich areas of both McKenzie and Dunn Counties as well. Marathon should also continue to do well as it has a larger overall acreage position at 390,000 net acres, which are fairly well concentrated in Dunn and Williams Counties. 

One name that didn't crack the top ten, but should be on the radar of investors is Kodiak Oil and Gas (NYSE: KOG). The company, which is solely focused on the Bakken, has a 196,000 acreage position in North Dakota with the largest portion of that in McKenzie County, as well as a solid position in Dunn and Williams Counties. In fact, the company recently bulked up on its position both in McKenzie and Williams Counties in a $660 million deal. Its presence in these oil rich counties means that Kodiak should produce some really nice oil wells in the future.

The key takeaway for investors is that when it comes to investing in oil, the mind-set needs to be similar to investing in real estate as location can be the difference between a gusher and a dry hole. These five companies have some of the best positions in the most oil rich counties of North Dakota's Bakken. By picking the right locations these companies will reward investors for years to come, especially as the price of oil remains high.