One of the story lines in the oil industry this year has been that the Permian Basin is running out of pipeline space. Because of that, the profitability of drillers in the region has suffered, as has their near-term growth prospects.

But because most of the focus has been on the issues plaguing the Permian, investors have missed the fact that the Bakken Shale has come roaring back. That was evident once again in the third quarter as drillers that are focused on the region delivered strong results. That's worth noting since the Permian's problems will likely drag out for the next year, which could potentially turn the Bakken back into a hot spot for growth-focused investors.

A dirt road leading to a drilling rig that's just over the horizon.

Image source: Getty Images.

The Bakken Shale gusher

Continental Resources (CLR) was one of several Bakken-focused drillers to post strong third-quarter results. The oil producer reported an adjusted profit of $0.90 per share, which beat analysts' expectations by $0.08. One of the main fuels was the company's strong results in the Bakken, where production has surged 23% over the past year due to a ramp-up in drilling as well as strong initial well productivity.

Continental Resources sees plenty more growth ahead. The company expects to complete 70 more Bakken wells by year-end, up from 42 in the third quarter, which puts it on pace to grow its overall production by 20% to 24% versus last year's average. Meanwhile, Continental Resources now estimates that the industry can ultimately recover twice as much oil from the Bakken in the future, giving producers in the region ample resources to continue growing.

A profit shocker

Hess Corp (HES 0.08%), meanwhile, stunned analysts in the third quarter by reporting an adjusted profit of $0.38 per share, which blew past expectations that it would merely break even. Several factors fed the company's expectation-crushing quarter, including higher oil prices, a big drop in costs, and a surge in production from the Bakken. Overall, Hess' Bakken output rose 15% versus the year-ago period to 118,000 barrels of oil equivalent per day (BOE/D).

Hess expects the Bakken to continue driving fast-paced growth in the coming years. The company currently projects that it can grow its Bakken output at a 15% to 20% compound annual growth rate all the way through 2021, at which time its production should average 175,000 BOE/D. Meanwhile, it has a large enough inventory in the region to continue drilling at a steady pace for 15 years, assuming oil averages $60 a barrel.

A oil pump in a field.

Image source: Getty Images.

A gusher of profits

Whiting Petroleum (WLL) also put analysts to shame when it reported third-quarter results. The Bakken-focused driller posted an adjusted profit of $0.92 per share, which smashed analysts' expectations by $0.31. Keying the oil company's strong quarter was a combination of higher oil prices and healthy production growth from the Bakken.

Companywide output rose 13% year over year -- and up 2% from the second quarter -- entirely due to the company's position in the Bakken, where it completed 45 wells during the quarter versus no wells in the DJ Basin, which is its other core area. Whiting Petroleum expects the Bakken to continue powering growth in the near term, anticipating that production will rise another 5% during the fourth quarter as it completes more Bakken wells. Meanwhile, with more than 1,000 top-tier drilling locations remaining, Whiting Petroleum has plenty of fuel to continue growing at a fast pace in the coming years.

The Bakken growth engine is just revving back up

With oil prices on the upswing, producers have been ramping up their Bakken drilling activities over the past year. That decision paid off during the third quarter and could continue doing so in the next year. That makes it a compelling area for investors to consider, especially since pipeline problems will likely neutralize the Permian's growth engine for much of 2019.