When you think of the biggest oil-producing regions in the United States, the usual suspects come to mind. These might include the deep-water Gulf of Mexico, or onshore plays like the Permian Basin in the southern part of the country. While these are absolutely major oil-producing areas, one that often gets forgotten is the Bakken oil field in the northwestern United States.
The Bakken region stretches across North Dakota and Montana. It's one of the top oil-producing fields in America, which is even more impressive since production didn't begin until only recently. That's because, while the field was first discovered more than 60 years ago, the oil was extremely hard to reach. Fortunately, thanks to revolutionary drilling techniques, production is finally in full swing.
Bakken production full steam ahead
EOG Resources depends on the United States, which very much includes Bakken oil. Approximately, 94% of EOG's 2.1 billion barrels of oil equivalent reserves are located in the United States. Crude oil is a huge component of EOG's portfolio, and its crude oil production soared 40% last year. Going forward, management expects this superb growth to continue, as the company projects 27% crude oil production growth this year, because it's going to drill as many as 80 new wells in 2014.
The vast majority of Kodiak's operations are focused on the Bakken field, more specifically in the Williston Basin in Western North Dakota and Eastern Montana. Most of its $775 million in 2013 capital expenditure plans were allocated to its Williston Basin oil and gas operations. This paid off, since Kodiak's oil and gas sales more than doubled last year to $904 million. Sales volumes clocked in at 10.6 million barrels of oil equivalents, and oil represented 95% of the company's revenue last year.
One more oil major getting in on the Bakken action
It's not just smaller players that are getting rich from Bakken Oil. ConocoPhillips, which is the biggest independent exploration and production in the United States, saw strong growth in its Lower 48 operating segment last year. This was due in no small part to Bakken oil.
In all, Conoco increased oil and gas production by 7% in its Lower 48 portfolio last year. This looks fairly modest on the surface, but when you look deeper, its oil production was impressive. Conoco's oil production rose 24% last year, and production in the Bakken field itself soared 60%. More specifically, production hit 30,000 barrels per day in the Bakken in 2013.
Going forward, Conoco plans to keep growth going. Management believes there's potential to take production up to 50,000 to 60,000 barrels per day over the next few years. In addition, the company continues to add reserve replacement in the Bakken, which will only strengthen its portfolio down the road.
Banking on the Bakken
Oil majors large and small are cashing in on all the Bakken field has to offer. Discovered decades ago, Bakken oil is only now hitting the scene since production was nearly impossible for so many years. Thanks to new drilling techniques, oil companies such as EOG Resources, Kodiak Oil & Gas, and ConocoPhillips are finally able to reach the ocean of gas sitting under the ground in North Dakota and Montana.
Each company has devoted huge amounts of financial resources to acquiring acreage in the region and drilling new wells. It's already paying off in the form of soaring production and rising revenue, which is set to continue, thanks to the tantalizing production growth over the next several years.
These oil producers need the pipelines these companies provide
Bob Ciura has no position in any stocks mentioned. The Motley Fool owns shares of EOG Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.