It's well known that the Bakken shale is producing copious amounts of oil and gas. But what might be less known is how individual investors can capitalize on this burgeoning region.

Over the last 10 years, the advancements in horizontal drilling and hydraulic fracturing have made the deposit economically viable. Improvements continue to be made on this front, and as a result oil production per rig has typically increased year over year. Currently North Dakota is one of the top oil- and gas-producing states and boasts an ultra-low unemployment rate of 3% as a result.

The top leaseholder in the Bakken region is Continental Resources (NYSE:CLR), which attributes a majority of its production to the formation. Continental's Bakken production totaled 93,335 barrels of oil equivalent per day in the fourth quarter of 2013, an increase of 38% compared to Q4 2012 as operating costs continued their trend lower.

Positive results from the Bakken region prompted Harold G. Hamm, chairman and CEO, to declare, "the foundation of our plan is an unmatched inventory of oil and liquid-rich assets in the Bakken play of North Dakota and Montana and in the South Central Oklahoma Oil Province, or SCOOP.".

To support this goal, projected capital expenditures for the Northern region, which includes the Bakken and the Red River units, will total about $2.9 billion for 2014.

Over the last year, Continental's stock is up 86% and may seem a tad expensive with a P/E of 33; but future projections seem to justify this premium. Analysts are anticipating $6.95 in earnings per share for FY 2014, a 30% bump over FY 2013.

EOG Resources (NYSE:EOG) is not only one of the top leaseholders and producers in the Bakken shale, it is also the largest producer in the Eagle Ford shale. With technological advancements improving productivity and reducing costs for tight-oil extraction, EOG finds itself well positioned in the two largest tight-oil plays in the U.S.

Source: EIA

Production in these two regions has skyrocketed lately, much to EOG's benefit as well as its shareholders, who find the stock up 82% over the last year. The valuation looks a bit high with a P/E of 25, but EPS projections for increases of 18.5% in FY 2014 and 15.5% in FY 2015 should give investors some comfort.

We could continue with a top-down analysis of the players in the Bakken, but at this point it might be interesting to focus on a smaller player that has a unique strategy for this region. Northern Oil and Gas (NYSEMKT:NOG) is a non-operating participant in this region.

The company's strategy is simple: It lets its partners operate drilling rigs on leased land and maintain minority working interests in the wells. The advantages include known costs and insulation from operational risks. Those risks can be numerous: material shortages, adverse weather, equipment malfunctions, spills, ruptures, legal compliance, fires, blowouts, uncontrollable flows, geological considerations, etc. A diverse group of business partners ensures that problems encountered by one driller will have a minimal impact on Northern's overall performance.

Northern Oil and Gas is also a pure play, with its portfolio basically confined to the Bakken and Three Forks shale plays. Ongoing technological advancements should continue to increase the amount of recoverable oil per well while lessening drill times and costs for many years to come. With 187,000 net acres in this region and only 107,000 of them currently developed, Northern has the potential to grow through both technological advancements and new drilling operations.

The payoff
The Bakken is booming, and so are well-run companies that are participating in this play. Major oil companies were slow to move into this region, which is now projected to have tens of billions of barrels of oil equivalent. Therefore, the small companies that were the first into this market are poised to capitalize, as are their investors.

James Catlin 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.