Kodiak Oil & Gas Corp (KOG): The Bakken Is Still Roaring

Middle East conflicts

All of these players are very sensitive to oil prices, as they need $90-plus prices to keep building out infrastructure, paying off debt, and drilling.

Middle East conflicts can affect oil prices. Case in point: the United States and Russia recently signed an unexpected accord to reach out to both the rebels and loyalists in Syria to end the bloodshed. This was a move hailed by most, but it hasn’t really changed anything, as both sides remain bitter and entrenched in their own beliefs. You don’t easily forget 70,000 slaughtered civilians (estimated total deaths in the Syrian war). The Syrian war has the potential to spill over into neighboring countries, pushing oil prices up even further, as Syria is right next to around 35% of the world’s oil production.

The important thing to take away from this is that Syria is a longstanding ally of Russia; if it were to go to the bargaining table, Syria would listen to Russia, if anyone. But most likely the fighting will keep going on until one side gets the upper hand (probably the rebels in the end, with the backing of the U.N. and U.S.) and kicks the other out. While the fighting intensifies, however, oil prices will head higher. Consider this: even after the accord was signed, West Texas Intermediate was still trading at over $96 a barrel.

Final thoughts

The Bakken is still alive and well, with players big and small experiencing major production gains. These production gains, coupled with cheaper ways (such as multi-pad drilling and better water infrastructure) to extract domestic oil and gas, will lead to large returns in the future.

The article The Bakken Is Still Roaring originally appeared on Fool.com.

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