EOG Resources Inc (EOG), Kodiak Oil & Gas Corp (USA) (KOG): Oil Keeps Pouring out of the Bakken

Few companies though are as levered to the Bakken as Kodiak Oil & Gas Corp (USA) (NYSE:KOG) and Continental Resources, Inc. (NYSE:CLR). All of Kodiak Oil & Gas Corp (USA) (NYSE:KOG)’s capital this year will be devoted to developing its Bakken acreage. The company expects to spend $740 million to drill about 75 net wells. This should boost the company’s production from an average daily rate of 14,400 barrels of oil equivalent last year to between 29,000 and 31,000 barrels of oil equivalent per day this year before taking into account its recent acquisition.

Meanwhile, Continental has ascended to the top of the production list as the company produced 77,000 barrels of oil per day last quarter. With the top lease position in the play at 1.2 million net acres, Continental has a massive opportunity to grow its production in the future, with the potential for drilling up to 15,000 wells in the region. The company is among the lowest-cost producers with per-well costs now down to just $8.3 million.

Bakken oil and gas companies are able to produce more oil by expending less capital, which will really drive improvements in the overall rates of return. Production growth is important, but without generating profits, that growth is of little value to investors. The good news is that the trend of lower costs and increased production looks like it will deliver significant long-term profits for investors.

The article Oil Keeps Pouring out of the Bakken originally appeared on Fool.com.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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