The Bakken formation stretches over 25,000 square miles beneath North Dakota, Montana, Saskatchewan, and Manitoba. According to Continental Resources, the Bakken/Upper Three Forks formations hold an estimated 577 billion barrels of original oil in place. That means a 3.5% recovery factor translates into 20 billion barrels of recoverable light oil. Thanks to Bakken shale oil, North Dakota is on track to become the second highest producing oil state in the US after Texas.
We are looking for Canadian dividend paying oil and gas companies that derive a substantial percentage of their production from the Bakken formation. These companies are preferably light oil focused maintaining high working interest and operatorship in a large contiguous land base prospective for Bakken light oil in Saskatchewan, North Dakota and Montana.
Crescent Point Group cpg.to $9.13 [-0.02]
Corporate Production: more than 150,000 boed (91% liquids)
Annual dividend: $2.76/share
Crescent Point is a yield-paying, oil-focused senior exploration and production company. CPG is a leader in tight oil development and has a dominant position in the Saskatchewan Bakken and Shaunavon oil plays, and has recently moved into new tight oil plays in Alberta, North Dakota and Utah. Bakken production accounts for more than 64,000 barrels of light oil per day from its SE Saskatchewan and North Dakota acreage.
Crescent Point holds more than 1,100 net sections of Bakken acreage with an estimate 4.6 billion barrels of OOIP in SE Saskatchewan. The company also holds moe than 100 net sections prospective for North Dakota Bakken/Three Forks oil. CPG assembled an inventory in excess of 7,700 net drilling locations including more than 4,000 net low risk Bakken drilling locations.
Crescent Point also provides exposure to major oil resource plays such as the Shaunavon, Uinta, Swan Hills and Viking.
Lightstream Resources LTS.TO $0.115 [+0.000]
Corporate Production: more than 35,000 boed (76% liquids)
Annual dividend: $0.00/share (suspended in January 2015)
Lightstream (previously Petrobakken) is a an oil-focused intermediate exploration and production company with its assets primarily oriented in the Bakken and Cardium light oil plays in the Western Canadian Sedimentary Basin. Bakken production accounts for more than 13,000 barrels of light oil per day from its SE Saskatchewan acreage. The company’s drilling inventory of more than 1,800 net drilling locations includes more than 1,000 low risk development Bakken locations.
LTS holds more than 275 net sections of Bakken acreage with an estimated 1.69 billion barrels of OOIP (Original Oil In Place) – that’s basically the quantity of petroleum contained in known accumulations prior to production. To date, only 5% of the DPIIP was booked as of 2011 in 2P reserves + production to date.
Lightstream also provides exposure to emerging oil plays such as the Nordegg, Montney, Duvernay and Swan Hills.
Enerplus Corporation erf.to $10.86 [+0.01]
Corporate production: more than 96,000 boed (43% liquids)
Annual dividend: $0.60/share
Enerplus is a yield-paying, oil-focused intermediate exploration and production company. Enerplus has a relatively balanced production base from a diversified portfolio of oil and gas properties in the United States and Canada. Key focus assets include Bakken/Three Forks light oil in North Dakota and Montana where it produces more than 20,000 barrel of light oil.
Enerplus holds more than 180 net sections of Bakken acreage concentrated in North Dakota’s Dunn & McKenzie counties and Montana’s Sleeping Giant oil field.
Enerplus also provides exposure to improving natural gas prices through shale gas resource plays such as the Montney, Marcellus, Duvernay and the Deep Basin liquids rich gas.
Finally, the 3 companies presented above have multiple years’ worth of low-risk drilling opportunities. All 3 are evaluating/testing EOR potential (Enhanced Oil Recovery ex: waterflood) on several of their tight oil plays. Make sure to review the hedges of each company as they provide greater stability to the dividend. You should also inspect the payout ratios and balance sheet health for each stock before taking an investment decision. Companies with low debt to cash flow ratio are able to survive short term drops in the price of oil. Remember that when investing in dividend paying oil and gas companies, the biggest risk resides in the volatility of commodity pricing.