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When the Barnett Sale gas play in Texas was first drilled, drilling started out slow, but then ramped up rapidly once the size and scope of the play was fully understood. The same thing is happening in the Bakken formation.

The Bakken is an oil- and natural gas-rich formation covering a 200,000 square mile area encompassing parts of Montana, North Dakota and Saskatchewan. According to an April 2008 survey by the USGS, it’s estimated to contain as much as 4.3 billion barrels of recoverable reserves.

While initial drilling activity was slow and drill rigs were sparse, it eventually picked up. Rapid growth ensued starting in 2006, and continues to the present day.

The reason production saw such a rapid rise was the introduction of horizontal drilling and fracking, similar to what’s fueled the meteoric rise of other oil and natural gas shale plays.

Take a look at the first graphic below, courtesy of the EIA. The larger the circle diameter, the bigger the well flow. Green circles represent wells where the majority of the output is oil, yellow is a mix, and red is mostly gas.

In 2005, nearly all of the oil drilling was taking place in Montana, on the western side of the play, while most of the gas wells were being drilled in the southern part of the Bakken known as Billings Nose.

Bakken Shale Production 2005

Now take a look at a snapshot of Bakken drilling activity as it existed at the end of 2010. What a difference a few years makes.

Bakken Shale Production 2010

The Parshall Field was discovered in 2006. It’s located in the eastern-most part of the Bakken. It initiated a huge shift towards drilling in the oil-rich part of the Bakken field. As a result, the eastern side of the play is where a lot of the action is.

Oil production began to skyrocket starting in 2003, and hasn’t looked back. It now far overshadows the natural gas production from the Bakken.

It’s all turned North Dakota into America’s fourth largest oil producer. Only Texas, California and Alaska produce more. It’s most been due to the gains in the Bakken.

Based on data from North Dakota’s Department of Mineral Resources, total production for the state averaged 445,000 barrels of oil per day (bopd) in August 2011. That’s a 29 percent increase in just eight months time.

Even more impressive, back in 2000, Bakken production averaged just 2,000 bopd. At the end of 2010, it was more than 260,000 bopd. Over 90 percent of Bakken production is from horizontal wells, and that percentage will only increase as more are drilled.

Who Are the Big Bakken Players?

One of the biggest oil drillers and producers in the Bakken is Continental Resources, Inc. (NYSE: CLR). Seventy percent of Continental’s reserves are located in the Bakken.

Brigham Exploration Company (Nasdaq: BEXP) is another large Bakken driller. It recently announced it’s being acquired by Statoil ASA (NYSE: STO), the Norwegian oil and gas giant.

A number of shareholder lawsuits have sprung up subsequent to the announcement, contending that the $36.50 a share offer price is far too low. It’s a great example of how desperate other companies outside the United States are to find additional sources of oil.

Another, smaller but no less active producer is Whiting Petroleum Corporation (NYSE: WLL). Whiting is active in the Sanish Field in the northern part of the Bakken play. It also has active exploration activities underway in the Collingswood Shale formation in northern Michigan, and in the Permian Basin in western Texas.

Investors wanting to participate in the continued growth of the Bakken might want to consider shares of either Continental or Whiting. Both will be drilling on their Bakken acreage for years to come. As oil prices continue to rise, oil companies share prices will rise right along with them.

Disclosure: None

Source: How To Play America's Fourth Biggest Oil Producing State