Did you ever wish you'd been around for the California gold rush of 1849? Or the Texas oil boom of the early 1900s?
Maybe you can't go back in time, but you don't have to.
The Bakken oil shale boom going on in North Dakota right now is just as big-if not bigger.
Just take a look at what's been happening in Williston, ND, the epicenter of the Bakken oil shale boom.
In Williston, it's like the recession never happened.
Unemployment is under 0.8% -- that's right, less than 1%, far below the national average of 8.2%. And the new oil jobs pay well, too. The average oil worker is making more than $90,000 a year.
The flood of jobs has made Williston the fastest-growing small city in the United States.
Consequently, there was no collapse in home prices in Williston. The inrush of new employees to work the Bakken oil shale boom has actually created a housing shortage.
A one-bedroom apartment that went for $500 in 2005 costs at least $2,000 now. Builders literally cannot build homes fast enough.
The rapid population growth from the Bakken oil shale boom has left many people sleeping in cars and tents. Williston just this week was forced to pass an ordinance that makes it illegal to live in a camper within city limits.
And while other states have been cutting services, shedding jobs and raising taxes, North Dakota is building up the state trust fund and reducing property taxes. All that, and still it projects a $1 billion surplus for its two-year budget.
"This boom is just wild and crazy," Williston Mayor Ward Koeser told Governing magazine last year. "It's more than you can fathom."
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How to Profit from the Bakken Oil Shale Boom
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How to Profit from the "Shale Oil Bubble"
It's true: French, Japanese, and Chinese energy companies cannot seem to get their hands on a big enough slice of U.S. shale oil deposits these days.
However, that doesn't mean this investment frenzy is evidence of a "shale oil bubble."
Instead, it's a classic sign of an investment trend - one that will continue throughout 2012 creating an opportunity for investors to profit.
Consider that in just the past two weeks:
And to hear the mainstream media tell it, these companies are overpaying for access to U.S. shale deposits.
In fact, they claim that has led to astronomical valuations and the formation of a "shale oil bubble."
But that that perception is actually only half right: While the value of shale deposits has skyrocketed, the reality is that the higher prices are fully justified based on the increasing demands for oil and gas.
What's more, the foreign companies that are paying top dollar for access to U.S. shale assets aren't just paying for access-they're also paying for expertise.
"Foreign majors needaccess to technology andexpertise, as well as being able to putsome portion of reserves on their books," said Money Morning Global Energy Strategist and Editor of the Oil & Energy Investor Dr. Kent Moors. "For that they are quite prepared to farm in for a minority position in development projects."
In return, U.S. energy companies get the investment dollars needed to develop costly and complex reserves.
These foreign investments also give U.S. companies the money they need to acquire more land leases and increase their odds of hitting an especially productive gas or oil reservoir known as a "sweet spot."
That, Dr. Moors says, is where the "bubble" talk comes from.
"U.S. operators cannot afford to under-commit and that has led to an inflation in land prices," Moors said. "Those prices are nowrather out of proportion toa NYMEX gas price of $2.60 per 1,000 cubic feet and hugestorage volume dueto amild winter."
Still, the demand curve for gas will eventually move up as a result of increased usage in electricity generation, replacement of crude oil in petrochemicals, and a renewed emphasis on liquefied natural gas (LNG).
These energy companies, therefore, are taking a medium-term view. In short, they believe that once demand and prices begin to rise, these higher land values will be justifiable.
So where do investors fit in?...
To continue reading, please click here...
However, that doesn't mean this investment frenzy is evidence of a "shale oil bubble."
Instead, it's a classic sign of an investment trend - one that will continue throughout 2012 creating an opportunity for investors to profit.
Consider that in just the past two weeks:
- French oil major Total S.A. (NYSE ADR: TOT) invested $2.3 billion in Chesapeake Energy Corp.'s (NYSE: CHK) Utica Shale operation in eastern Ohio.
- China Petroleum & Chemical Corp. (NYSE ADR: SNP), spent $2.2 billion for a 30% stake in five Devon Energy Corp. (NYSE: DVN) shale projects.
- And Japan's Marubeni Corp., a commodities trader, agreed to pay $1.3 billion for a stake in Hunt Oil Co.'s Eagle Ford shale property in Texas.
The Reality Behind the Shale Oil Bull Market
That's a clear sign to investors that interest in shale deposits among foreign energy companies is beginning to heat up.And to hear the mainstream media tell it, these companies are overpaying for access to U.S. shale deposits.
In fact, they claim that has led to astronomical valuations and the formation of a "shale oil bubble."
But that that perception is actually only half right: While the value of shale deposits has skyrocketed, the reality is that the higher prices are fully justified based on the increasing demands for oil and gas.
What's more, the foreign companies that are paying top dollar for access to U.S. shale assets aren't just paying for access-they're also paying for expertise.
"Foreign majors needaccess to technology andexpertise, as well as being able to putsome portion of reserves on their books," said Money Morning Global Energy Strategist and Editor of the Oil & Energy Investor Dr. Kent Moors. "For that they are quite prepared to farm in for a minority position in development projects."
In return, U.S. energy companies get the investment dollars needed to develop costly and complex reserves.
These foreign investments also give U.S. companies the money they need to acquire more land leases and increase their odds of hitting an especially productive gas or oil reservoir known as a "sweet spot."
That, Dr. Moors says, is where the "bubble" talk comes from.
"U.S. operators cannot afford to under-commit and that has led to an inflation in land prices," Moors said. "Those prices are nowrather out of proportion toa NYMEX gas price of $2.60 per 1,000 cubic feet and hugestorage volume dueto amild winter."
Still, the demand curve for gas will eventually move up as a result of increased usage in electricity generation, replacement of crude oil in petrochemicals, and a renewed emphasis on liquefied natural gas (LNG).
These energy companies, therefore, are taking a medium-term view. In short, they believe that once demand and prices begin to rise, these higher land values will be justifiable.
So where do investors fit in?...
To continue reading, please click here...
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