Bakken Oil Scores First Victory Against OPEC

NEW YORK (TheStreet) -- Score one for U.S. energy independence at a time of escalating tensions between Iran and the West.

On Tuesday afternoon, North Dakota, home to the booming Bakken oil shale, announced that it had scored its first victory over OPEC. Bakken production in November passed the mark of half a million barrels of oil per day, at about 510,000 barrels, surpassing Ecuador.

It's probably worth pointing out Ecuador is the "Rhode Island" of OPEC. In the same way that metaphors looking to make just about any small land area in the world look big use the comparison of Rhode Island, Ecuador is the only OPEC nation that the Bakken can rival, representing 0.6% of OPEC reserves, or roughly 476,000 barrels daily.

Next in line for the Bakken in its bid to overtake all the OPEC nations? For comparison purposes, second-to-last among OPEC nations in production is Qatar, at 733,000 barrels of oil daily. Algeria, at 1.1 million barrels per day, is next in line after Qatar.

At the top end of the OPEC list are Venezuela, producing 2.8 million barrels daily; Saudi Arabia, at over 8 million barrels of oil produced daily; and of course, our current geopolitical foe, Iran, producing more than 3.5 million barrels per day, according to OPEC data.

The leapfrog over Ecuador leaves only 11 nations to go before the Bakken overtakes the entire OPEC oil cartel.

North Dakota noted that the production milestone is an increase of about 22,000 barrels from October and an increase of more than 150,000 barrels a day from one year ago.

"Oil production in the state has increased anywhere from 8,000 to 40,000 barrels a day, every month since June," Oil and Gas Division director Lynn Helms said in a release.

"This is big news for the state and the country. A half a million barrels a day represents about 10% of U.S. production. That's enough oil to displace imports from Iraq or Columbia," Helms said.

For stock market investors, it's one more bullish sign for Continental Resources(CLR), the biggest Bakken E&P pure play and among the exploration and production stocks rallying to start 2012. Shares of Continental are up 12% year to date.

There are several E&P stock strategies to pursue amid the energy rally, but the most straightforward market call may be on Bakken stocks like Continental at a time of high crude prices.

Andrew Coleman, analyst at Raymond James, has a strong buy on Continental. The stock is currently trading slightly below its 52-week high of $77.50, at $74.83 on Wednesday morning.