NEW YORK (TheStreet) -- References to oil rig workers sleeping in the beds of their pickup trucks in McDonald's parking lots have become synonymous with the oil boom of North Dakota.
However, all acreage is not created equal in the oil and gas exploration and production (E&P) business, and that's becoming a much more important investing dictum -- and dividing line for E&P stocks -- in one of the biggest U.S. oil booms in history.
Recent earnings from a wide swath of E&P companies operating in North Dakota show how quickly and broadly strategies to tap the North Dakota play are diverging. Crude oil prices have moved up significantly this year from what was already attractive pricing for E&Ps in 2011. However, costs in North Dakota continue to be a headwind for many E&P companies. Even if costs per well in the North Dakota Bakken have reached a peak between $9 million and $10 million, the costs are not declining.
As E&P stocks continue to ride the crest of high oil prices, it becomes more important for energy stock investors to weigh potential reward from North Dakota drilling versus too much reliance by any one E&P on what remains a high cost play.
|More and more U.S. oil is coming from North Dakota, but energy stocks may be getting too much credit for the boom relative to the costs.|
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