Well known energy analyst Kurt Wulff joins Financial Sense Newshour to discuss the companies benefitting from the shale boom in Texas, North Dakota, and elsewhere.
“In the last two years, oil and gas production in the U.S. has gone up by more than a million barrels a year, and that’s almost unbelievable in a global context. All the action in the world energy business is right here in the U.S. and it’s all tied to fracking and horizontal drilling,” he said.
The two areas producing the most oil and gas currently are the Bakken and Eagle Ford shale formations. Since many of the companies drilling in that area have already seen a huge run-up in price, Kurt said that investors may want to consider another shale play that’s starting to see a lot more action and “that might be the biggest of all.”
Kurt, who's advised Carl Icahn and T. Boone Pickens, said that area is the Permian Basin of West Texas.
“Every part of the Permian Basin is growing now. Their volumes are going up,” he told Financial Sense Newshour.
In specific, Kurt said that investors could gain exposure to the area through a number of royalty trusts, like Permian Basin (PBT) and Sabine Royalty (SBR), which also offer extremely attractive dividends.
"[T]he whole Permian Basin is growing and if you’ve got a scattered ownership of properties, you’ll participate in this. We can see this in the royalty trusts in that their volumes are moving up. They’re not moving up by a lot, but they’re moving up some…and if you’re in a big old area like the Permian Basin, you’re going to get some of that benefit from the shale play.”
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