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Western Standard Energy (WSEG: Summary, Messages, Articles) is a exploration stage oil firm focused on extracting crude oil and natural gas from the Bakken Formation that runs through Montana, North Dakota and Canada. The area is believed to hold some of the largest reserves of crude oil in the United States after Alaska’s Prudhoe Bay and the oilfields of West Texas. In fact, it is speculated that there are potentially 503 billion barrels of oil on 25,000 square miles of the Bakken Formation. That amount surpasses that of Saudi Arabia’s reserves by five times and is believed to be over 200 times the total reserves in the U.S.

Western Standard is currently engaged in a natural gas project in Montana and an oil project in North Dakota. The combined value of the two projects is estimated to be almost $2.9 billion. In North Dakota, the company has seven prospects in area known as the Lodgepole Reef. Conoco Phillips, one of the largest U.S. oil producers, is currently drilling in the Lodgepole Reef and it is reported that Conoco Phillips claims the area is one of its economically viable. It is estimated that Conoco Phillips will eventually be able to extract 2,000 barrels a day from the region.

In Montana, Western Standard has projects in what is called the Starbuck East Project, which is in north-central Montana. Some estimates say that there is 6.19 trillion cubic feet of natural gas available in this region of the state. Western Standard may have access to almost 220 billion cubic feet of this gas on the Starbuck East Project, which would be worth $1.1 billion to the company. To expand its expertise and management credibility, North Dakota-based Western Standard announced in July it hired a key executive from Chevron and another from Conoco.

Shares of Western Standard closed Wednesday at 17.5 cents. The shares of the $25 million company have traded between 16 cents and 88 cents over the past 52 weeks. Western Standard has the potential to realize $3 billion of worth assets from its ventures on the Bakken Formation. Of note to investors, Chief Executive Officer Dan Bauer owns nearly 19 million of his company’s shares.

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