Download now: Oil Price Outlook 2024

The New Face of Big Oil

Keith Kohl

Written By Keith Kohl

Posted March 30, 2012

There’s a reason ExxonMobil is a widow-and-orphan stock.

The American energy giant has one of the most recognizable names in the industry, and carries with it a lower risk than most other oil stocks.

After all, the company has successfully increased its annual dividend for the last 29 consecutive years, which carries a certain appeal for investors over the long haul…

Then again, we can think of better options for dividend-seekers — all of which trump Exxon’s modest 2.2% annual yield.

So how does it stack up against our smaller players?

Not very well…xom 3-30

Above, you can see how just two of our latest Bakken stocks have fared against Big Oil’s gains during the last two years. And it’s only getting worse.

The World’s Largest Publicly-Traded Gas Company

Rex Tillerson and friends are in the midst of an identity crisis.

Although the company boasts of having replaced more than 100% of their reserves each year for the last 18 years, a few things have become clear to us…

The first is that this new supply of oil and gas is becoming increasingly expensive. That much became apparent when the company announced its five-year investment plan.

Over the next five years, Exxon intends to spend $185 billion to develop new energy supplies, or about $37 billion per year.

The second is the fact that ExxonMobil is considered one of the world’s top oil companies. We already know they’re no longer the world’s largest publicly-traded oil company. PetroChina stole that crown last year.

Truth is, the supermajors are slowly being squeezed out by the world’s top NOCs:

oil cluster of NOCsclick to enlarge image

So does it really come as a surprise that Big Oil is developing a taste for natural gas?

Even today, more than half of Exxon’s proven reserves are from gas, not oil.

And XOM isn’t an anomaly in the industry. Nearly all the supermajors are making a similar shift… and they’re more than willing to pay for it.

It’s the reason Exxon shelled out $41 billion to buy XTO Energy in 2010. Without that deal, they wouldn’t have been able to tout their 209% reserve replacement ratio.

Going forward, we can’t expect Big Oil to outperform the kind of attractive growth stocks we’ve grown accustomed to in the various shale plays here in the United States.

And anyway, there’s a much better opportunity developing…

Beating Big Oil Profits

We’ve mentioned before that technology is the key driver behind our current oil boom.

Investors who caught wind of the combination of horizontal drilling and hydraulic fracturing techniques early enough know the kind of windfall profits that are possible here…

These techniques opened up new shale formations across North America — and generated billions for individual investors throughout the last decade.

This kind of technology can turn a small cap driller into a ten-bagger in a short span of time.

I’ve said before the time is ripe for these new technologies to surface. That’s why I felt a certain vindication when Nick Hodge pulled me aside a few weeks ago to tell me about his latest investment research.

Nick wasn’t talking about some fresh new driller on the scene that hit a gusher…

No, this new investment revolves around an ultra-thin piece of carbon that can vastly improve an oil and gas company’s efficiency in finding oil.

Using this material, companies can effectively power tiny sensors injected into oil and gas wells. Coating the micro-sensors acts as a ‘smart skin,’ allowing producers to potentially find new pockets of oil and natural gas.

To get complete articles and information, join our daily newsletter for FREE!
Plus receive our new free report, How to Play Rare Earth Today

Energy & Capital Members Receive:
Daily commentary and advice from energy investment experts
Access to some of the best oil, gas, and cleantech stock picks around
Foresight on how the future of energy will unfold

Until next time,

Keith Kohl Signature

Keith Kohl

follow basicCheck us out on YouTube!

A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.

Angel Pub Investor Club Discord - Chat Now

Keith Kohl Premium

Introductory

Advanced

Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.