The days of low oil prices are coming to an end. And with that shift comes a whole host of opportunities for oil investors.
With this rebound in prices, the following stocks are sure to skyrocket and grow over the next several years.
These companies all have strong footholds in the industry and will continue to sell at bargain prices until oil fully returns to its former glory…
1. Pioneer Natural Resources Company (NYSE: PXD)
Current Price: ~$246.60
Market Cap: $57.52 Billion
Dividend Yield: 6.66%
Pioneer Natural Resources Company is a large, Texas-based independent oil and gas company. It has a strong track record of delivering industry-leading production and reserve growth through onshore, unconventional oil and gas resource development in the U.S.
Pioneer focuses on the development of two oil-rich shale plays in South Texas: the Spraberry-Wolfcamp play in the Permian Basin and the Eagle Ford Shale. Pioneer is the largest producer in the Spraberry-Wolfcamp play and a top operator in the Eagle Ford Shale. It’s also a large natural gas producer in the West Panhandle gas field in Texas.
On October 11, 2023, ExxonMobil announced that it would be acquiring Pioneer in an all-stock transaction valued at $59.5 billion. The acquisition is expected to close in the first half of 2024. We will be monitoring this situation closely here at Energy and Capital moving forward.
2. Occidental Petroleum Corporation (NYSE: OXY)
Current Price: $44.36
Market Cap: $16.40 Billion
Dividend Yield: NA
Occidental's core operations revolve around the exploration, development, and production of oil and natural gas reserves. The company's operations are spread across various regions, including the United States, the Middle East, and Latin America.
Occidental has been actively involved in efforts to reduce carbon emissions and has developed technologies for carbon capture, utilization, and storage (CCUS). In fact, Oxy recently closed a deal to acquire Carbon Engineering Ltd. for $1.1 billion for their Direct air Capture technology. The company also has a significant presence in the Permian Basin and will be taking advantage of the massive untapped potential.
On October 3, 2023, OXY and ADNOC announced that they would commence a preliminary engineering study of a Direct Air Capture facility in the UAE. The facility would have the capacity to capture and store 1 million metric tons of carbon dioxide per year. Overall, OXY is a strong company with a bright future. The company is well-positioned to benefit from the continued growth of the global oil and gas market, and it is also leading the way in developing new technologies to reduce greenhouse gas emissions.
3. Devon Energy Corporation (NYSE: DVN)
Current Price: ~$47.60
Market Cap: $30.48 Billion
Dividend Yield: 3.455%
Devon Energy Corporation is an independent energy company that’s engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs).
The company’s operations are concentrated in various North American onshore areas in the U.S. and Canada.
On October 18, 2023, Devon announced that it had entered into an agreement to acquire all of the outstanding shares of Validus Energy, a privately held oil and gas company with operations in the Permian Basin, for $1.8 billion. The acquisition is expected to close in the fourth quarter of 2023.
Since 2008, Devon has more than doubled its onshore North American oil production and has a deep inventory of development opportunities to deliver future oil growth.
On August 1, 2023, Devon reported second-quarter 2023 earnings of $2.2 billion, or $4.71 per share. This was up from $1.0 billion, or $2.12 per share, in the second quarter of 2022.
In addition to the above, here are some other notable developments at Devon:
- Devon is expanding its presence in the Delaware Basin, which is one of the most prolific oil and gas producing regions in the United States.
- They are also investing in renewable energy, including solar and wind power.
- Devon is committed to social responsibility and is working to improve the lives of people in the communities where it operates — something that is being taken increasingly seriously in the oil and gas industry.
4. EOG Resources, Inc. (NYSE: EOG)
Current Price: ~$130.97
Market Cap: $76.26 Billion
Dividend Yield: 2.51%
EOG Resources is one of the largest independent (non-integrated) crude oil and natural gas companies in the U.S. It has proved reserves in the U.S., Trinidad, the U.K., and China.
The company focuses on integrating technology such as 3D seismic, core analysis, and microseismic to develop proprietary petrophysical models. These models inform EOG’s execution of precision horizontal targeting and customized advanced completions.
As of year-end 2018, EOG’s total estimated net proved reserves were 2,928 million BOE. This was comprised of 52% crude oil and condensate, 20% NGLs, and 26% natural gas. Around 98% of these reserves came from the U.S., 1% came from Trinidad, and the last percent from other countries abroad. The company’s average daily production in 2018 was 399,900 million BPD. At year-end 2018, it had approximately 2,800 employees.
The company produced $637 million in free cash flow in Q4, letting it finish the year strong.
5. Range Resources Corporation (NYSE: RRC)
Current Price: ~$34.69
Market Cap: $8.37 Billion
Dividend Yield: 0.93%
Formed in 1976, Range Resources Corporation is a leading U.S. independent natural gas, NGL, and oil producer with operations focused in stacked-pay projects in the Appalachian Basin and north Louisiana. Since 2000, the company pursues an organic growth strategy that targets high return, low-cost projects within its large inventory of low-risk development drilling opportunities. It has been recognized as the pioneer of the Marcellus Shale and is one of the most active drillers in Pennsylvania.
In 2022, Range Resources produced an average of 2.1 billion cubic feet of natural gas equivalent per day and generated $2.9 billion in revenue.
Range Resources is committed to reducing its environmental impact. The company has set a goal of achieving net-zero emissions by 2050. To achieve this goal, Range Resources is investing in a number of initiatives, including carbon capture, utilization, and storage (CCUS) technology.
6. Enterprise Products Partners L.P. (NYSE: EPD)
Current Price: $27.58
Market Cap: $69.88 Billion
Dividend Yield: 7.28%
Unlike our other plays on this list, Enterprise Products Partners is a pipeline stock. The company is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products, and petrochemicals.
Its services include natural gas gathering, treating, processing, transportation, and storage; NGL transportation, fractionation, storage, and import and export terminals; crude oil gathering, transportation, storage, and terminals; petrochemical and refined products transportation, storage, and terminals; and a marine transportation business that operates primarily on the U.S. inland and Intracoastal Waterway systems.
Enterprise recently announced that the first of the three processing trains at its Orla natural gas-processing complex had begun service. Upon the completion of the final two trains, the capacity at the complex will be 1 billion cubic feet per day inlet gas and around 150 million bpd of NGL production. The company recently announced that its Shin Oak NGL mainline is in service, able to hold 250,000 BPD.
On May 31, 2023, Enterprise Products announced the completion of an expansion of its Acadian Haynesville Extension natural gas pipeline, the first of $3.8 billion of organic growth capital projects that are scheduled to be completed and begin service in 2023.
7. TC Energy Corporation (NYSE: TRP)
Current Price: ~$34.09
Market Cap: $34.08 Billion
Dividend Yield: 8.10%
TC is a major energy company stationed in Calgary, Alberta. The company develops crude and natural gas pipelines, running them throughout North America. The company also generates energy, dealing with about 5700 megawatts.
It lays about 60,000 miles of pipeline, stores over 650 billion cubic feet of natural gas, and has the capacity to power over six million households. Although the company is based in Canada, they've recently expanded operations into the U.S. and Mexico.
TC Energy serves a large number of citizens. The company provides more than 25% of North America's natural gas demands for fuel, heat, and power generation while its Keystone Pipeline System delivers over 20% of Western Canada's crude oil export.
The Future of Oil
The perfect storm for higher oil prices is taking shape right before our very eyes.
Over the last few years, there’s been a severe lack of investment by oil companies. This, along with recent disruptions in Libya, Venezuela’s oil industry being on the verge of collapse, and looming Iranian sanctions, means that we could be headed toward an oil supply crunch. And as demand continues to outpace supply, oil prices will continue to rise.
In response to the shortage, OPEC and Russia have agreed to boost production between 400,000 and 600,000 bpd. And the U.S. continues to dominate the space with its crude production expected to exceed 12 million bpd per day in 2019.
All this means that your role as an investor is simple: buy oil and make money.
The companies above are all are solid gas and oil stocks that are sure to give you good returns as oil continues to rebound.
Stock prices are as of close on October 24, 2023.