Halliburton (NYSE: HAL) Surges on U.S. Oil Revival

Keith Kohl

Written By Keith Kohl

Posted July 7, 2014

There was some incredible — but not surprising — news released by the Energy Information Administration in its Petroleum Supply Monthly report for June.

Here’s exactly what it showed…

chart 1 blog 77

In April 2014, U.S. crude production was at 8.4 million barrels per day, and of this total, 48% — nearly half — came from the Bakken in North Dakota and the Eagle Ford and Permian Basin in Texas.

By now, even the most persistent shale skeptics and fractivists have to realize that we owe practically all of our oil production growth to tight oil plays.

That’s right; the Permian, Eagle Ford, and Bakken are responsible for almost 4 million barrels of oil every single day. It’s a feat that simply wouldn’t be possible without the advancements made in hydraulic fracturing and horizontal drilling.

That’s about 4 million barrels of oil being produced in two states, compared to just one million barrels per day they produced together in 2010.


For the record, if these two states were a single country, it would be the sixth-largest oil producer in the world. They would even be ahead of OPEC heavyweights like Iran, the UAE, and Iraq.

You see, this news is only the latest milestone to be reached by these tight oil plays. It wasn’t too long ago that North Dakota’s crude output broke above 1 million barrels of oil per day.

So where do we go from here?

Well, it’s only a matter of time before the 9 million bbls/day threshold is breached.

Keep in mind, however, that even though we are only 600,000 barrels per day away from that number, it won’t be so easy to boost production. The question now is how efficient the industry can become while developing these plays.

Shares of Halliburton (NYSE: HAL) have surged approximately 40% this year — outperforming the S&P 500 by nearly fivefold! As you know, this company provides an array of services for the industry. Basically, they have a foothold in the exploration, development, and production of oil and gas resources all over the world.

Last Tuesday, investors were rewarded with a new record high for share prices.

Truth is, Halliburton is actually in a prime position. Remember, the game from here on out isn’t necessarily about how much oil is underground; the continuing success of the U.S. oil boom isn’t hinged on the discovery of a new massive oil field. Rather, it’s about who will utilize the best technology available to cut both the time and money it takes to drill and complete these shale wells.

Make no mistake — that’s how we’ll get to 9 million barrels per day by the end of this year.

And by the end of 2015? The sky is the limit.

Here’s to hoping.

Until next time,

Keith Kohl

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