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: $146.10
Market Cap: $24.07 Billion
Dividend Yield: 0.45%
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.
Pioneer's average daily production from continuing operations was around 283,000 barrels of oil equivalent (BOE) — all from their Permian Basin operations. Their 2019 guidance is for the Permian Basin operations to produce between 302,000 and 317,000 BOE. The company ended the 2018 fourth quarter with a 26% year-over-year (YoY) growth and proved reserves of 977 million BOE as of year-end 2018.
2. Continental Resources, Inc. (NYSE: CLR)
Current Price: $44.36
Market Cap: $16.40 Billion
Dividend Yield: NA
Continental Resources is one of the top 10 largest independent oil producers and a leader in America's energy renaissance.
Based in Oklahoma, the company is the largest leaseholder and one of the largest producers in the nation's premier oil field, the Bakken play of North Dakota and Montana.
Continental also has significant positions in Oklahoma. This includes its SCOOP Woodford and SCOOP Springer discoveries and also the STACK and Northwest Cana plays.
With a focus on the exploration and production of oil, Continental has unlocked the technology and resources that are vital to America’s energy independence and leadership in the New World oil market.
On February 18, 2019, Continental announced its 2018 full-year results.
Production totaled 298,190 BOE per day (boepd). That's a 23% year-over-year change. The company's production guidance for oil is expected to be 190,000 to 200,00 barrels of oil per day (BOPD) — 13%–19% YoY — with a 790,000 to 810,000 million cubic feet per day (MCFPD) — 1%–4% YoY— in natural gas.
The company’s Bakken production continues delivering record results.
Continental President Jack Stark said:
We are clearly seeing a structural uplift in well performance across the Bakken field. Combined with improved differentials and low production costs, our optimized completions are generating some of the best returns we have seen from our Bakken assets. With over 4,000 locations in inventory, the future value to be realized by Continental and its shareholders from our Bakken assets is tremendous.
The company has initiated a multi-zone oil development project in the SCOOP discovery called Project Springboard. As of February 19, Springboard has 22 wells producing oil; over 13,300 BOE per day.
Its third and fourth quarter 2018 results put it on pace to add 10% to CLR's net oil production in 2019. The company is on track to develop an additional 45 wells this year: 18 Springers and 27 Woodford/Sycamores.
3. Devon Energy Corporation (NYSE: DVN)
Current Price: $31.66
Market Cap: $13.72 Billion
Dividend Yield: 1.15%
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.
In 2014, the Oklahoma-based oil and gas company spent a whopping $6 billion to acquire 82,000 acres in the Eagle Ford shale from GeoSouthern Energy. This acquisition was so expensive because it contained some of the most productive wells in the entire play. These wells offer the highest rates of return in all of North America. Since then, the Eagle Ford has been one of the company's best-performing assets.
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 March 1, 2019, Devon released its fourth 2018 quarterly report while giving some figures for its 2018 fiscal year.
In 2018, the company's oil growth rate went up 17% while oil and liquids revenue grew 84%. The company’s 2018 Q4 production was 296 MBOED of U.S. oil and liquid, a 49% hike from Q4 2017. In January 2019 alone, Devon produced 96 MBOED of oil.
What's even more compelling, is that the company's 2018 field-level cash flow expanded 72% more than it did at the end of 2017's fiscal year. Per-unit costs have improved 15% year-over-year as well.
4. EOG Resources, Inc. (NYSE: EOG)
Current Price: $96.97
Market Cap: $55.75 Billion
Dividend Yield: 0.92%
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: $11.50
Market Cap: $2.85 Billion
Dividend Yield: 0.70%
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 2018, Range announced a 17,875-foot Marcellus lateral, which is the longest Marcellus lateral on record to date.
As of year-end 2018, Range had 18.1 trillion cubic feet of natural gas equivalent of proved reserves. This was a 18% increase year-over-year. It also had over 2 million cubic feet of natural gas equivalent per day. The company is efficient as hell, staying $31 million under budget.
6. Enterprise Products Partners L.P. (NYSE: EPD)
Current Price: $29.28
Market Cap: $63.80 Billion
Dividend Yield: 5.96%
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. Orla III is expected to begin service in second quarter 2019.
7. TransCanada Corporation (NYSE: TRP)
Current Price: $45.40
Market Cap: $42.20 Billion
Dividend Yield: 4.41%
TransCanada 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.
TransCanada 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 March 21st, 2019.