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: $182.64
Market Cap: $31.13 Billion
Dividend Yield: $0.32 (0.17%)
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 had proved reserves of 985 million barrels of oil equivalent (BOE) as of year-end 2017. Its 2017 average daily production from continuing operations was around 272,000 BOE. Its total assets year-end 2017 totaled $17 billion. And its net producing wells are around 9,300.
2. Continental Resources, Inc. (NYSE: CLR)
Current Price: $60.72
Market Cap: $22.58 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 May 2, 2018, Continental announced its first-quarter 2018 results.
Production totaled 25.9 million BOE, 287,410 BOE per day (boepd). That was up 34% from first-quarter 2017. The company is expecting second-quarter 2018 production to be within 285,000 to 290,000 boepd.
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 recently announced that it has initiated a multi-zone oil development project in the SCOOP discovery called Project SpringBoard. Continental anticipates that around 100 Springer wells and up to 250 Woodford and Sycamore wells will be drilled in the project. It also anticipates gross unrisked reserve potential of more than 400 million BOE.
3. Devon Energy Corporation (NYSE: DVN)
Current Price: $44.08
Market Cap: $23.07 Billion
Dividend Yield: $0.32 (0.71%)
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 May 1, 2018, Devon released its first-quarter 2018 quarterly report.
The company’s Q1 production is at the high end of guidance. The company is, therefore, raising its 2018 U.S. oil production guidance by approximately 200 basis points. The company is expecting a 16% growth over 2017.
Over the quarter, Devon produced approximately 122,000 barrels per day (bpd) of U.S. oil, 129,000 bpd of Canada oil, 97,000 bpd of NGL, and 1,177 million cubic feet per day (MMcfpd) of natural gas.
4. EOG Resources, Inc. (NYSE: EOG)
Current Price: $124.32
Market Cap: $71.96 Billion
Dividend Yield: $0.74 (0.60%)
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 petro-physical models. These models inform EOG’s execution of precision horizontal targeting and customized advanced completions.
As of year-end 2017, EOG’s total estimated net proved were 2,527 million BOE. This was comprised of 52% crude oil and condensate, 20% NGLs, and 28% natural gas. Around 97% of these reserves came from the U.S. The company’s worldwide production in 2017 was 222 million BOE. At year-end 2017, it had approximately 2,660 employees.
5. Range Resources Corporation (NYSE: RRC)
Current Price: $16.30
Market Cap: $3.97 Billion
Dividend Yield: $0.08 (0.47%)
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 2017, Range had 15.3 trillion cubic feet of natural gas equivalent of proved reserves. This was a 26% increase year over year. It also had a record 2 billion cubic feet of natural gas equivalent per day.
6. Enterprise Products Partners L.P. (NYSE: EPD)
Current Price: $28.22
Market Cap: $61.32 Billion
Dividend Yield: $1.71 (6.12%)
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. Orla II is expected to begin service in fourth-quarter 2018. And Orla III is expected to begin service in second-quarter 2019.
7. Spectra Energy Partners, LP (NYSE: SEP)
Current Price: $35.44
Market Cap: $16.78 Billion
Dividend Yield: $3 (8.46%)
Spectra Energy Partners is a subsidiary of Spectra Energy Corp. It primarily works on the transportation of natural gas through pipelines and natural gas storage.
It has over 15,000 miles of transmission and pipelines, over 170 billion cubic feet of natural gas storage, and about 4.8 million barrels of crude oil storage. It owns and operates an interstate natural gas transportation system that's over 1,400 miles long. It extends through Tennessee, Virginia, North Carolina, and Georgia.
Spectra Energy Partners also owns interests in several other natural gas interstates. This includes a 50% interest in the 745-mile-long Gulfstream pipeline and a 77.53% interest in the U.S. section of the Maritimes and Northeast pipeline, which is also partially owned by ExxonMobil.
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 July 17, 2018.