After the end of 2018 in freefall, you have won around 30% since the start of the year. The US oil benchmark, which hit $ 60.39 a barrel last week, the highest level since November, is trading at $ 59.84 at the time of writing.
WTI crude oil weekly chart
During much of 2019, the price of the commodity was supported by the efforts of the Organization of the Oil Exporting Countries (OPEC) and unaffiliated allies such as Russia, which promised about 1.2 million barrels per day behind to keep (bpd) the offer to support markets. But American shale oil drilling machines were kicked in to fill the void – and then some; they pump at a record level, almost 12 million bpd, according to weekly data from the Energy Information Administration (EIA).
The International Energy Agency (IEA) also predicts that the production of American shale will increase by a further 4 million bpd over the next five years, suggesting that crude production from shale basins will continue.
US Shale Oil Boom, 2010-2020
These increases are likely to exceed global demand growth and give the US an even greater share of the world market, making it a more pleasing exporter than Saudi Arabia.
Considering this, we believe it is an ideal time for investors to go shopping for some shale oil drilling machines. Below are three shares ready to perform better in the coming months. Because of the thousands of energy-related names that are traded on the market, we have only taken into account US-based companies that currently have a market capitalization of $ 2 billion and above.
1. EOG Resources: America & # 39; s Leading Shale Producer
While EOG Resources (NYSE 🙂 is perhaps the third largest oil producer in the United States, behind Chevron (NYSE 🙂 and Exxon Mobil, it is by far the country's leader in extracting oil from tight shale formations.
In the fourth quarter of 2018, EOG produced an average of 479,000 bpd from shale formations in the lower 48 states, more than double the level of its second largest peer, Pioneer Natural Resources (NYSE :). Most of that production came from the Eagle Ford, where the company is the best oil extractor, which emitted an average of 157,000 bpd last year.
EOG Resources also has extensive area positions in the Perm, Bakken, DJ Basin and Powder River basins. The company's large range of remaining drilling sites gives EOG the means to grow its oil production in the US to 15% Compound Annual Growth (CAGR) up to 2020, assuming oil is on average $ 50 per barrel, and up to 25% CAGR is used as a crude oil. for $ 60 a barrel.
EOG Resources daily chart
Although the shares closed on Tuesday at $ 94.77 are nearly 12% lower than the year before, shares have gained 8.6% since the beginning of 2019.
2. Exxon Mobil: rushing back to shale as independent scales back
Global oil giant Exxon Mobil (NYSE 🙂 is the second largest US oil producer, with an oil-equivalent production of just over 4 million barrels per day.
After largely missing the first phase of the shale bonanza of the Perm, which really started to accelerate in 2013 Exxon Mobil is building a large-scale shale oil project in the Chihuahuan desert of New Mexico. The company's executives boast that the company will enable Exxon Mobil to withstand the notorious boom-and-bust cycles of the industry.
U.S. shale oil output
The expansion is due to the fact that smaller independent producers are delaying exploration. They also cut staff and budgets amid pressure from investors to control spending and increase returns.
Exxon operates 48 oil rigs in the region and plans to add seven additional units this year, says Drillinginfo Inc., a research firm. Exxon CEO Darren Woods said on March 6 that when it comes to shale, the company would change "the way game is played." Exxon said, in its most recent on February 1, that production in Perm Basin increased 90% from more than a year ago.
The size and business of Exxon allowed Exxon to achieve double-digit percentages in the Permian, even if oil prices were to fall below $ 35, Senior Vice President Neil Chapman added. The shares have risen 18.7% since the beginning of the year. They closed at $ 80.96 last night.
3. Occidental Petroleum: Emergent Heavy Hitter in U.S. Pat. Oil Export Boom
Occidental Petroleum (NYSE 🙂 is the largest oil and producer in the Perm basin, extending over West Texas and Southeast New Mexico, making it a major player in the US energy sector.
The company has emerged as one of the largest exporters of American shale oil, which go hand in hand with major energy trading companies such as Vitol Group and oil majors including Exxon and Chevron. It currently exports around 300,000 barrels of oil per day, about 10% of all crude US exports
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With plans to double the export of crude oil to 600,000 barrels per day in 2020, according to Cynthia Walker, senior vice president midstream and marketing at Occidental in March Occidental shows no signs of delay. Profits from the company's midstream and marketing segment, including exports, rose more than seventeen times to $ 1.9 billion in 2018, excluding items, mainly due to moving crude oil from the Permian to refining and export nodes in the Gulf Coast.
The company has the ability to transport around 470,000 bpd from the Perm via pipelines and expects to add more capacity in 2019, said Chief Executive Vicki Hollub at a industry conference last year. Occidental shares have so far won around 10% in 2019; they closed at $ 67.08 yesterday.
