With the advent of horizontal drilling and hydraulic fracturing, shale formations have become viable sources of oil and natural gas. In fact, they're actually some of the hottest acreage positions onshore. There's been plenty of fuss about the shales in Texas, with the Eagle Ford, Haynesville, and Barnett boasting plenty of production from many companies.

One popular shale formation outside of Texas is the Bakken, located in North Dakota, Montana, and parts of Canada. This liquids-rich shale has attracted many companies looking to capitalize on high oil prices. Along with the Eagle Ford, the Bakken has emerged as one of the best onshore oil plays.

EOG Resources (NYSE: EOG) is the largest oil producer in North Dakota, with more than 49,000 barrels of oil equivalent per day as of the end of 2010. With 600,000 net acres in the Bakken shale, EOG is set to produce in this area for a long time. EOG's acreage is mainly in North Dakota, but it has some land in Montana as well. Looking forward, EOG plans to operate 10 rigs in the area in 2011.

How does EOG compare to others? Let's compare its cash flow multiple to that of its peers:

Company

Trailing Cash Flow From Operations

Market Cap on July 28, 2011

Price-to-Cash-Flow

Brigham Exploration (Nasdaq: BEXP)

$185

$3,726

20.2
Continental Resources (NYSE: CLR)

$658

$12,300

18.7
Denbury Resources (NYSE: DNR)

$867

$7,767

9.0
EOG Resources

$3,046

$27,764

9.1

Source: Capital IQ, a division of Standard & Poor's. All dollar amounts in millions.

EOG Resources compares quite favorably to its peers, trading at a lower cash flow multiple than smaller players Brigham Exploration and Continental Resources, and trading about even with Denbury Resources. Considering that EOG also has strong positions in the Eagle Ford, the Barnett, and the Niobrara, EOG is a strong, diversified way to participate in U.S. shale formations.

It may be unfair to dismiss the smaller players for trading at higher multiples, since it is entirely possible that these smaller exploration and production companies have taken larger acreage positions relative to their size, which they've been unable to develop so far. However, there's something to be said about a larger company that's producing more and trading at a lower multiple of cash flow.

Interested in EOG Resources? Add it to your Foolish watchlist.