These Companies Are Killing OPEC

Increased oil production in the U.S. is leading to fewer oil imports from OPEC nations. That's beginning to concern the organization, which is conducting a review of North American production to determine its potential impact. Several U.S.-based companies are leading the charge to kill OPEC's stranglehold of the global oil market. Following are just five of the companies that have seen a dramatic jump in oil production in 2012 over 2011 levels.

1. Kodiak Oil & Gas  (UNKNOWN: KOG.DL  )
Few companies are growing oil production as fast as Kodiak Oil & Gas. Last year, the Bakken driller grew its oil production a staggering 250% as its total oil sales volume went from 1.34 million barrels in 2011 up to 4.7 million barrels last year. This surge was fueled by the $1.5 billion in capital the company spent on both drilling and acquisitions. Kodiak looks to spend about the same amount this year, as its capital plans call for $740 million to drill 75 wells, while Kodiak also recently announced that it was spending $660 million to acquire additional acreage and production in the play. 

2. Halcon (NYSE: HK  )
Since the company's transformational recapitalization by former Petrohawk CEO Floyd Wilson, Halcon has been rapidly expanding its assets and oil production. Last year saw the company add the Bakken and the Eagle Ford to its portfolio, which played a big role in its ability to grow oil production by an astounding 173.2% year over year. Expect more of the same in 2013, as the company looks to spend about $1.2 billion to drill its oily acres in its portfolio, with an emphasis on its acreage in the Bakken.

Source: Chesapeake Energy.

3. Oasis Petroleum (NYSE: OAS  )
By aggressively developing its Bakken acreage, Oasis was able to grow its oil production by 102% last year. The company plans to continue to grow Bakken oil production in the year ahead, with a budget to spend $897 million to drill 105.8 net wells. Even better, the company is becoming much more efficient with its capital as it continues to drill the play. Last year it needed to spend just over $1 billion to drill the same number of wells as it plans to drill in the year ahead.

4. Northern Oil & Gas (NYSEMKT: NOG  )
Bakken-focused Northern Oil & Gas delivered oil production growth of 93.4% last year. The company spent about $485 million to drill a total of 48.3 net wells, which delivered that production growth. What's unique about Northern is that it typically just takes a small, non-operated stake in each well, as the company actually participated in the drilling of 563 gross wells last year. That spreads its risk, as one dry hole won't have much of an impact on its returns. The company plans to continue to grow its oil production this year, as it's currently working with its partners to drill 152 gross (12.2 net) wells to keep oil production growing.

5. Chesapeake Energy (NYSE: CHK  )
The nation's No. 2 natural gas producer is seeing tremendous growth in its oil production. The company devoted about 85% of its capital budget last year to focus on its liquids-rich acreage like the Eagle Ford Shale. That turned out to be money well spent, as the company saw its year-over-year oil production grow by 84.1%. Looking ahead, Chesapeake is planning to cut its capital budget by 39% this year because of capital constraints. However, about 85% of that capital will be devoted to its liquids-rich acreage, and more than a third of those funds will be devoted to the oil-heavy Eagle Ford, meaning the company's oil production will continue to head higher.

Final Foolish thoughts
While the dream of eliminating our need for foreign oil is a long way from becoming a reality, these five companies are certainly doing their part. The important link here is that oil production growth for all five is driven by either the Bakken or the Eagle Ford shale. Those two plays have been behind the boom in U.S. oil production growth, which is certainly starting to draw OPEC's attention. While we can still only dream that our oil production will ever kill OPEC's place in the world oil market, these five are certainly doing their part to make that a reality.

For investors, the company to really watch here in Chesapeake. As the nation's No. 2 natural gas producer, it has tremendous upside to that commodity. However, Chesapeake is becoming an important oil growth story. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 09, 2013, at 3:01 PM, Ostrowsr wrote:

    Made lots of bucks with GeoResources before they with Halcon. Plenty more oil left in both their portfolios. GEOI, in fact, had a near perfect discovery record. I'm just surprised at the price since they joined forces. This is a gangbuster based on what I know of the new company.

  • Report this Comment On June 10, 2013, at 4:13 AM, amvet wrote:

    I imagine that OPEC is staying up all night worrying about these 5 midgets. HA HA

    Q1 2013 production of these five combined is less than 200K boe per day. For fun, assume 100% oil. Details:

    CHK 103K boed

    NOG 11K boed

    OAS 30K boed

    HK 26K bord

    KOG 22K boed

    Killing OPEC, Get serious.

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9/28/2016 4:00 PM
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