5 Companies That Brought Down Peak Oil

Peak Oil is dead -- or at least the website dedicated to educating the world on the theory is, as the popular Oil Drum website will cease publishing new content at end of the month. The theory just doesn't seem to have much relevance these days, when North America is in the midst of a massive energy production boom. While we are a long way from celebrating Energy Independence Day, we've at least pushed back the date when Peak Oil will again become a major topic of conversation. With that as context, let's look at five of the companies that have made Peak Oil no longer relevant. 

Oil production hasn't dried up as fast as once thought. Photo credit: Flickr

Chesapeake Energy  (NYSE: CHK  )
The nation's No. 2 natural gas producer is really the main company to point the finger at when it comes to bringing down Peak Oil. In discovering many of the top unconventional natural gas plays, the company's prolific use of fracking technology helped spark the move into oil and liquids production from shale. Today, Chesapeake is focused on balancing its production by increasing the amount of unconventional oil it produces. That focus led to 22% year-over-year increase in oil production for the company, as it has developed its acreage in the Eagle Ford, Granite Wash, and Mississippi Lime. Chesapeake has a massive inventory of future wells, which should keep it very busy over the next decade. 

SandRidge Energy  (NYSE: SD  )
Speaking of the Mississippian, SandRidge is one of the biggest advocates of that emerging oil play. The company expects the play to deliver 64% year-over-year oil production growth, which will enable its total oil production to grow by 19% this year. SandRidge has leased about 1.85 million net acres in the Mississippian, which gives it more than a decade of oil production growth opportunities. 

Kodiak Oil & Gas  (NYSE: KOG  )
Another big culprit in the demise of Peak Oil is the Bakken Shale of North Dakota. Its development has enabled companies such as Kodiak to annually deliver triple-digit oil production growth. It is quite astonishing to think that in 2010 the company produced an average of 1,260 barrels of oil equivalent per day, while this year it expects to deliver an average of nearly 31,000 barrels of oil equivalent per day. With an inventory of more than 950 future drilling locations, investors can expect Kodiak continue to grow oil production well into the future. 

Pioneer Natural Resources  (NYSE: PXD  )
Not only have we seen many new oil fields such as the Bakken and Eagle Ford emerge, but older oil fields such as the Permian Basin continue to be the gift that keeps on giving. They've helped companies such as Pioneer enjoy double-digit production growth over the past few years. New technologies have helped it unlock additional areas of this prolific basin to the point where the company sees the potential for 40,000 future drilling locations and the potential to recover 7 billion barrels of oil equivalent. In fact, it's believed the Sparberry/Wolfcamp field could be the second largest oil field in the world, with nearly 50 billion barrels of oil equivalent reserves. 

Devon Energy  (NYSE: DVN  )
In addition to all the great U.S. oil plays, we simply can't forget about the massive oil finds by our neighbors to the North. Among the many examples, the Canadian oil sands helped Devon deliver 14% oil production growth last quarter. Looking ahead, the company sees its oil production from the oil sands growing by up to 19% annually through 2020. When combined with its strong position in the Permian, as well as an emerging position in the Mississippian, Devon has strong, highly visible future oil production growth potential. 

Final Foolish thoughts
Oil production growth in North America has been truly amazing. Further, as seen from this handful of examples, these companies have very visible oil production growth opportunities to keep them busy for at least the next decade. It's that growth potential that really is what has put Peak Oil out to pasture.

All that being said, obviously, oil is a finite resources meaning it will eventually run dry. What's changed in the meantime is our ability to technically and economically produce it. What that doesn't mean is that the price of oil is heading lower as most of these new resource basins require high oil prices in order to remain economical. So, if you're looking to profit from this dynamic you might want to check out The Motley Fool's special report highlighting "3 Stocks for $100 Oil." For free access to this special report, simply click here now.


Read/Post Comments (7) | Recommend This Article (4)

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 July 14, 2013, at 3:29 PM, amvet wrote:

    The article omits mentioning, as do most articles, that the globas oil production depletion of producing wells is between 4% and 9% per year. Take the low end 4% times 80 million bpd and you get that the world needs 3.2 million bpd of new production per year to stay even.

    In short, we need a new North Sea in full production each year.

    . Taking out the fudging on the crude oil stats by putting in fluids other than crude, you will see that global production has been in a small range for the last several years. Peak oil is here.

  • Report this Comment On July 14, 2013, at 5:47 PM, Ghung wrote:

    "...these companies have very visible oil production growth opportunities to keep them busy for at least the next decade."

    Indeed,, considering the severe decline rates of fracked wells. See Jeffery Brown's 'Red Queen rule' - running ever faster to stay in the same place.

    Regarding the Oil Drum going on hiatus; never forget; they who laugh last, laugh best.

    Firstly - Double (or more) the price of any commodity, someone will find a way to get more of it (for a while).

    Secondly - The race for tight oil is a sure sign that the peak is nigh. We could see yet another surge of production at some point (nanoparticles or somesuch), but as they say, smoke'em while ya got'em. As sure as I can go buy 20 gallons of gas today, there'll come a time when many reading this will wonder; what the f... happened?

  • Report this Comment On July 15, 2013, at 1:46 AM, elstongunn wrote:

    Certainly this article is is not a serious examination of the peak oil issue. It merely a psuedo article to to promote more Motley Fool "investment opportunities". Responding to this article would be like responding to a T.V. informercial.

  • Report this Comment On July 15, 2013, at 11:46 AM, Ragingmoose wrote:

    What about APA, an energy play with more margin of safety ?

  • Report this Comment On July 16, 2013, at 7:08 AM, ralfyman wrote:

    Global oil production per capita peaked back in 1979. We're now resorting to conventional production to keep total production up, but that's not good enough:

    http://www.slate.com/articles/health_and_science/science/201...

    Meanwhile, consumption has to go up higher than what we can afford to produce to maintain economic growth.

  • Report this Comment On July 16, 2013, at 8:45 AM, nazekim wrote:

    Peak oil rumors (or realities however you look at them) have been going on for the past few years. In order to get past through these, we need to be looking into alternatives, such as ethanol, methanol, natural gas and others. If we don't want to face a future where the oil prices are even higher than they are today, certain initiatives need to be in place before it's too late. This involves updating regulations and removing some of the roadblocks that are keeping it illegal to convert our cars.

  • Report this Comment On July 16, 2013, at 5:40 PM, ThatGuyInTheBack wrote:

    More innumerate happy talk about oil supply from the appropriately named Motley fool -fronted in this case by Matt DiLallo. Before you embarrass yourself publicly again, I suggest you research the following:

    1) How much additional oil is likely to be acquired by fracking.

    2) How much will each additional unit of net energy acquired by fracking cost, over time.

    When you can answer those questions, you can start a meaningful debate. In the meantime, you're just making noise.

    You can get started here: https://en.wikipedia.org/wiki/Cubic_mile_of_oil. It has numbers. Do your best.

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