Why Has Big Oil Struggled to Catch on to the Shale Boom?

Shale oil and gas has been a boon for several domestic exploration and production companies, but not everyone has had as much success accessing this newer resource. Both ExxonMobil (NYSE: XOM  ) and Royal Dutch Shell (NYSE: RDS-A  )  stated during their recent conference calls that their North American shale assets have not performed as expected. What is most surprising about that revelation is that, unlike previous quarters, natural gas prices have been steadily increasing and the spread between domestic and foreign crudes is at its lowest in a couple years. 

So what is making these giant oil companies struggle? One issue that could be likely is that big oil is at a slight disadvantage due to not being first movers in these spaces. Therefore, these big companies may have ended up with more acreage outside the "sweet spots" in these new shale plays. Tune into the video below where contributor Tyler Crowe looks at the rough quarter in shale for the oil giants, and ponders what these companies can do to turn it around. 

The experience of the oil giants in the shale revolution should be a cautionary tale for investors: not every company will benefit. So picking the best companies for your portfolio is akin to picking a needle from a pile of rusty needles. For this reason, we have put together a comprehensive look at three energy companies set to soar during this transformation in the energy industry. Let us help you discover these three companies that are spreading their wings by checking out our special report, "3 Stocks for the American Energy Bonanza." Simply click here and we will give you free access to this valuable report. 

Read/Post Comments (3) | Recommend This Article (1)

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  • Report this Comment On August 26, 2013, at 12:17 PM, Oilvet wrote:

    Independent oil companies have always lead the giants in exploration efforts in the US. Nothing new here!

  • Report this Comment On August 28, 2013, at 10:39 AM, VangelVe wrote:

    Not everyone will benefit? From looking at the 10-K filings it looks to me as if nobody is benefitting other than the promoters. Year after year you see the small primary shale producers report funding gaps that need to be closed by diluting existing shareholders, taking on more debt, or selling off assets to other payers. While there are reports of profits those are based on depreciation schedules that use the EURs as gospel and do not reflect the reality suggested in the production data. From what I can see the shale gas and oil promotion is just another scam just like tech and housing.

  • Report this Comment On March 06, 2014, at 11:01 PM, constructive wrote:


    Agreed. There is a lot of uneconomic production going on and the bull market lets companies get away with it.

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