Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



As Production Soars in the Eagle Ford, These Companies Will Profit

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Oil and gas production in the United States is in high-growth mode, a scenario that was considered nearly impossible just a few years ago. This is due to a variety of factors, including oil majors turning away from high-risk international operations, as well as the onset of technological advancements that have made drilling possible in previously inaccessible areas.

One domestic field in the United States that has drawn attention from energy majors for its vast, available resources is the Eagle Ford shale play. It's such a promising discovery that a few oil giants are devoting billions to oil and gas development and production there, which is likely to pay off handsomely in the years ahead.

Why Eagle Ford is so promising
The Eagle Ford region in Texas holds a massive amount of resources, and production is ramping up. The U.S. Energy Information Administration reported that total production from the Eagle Ford formation reached 1 million barrels per day in August, and is poised to grow even further in the months ahead. The rapid acceleration of production is truly impressive: Eagle Ford did not have notable oil drilling until early 2009.

That's why energy companies are rushing to make sure they don't miss out, and ConocoPhillips (NYSE: COP  ) is one of them. It's made a massive investment in the region, which should pay off in the years ahead. ConocoPhillips is in the process of plowing $8 billion into the Eagle Ford play over a five-year period. That's because Conoco's acreage in the area contains huge oil and gas resources that should be well worth the cost.

As the company stated during its Fall 2013 Investor Day presentation, Conoco holds 227 million net acres that holds approximately 1.8 billion barrels of oil equivalent. The region includes 1,800 identified drilling locations, and in all, production at its Eagle Ford facilities will grow by 16% compounded annually through 2017. In fact, ConocoPhillips is the highest producing major at Eagle Ford in terms of average oil rate per well.

EOG Resources (NYSE: EOG  ) is also gearing up in the Eagle Ford, where its oil production has surged 64% through the first nine months of 2013. EOG is capitalizing on crude oil in the Eagle Ford region, as it's the largest acreage holder in the oil-producing area of the field. This is extremely valuable territory: Earlier this year, EOG increased its potential reserves estimate to 2.2 billion barrels of oil equivalent.

In the years ahead, EOG plans to strengthen its efforts in the Eagle Ford. The plan is to drill 460 new net wells. The company would also like to make progress on decreasing well costs and increasing efficiencies, which investors should keep an eye on going forward.

In addition to oil, there's also a significant natural gas component to the Eagle Ford shale, which means good things for Chesapeake Energy (NYSE: CHK  ) . Chesapeake reported that total third-quarter average daily production of oil and natural gas liquids increased 23% and 31%, respectively. The Eagle Ford region contributed heavily to this, since production there skyrocketed 82% year over year.

CEO Doug Lawler stated that Chesapeake's assets in the Eagle Ford shale were the primary contributor to the company raising its full-year production expectations. Management increased its oil production guidance by 2 million barrels after releasing third-quarter results. Going forward, it's clear Chesapeake will continue to profit from its Eagle Ford operations. The company maintains 788 producing wells and another 117 wells in various stages of completion.

The Eagle Ford will fuel profits for years
ConocoPhillips, EOG Resources, and Chesapeake Energy have devoted huge amounts of money into exploration and production of oil and gas in the Eagle Ford, and for good reason. The region contains massive amounts of resources that will allow the United States to take one more step toward true energy independence. Thanks to new drilling capabilities and supply disruptions overseas, U.S.-based energy giants are turning their attention to domestic fields, and it's likely their efforts will pay off shortly.

The Eagle Ford shale is a very promising region that should fuel production growth for ConocoPhillips, EOG, and Chesapeake Energy, and represents a key development for investors to keep their eyes on going forward.

How else can investors take advantage of America's new energy boom?
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don’t miss out on this timely opportunity; click here to access your report -- it’s absolutely free. 


Read/Post Comments (0) | Recommend This Article (1)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2746339, ~/Articles/ArticleHandler.aspx, 9/30/2016 4:35:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:03 PM
CHK $6.27 Up +0.15 +2.45%
Chesapeake Energy CAPS Rating: ***
COP $43.47 Down -0.19 -0.44%
ConocoPhillips CAPS Rating: ****
EOG $96.71 Up +1.66 +1.75%
EOG Resources CAPS Rating: ****