Leading exploration and production companies must stay on top of their game to remain afloat. With innovation, technology, and forward thinking guiding their agenda, CONSOL Energy (CNX -1.11%) and EOG Resources (EOG -0.18%) are positioning themselves for growth for years to come.

Longer is better
CONSOL Energy continues to pump in profits through its natural gas division in the Appalachian region. CONSOL owns the longest lateral component of all horizontal wells (vertical wells are not as cost-effective and don't produce as much natural gas) in the Marcellus and Utica Shales, quite a feat in the competitive region. As Jeffery Boggs, the VP of Drilling for CONSOL, says, the most efficient, innovative companies in the shale business win.

CONSOL's Kuhns 3B well spans 10,684 feet—just over 2 miles. By utilizing longer extensions and creative, proprietary completion methods, CONSOL is able to reduce its total well count while increasing production.

As Boggs succinctly stated: "If you can drill more pay zone on that one fixed cost, then that unit cost will decrease. What used to take 15 to 20 days to drill just the curve and the lateral, now we're doing these long laterals in eight to 10 days."

And the production results are good, too: CONSOL expects 30% natural gas production growth through 2016.

Meanwhile, Chesapeake Energy (CHKA.Q) is playing catch-up since its restructuring earlier this year. It is still working to cut costs and improve efficiencies. For example, it intends to utilize more pad drilling with the goal of increasing drilling efficiency by 15%-30% while many of its competitors already utilize such measures.

Chesapeake does boast prime locations in some of the most productive oil and natural gas fields in America. But it is now focusing on natural gas—as evidenced by its sale of oil assets to gain liquidity and streamline operations. So, though it is behind the eight ball, Chesapeake has potential to improve in the coming year.

The Andrew Carnegie way
Andrew Carnegie is known for innovating and buying as many components of the supply chain in the steel business as he deemed necessary. Basically, he sought control.

Oil and natural gas producer EOG is doing the same.

In order to fracture shale rock, drilling companies need sand in large quantities. In fact, due to rising demand sand reached $75 per metric ton last year; according to market intelligence firm PacWest, it is now about $50 per metric ton. Typically, exploration and drilling companies like Chesapeake pay for the sand and for its delivery to the drill site.

But, EOG is ahead of the game. It's already invested over $200 million in three sand mines and two processing plants in Wisconsin. EOG's CEO estimates that the company saves about $500,000 per well.

Moving forward, EOG is developing a sand mine in Texas, and the project may return up to 2,700 tons of sand per day. For perspective, PEC Consulting Group estimates that roughly 3,000 tons of sand is used for each well. Additionally, over 90% of the water at the facility will be recycled and reused, and EOG anticipates an 80% cut in the number of truck miles already required for sand delivery to drilling sites.

Operationally, EOG is the top producer in the Eagle Ford Shale, and it boasts key locations in the Bakken, Permian, and Appalachian basins.

Andrew Carnegie would likely be pleased.

Invest with the future in mind
Both CONSOL Energy and EOG Resources operate today thinking about tomorrow. With innovation, technology, and a forward thinking mind-set propelling these companies, they may soar to new heights in the coming years.