Eagle Ford Shale drilling rig. Photo credit: Anadarko Petroleum
Texas' Eagle Ford Shale could very well be the second best oil field ever discovered in America. Some estimates suggest that the producers will eventually recover more than 25 billion barrels of oil equivalent. That's double what some have predicted to come from the Bakken Shale.
Investors looking to profit from America's oil boom need producers with acreage in the Eagle Ford Shale in their portfolio. With that in mind, here are a few of the best ways to play the Eagle Ford Shale oil boom in 2014 and beyond.
America's natural gas king lives on Eagle Ford Shale oil
Chesapeake Energy Corporation (CHKA.Q) might be America's second largest natural gas producer, but its livelihood comes from the oil and natural gas liquids it extracts from the Eagle Ford Shale. In fact, the Eagle Ford Shale has helped fuel a 23% increase in oil production for Chesapeake Energy over the past year. It has also helped to fuel a 31% jump in NGL production. These higher margin products are important for Chesapeake Energy's bottom line, which is why the company is investing heavily in the Eagle Ford Shale while allowing its natural gas production to decline. With more than 3,000 future drilling locations left, Chesapeake Energy will be drilling for oil in the Eagle Ford Shale for years to come, making it a great way to invest in the play in 2014 and in the future.
Best way to play the American oil boom
EOG Resources Inc (EOG 0.41%) just might be the best oil stock in America. Not only does the company hold great positions in the Bakken Shale and Permian Basin, but it holds one of the best Eagle Ford Shale positions in the business. That's why EOG Resources is one of the top producers in the play. Its future looks remarkably compelling because estimates suggest that EOG Resources alone will ultimately recover 8% of the total oil and gas out of the Eagle Ford Shale, which is up to 2.2 billion barrels of oil equivalent. Best of all, because the company earns triple digit direct after tax returns, EOG Resources is simply printing money every time it drills into the Eagle Ford Shale.
Global balance
Anadarko Petroleum Corporation (APC) is one of the many energy companies with global operations that now sees more potential in America than overseas. That's one reason why the company spent 60% of its capital on U.S. onshore projects in 2013. While the Eagle Ford Shale is just one of Anadarko Petroleum's many opportunities in America, the company has grown its production from the play by triple digits each year since 2009. Further, it sees the potential to drill 2,500 future Eagle Ford Shale wells giving years of growth and making Anadarko Petroleum a solid play for investors looking to add a lot more than just the Eagle Ford Shale to their portfolios.
Big deal bulks up its Eagle Ford Shale position
Penn Virginia Corporation (NYSE: PVA) is a small company with a big plan to drive its growth by the Eagle Ford Shale. Earlier this year the company picked up $400 million in Eagle Ford Shale assets from a nearby competitor. That deal dramatically grew Penn Virginia's position in the play so that it now has 72,200 net acres and 890 future drilling locations. It's not stopping there as it has a goal to grow its position in the Eagle Ford Shale to 100,000 net acres and 1,000 drilling locations in the near future. That positions Penn Virginia for oil-rich growth in the years ahead with the company expected to grow its oil production by as much as 85% in 2014 alone.
Investor takeaway
The Eagle Ford Shale has the potential to fuel America for years to come. While there are a number of ways to invest in the Eagle Ford Shale oil boom, these five are among the best ways an investor can have the Eagle Ford Shale fuel their portfolios in 2014 and beyond. That said, one company does stand out above the rest.
