How to Invest in the Explosive Growth of the Utica Shale

Halcon Resources Corp., Magnum Hunter Resources Corp., and Chesapeake Energy are among the most levered to the growth of the play.

Feb 17, 2014 at 2:00PM

Oil and gas production out of Ohio's Utica Shale more than doubled last year. That's despite the fact that the play's top driller Chesapeake Energy Corporation (NYSE:CHK) still had 208 of the 377 wells it drilled still waiting to be completed as of the end of last quarter. It's also despite the fact that some of the play's emerging drillers like Halcon Resources Corp. (NYSE:HK) and Magnum Hunter Resources (NYSE:MHR) are just beginning to drill. Because we're so early in the development of the Utica Shale, there is a real opportunity for investors to profit from the play's explosive growth potential.

The choice investors need to make is how to best invest in the emergence of the Utica Shale. Chesapeake Energy might one of the largest leaseholders, but only about 15% of its 2014 capital budget will be spent on the play. Meanwhile, Magnum Hunter Resources has only completed one well so far. However, it is the second most levered to the Utica Shale when comparing its net Utica acreage to its enterprise value.

Finally, there are other emerging drillers like Halcon Resources. While it doesn't have as many total net acres as Chesapeake Energy, it's tied with the nation's No. 2 natural gas producer in third place when it comes to total leverage to the Utica Shale. Because there is no easy choice, I've created the following slideshow to help investors decide which Utica Shale driller might make the most sense for their portfolio.

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Matt DiLallo has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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