The Motley Fool Previous Page


The Top 10 E&Ps

http://www.fool.com/investing/general/2012/10/28/the-top-10-eps.aspx

Aimee Duffy
October 28, 2012

For the 11th straight year, Platts has ranked 250 of the world's top energy companies, and not surprisingly, the top 10 are all oil and gas outfits. Outside the top 10, however, exploration and production companies have a dominating presence. The list is much more geographically diverse than the overall top 10, and it illustrates the truly global nature of exploration and production.

The list
Platts evaluated the world's energy companies using four metrics: asset value, revenue, profit, and return on invested capital . Here are the top 10 E&Ps.

Platts E&P Rank

Overall Platts 250 Rank

Company Name

1

8

ConocoPhillips (NYSE: COP  )

2

13

CNOOC (NYSE: CEO  )

3

22

Oil & Natural Gas Corp.

4

30

Apache (NYSE: APA  )

5

46

Canadian Natural Resources (NYSE: CNQ  )

6

49

Inpex

7

50

Tatneft

8

52

Marathon Oil (NYSE: MRO  )

9

56

Bashneft

10

57

Devon Energy (NYSE: DVN  )

Source: Platts.

ConocoPhillips and Marathon Oil both appear on this list for the first time, representing the trend of integrated oil and gas companies that spin off their refining segments to become solely exploration and production companies. Conoco is the only member of the overall top 10 that isn't an integrated major, and it tops this list with $153 billion in assets, $235 billion in revenue, $12 billion in profit, and a 13% return on invested capital .

CNOOC is China's only representative here, and it's mostly been in the news of late because of its $15 billion bid to acquire Canada's Nexen. Despite its reputation as an energy powerhouse, Canadian Natural Resources is Canada's only listing in the top 10. Japan's Inpex, Russia's Tatneft and Bashneft, and India's Oil & Natural Gas Corp. round out the international players.

Apache jumped 16 spots on the overall list from its 46th-place ranking last year. The company is all over the map, literally, and finding success wherever it goes. It got stung a bit by commodity prices in the second quarter of this year, but it represents a compelling opportunity in the long run .

Devon Energy is perhaps the quietest player on this list, with assets limited to North America. However, Devon consistently makes smart moves and is in excellent fiscal shape -- two of the handful of reasons fellow Fool Isac Simon thinks it may be undervalued right now.

A world of discovery 
Whether these E&Ps remain in the top 10 depends on how quickly they can find and produce new fields. Despite all the hype about "peak oil," there are new discoveries being made, and new technologies being used on old fields, to boost production all around the globe.

E&Ps looking for oil have been particularly successful onshore in North America, specifically in Alberta's oil sands, and in North Dakota's Bakken Shale. Canada is the world's sixth-largest oil producer, churning out 3.7 million barrels of oil per day last year. Roughly half of this production comes from the oil sands. At 175.2 billion barrels, Canada has the third-largest proven reserves in the world, behind only Venezuela and Saudi Arabia, and it will continue to be a heavy hitter on the world energy scene.

Meanwhile, the Bakken is currently producing oil at more than 600,000 barrels a day -- which is more than the current midstream infrastructure can cart away. The region traditionally dominated by independent E&Ps is so compelling that even ExxonMobil (NYSE: