The U.S. oil benchmark, WTI, reached $60 a barrel on Wednesday. That was its highest level in four months and capped quite a comeback for crude oil, which started the year at around $46 a barrel. Driving the rebound has been a massive decline in oil storage levels due to strong demand as well as the efforts of OPEC and others to reduce supplies.

That $60 price point is a boon for some producers, which entered the year aiming to live on the cash flows they could produce at sub-$50 oil. Because of that, they're on track to generate a boatload of free cash flow this year, which they will likely return to shareholders.

$20 bills and a calculator with an oil pump in lower corner.

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Thriving on less than $45 a barrel

Marathon Oil (MRO -0.25%) has one of the lowest oil breakeven levels needed to support its capital spending plan. The U.S.-focused oil producer believes it can generate enough cash at $45 oil over the next two years to pay its dividend as well as fund the new wells needed to expand its oil output at a 10% annual rate with room to spare. Because of that low breakeven point, Marathon Oil appears poised to produce an absolute gusher of free cash over the next two years if crude can stick around $60 a barrel. In the company's view, it could produce more than $2.2 billion of free cash over that time frame. Meanwhile, even if oil moderates a bit and averages $50 a barrel, Marathon would still produce more than $750 million in excess cash.

With the company aiming to remain disciplined by not boost spending along with oil prices, Marathon has little use for that cash since it already has a top-notch balance sheet and years of drilling inventory. As a result, the company will likely continue sending it back to shareholders by repurchasing more stock. It already bought back $700 million last year and could maintain that pace if crude prices cooperate.

Check out the latest earnings call transcripts for Marathon Oil and other companies we cover.

Reset to run at $46 a barrel

Devon Energy (DVN -0.37%) also has an ultra-low oil breakeven level. Thanks to selling higher-cost assets and efficiency gains, the company can generate enough cash at $40 oil to maintain its current production rate over the next three years. In the meantime, it only needs oil at $46 to deliver double-digit growth. That positions it to produce $1.6 billion in free cash over the next three years assuming oil averages $55 a barrel. That number jumps to $2.3 billion at $60 oil.

Like Marathon, Devon does not need that money since it, too, has a strong balance sheet. That means it will likely send the bulk of it back to shareholders. The company has already been doing that since it has an industry-leading share repurchase program underway. Thanks to prior asset sales, Devon has authorized a $5 billion repurchase program, which is enough money to retire 30% of its outstanding shares. On top of that, it has increased its dividend twice, including a 13% raise earlier this year. However, more cash will likely head back to shareholders if crude maintains its current course.

Oil worker holding cash in front of an oil pump.

Image source: Getty Images.

Based on $50 a barrel

Meanwhile, several other producers set their spending plans for the cash flows they could produce on $50 oil this year. EOG Resources (EOG 0.05%), for example, estimates that it can generate enough cash at that price point to pay its current dividend and fund the new wells needed to expand its U.S. oil output by 12% to 16% with some room to spare. Consequently, the company will generate significant excess cash at $60 a barrel, which it currently intends on using to pay off debt as it matures, further strengthening its already top-tier balance sheet. In addition, EOG expects to increase its dividend by a more than 19% annual pace going forward. The company also said it could use its growing cash surplus to buy more drillable land or repurchase stock.

Anadarko Petroleum (APC) is also aiming to live within the cash flows it can produce at $50 a barrel this year. At that price point, the company can pay its dividend -- which it boosted by a jaw-dropping 500% last year -- and the new wells needed to increase its oil production at a 10% clip. In the interim, Anadarko plans to use the vast cash reserves it built up from selling assets to continue buying back stock and paying off debt as it matures. The company currently expects to repurchase another $1.5 billion in stock by the middle of next year -- bringing the total to $5 billion -- as well as retire $2 billion in debt. However, with crude in the $60s, Anadarko is producing even more excess cash, which could lead the company to buy back additional shares in the next year.

What a difference a few months makes

After crashing 40% over the final few months of 2018, many oil companies set their budgets to run on the cash flows they anticipated if oil lingered in the range of $45-$50 a barrel. However, with crude prices bouncing back sharply over the last few months, these producers are on track to haul in a boatload of cash. Since they don't need the money for other things, they're likely going to continue sending this windfall back to shareholders, which could enable their stocks to deliver high-octane returns in 2019.