Bill Barrett Corporation (NYSE:HPR) has struck oil and lots of it. In its third-quarter release the company announced that eight of its new wells delivered initial oil production of more than 1,000 barrels of oil equivalent per day, or BOE/d. That has the company hopeful that it can do what some of its peers have struggled to do, move from natural gas to oil.

Bill Barrett Corporation has been targeting Colorado's DJ Basin in its search for oil. Incidentally, this is the same basin that fellow natural gas peer Ultra Petroleum (OTC:UPLM.Q) was targeting before it came up dry. Ultra Petroleum actually found oil, but it was immature, under-pressured and not commercial. Because it couldn't build its oil production through the drill bit it turned its attention to buying oil growth. The company just recently signed a deal to acquire production in the Uinta Basin.

Another heavy natural gas producer, Southwestern Energy (NYSE:SWN), on the other hand has found some success in its oil development program. The company drilled a vertical well in the Lower Smackover Brown Dense that produced 600 barrels of oil per day and a total of 800 BOE/d. Southwestern Energy plans to drill another three more wells this year to continue testing this project.

However, Southwestern Energy is seeing a mixed bag as it drills into the DJ Basin. The company's Staner well delivered pretty poor results. Initial production achieved a peak rate of just 146 barrels of oil and 59 Mcf of natural gas. That said, the company still plans to drill a few more wells to test the concept early next year. Overall, Southwestern Energy CEO Steve Mueller says that the company's "curiosity and innovation will keep driving us higher up the learnings curve as we work to unlock value from these resources plays."

With natural gas prices still low, energy producers don't have much choice other than to seek out oil to boost profits. It's tough to tell when natural gas prices will return to the levels these companies need to make a decent profit. That's pretty evident at Bill Barrett Corporation. Oil production now represents 25% of total production, however, oil sales now account for 56% of pre-hedge sales revenue. It's the significant margins that oil brings that's driving these gas companies to search out oil rich opportunities.

Oil can really be the difference maker when it comes to profitability and cash flow. SandRidge Energy (NYSE: SD) investors know this well. SandRidge Energy spent billions to transition from gas to oil. It's a move that makes sense as it just can't make much money on natural gas. For example, while 55% of its Mississippian Lime production is natural gas, 80% of its cash flow comes from its oil production. This is why we are seeing Ultra Petroleum and Southwestern Energy search the country for oil. 

America's energy boom is providing a tremendous opportunity for these companies to shift drilling locations to pursue more profitable oil-rich options. This switch hasn't been without risk as Ultra Petroleum found out by drilling a few dry holes. That's why investors need to determine if their best bet isn't a company that already has solid oil production and well defined growth.

Three better bets for America's oil boom