Source: Noble Energy

The legalization of marijuana has gotten the vast majority of headlines coming out of Colorado. One area that most certainly shouldn't be overlooked is the state's energy production potential. Multiple companies are already hard at work in order to ramp up production and deliver continuous improvements to shareholders.

One such company has been Noble Energy (NBL) which owns some great assets in the Mediterranean, but that isn't all it has on offer for investors. What makes this company even better is that it's just the beginning of an amazing growth story about to unfold, a story that you might want to consider a supporting role in.

Prince Marcellus
Step aside North Dakota and Texas, Noble Energy has set its sights on the Marcellus and Denver-Julesburg Basin. This year Noble Energy plans on spending ~70% of its 2014 capital expenditures on growing output from these two plays.

By pouring billions into Colorado and Pennsylvania, Noble Energy hopes to grow output from North America by 230% from 2013 to 2018. This growth, if followed through on correctly, will likely bestow royal returns onto loyal long term shareholders. Roaring out the gate right at the start, Noble Energy has plans to increase output from the Marcellus by 90% year over year in 2014 and plans to keep growth around 46% CAGR for the next four years.

King DJ
Colorado is the jewel of Noble's crown, with the base of its growth ambitions coming from the region. The DJ Basin is receiving the largest portion of Noble's capex, with plans to increase output, which is 65% liquids, by a compounded growth rate of 23% over the next few years. To achieve such growth, Noble is going to cough up a small fortune of $12 billion so it can one day turn that fortune into copious amounts of cash flow.

With 87% of the 609,000 net acres Noble Energy has in the area located in the oil window, Noble owns some very high quality acreage. To make sure investors aren't shifting around anxiously on the throne, Noble is testing out 24 and 32 wells per section to increase the amount of recoverable resources.

Going from 16 to 24 wells per section increases the recovery factor from ~7% to ~12% and boosts the amount of  cash generated per section by $30 million to $100 million. Looking out into the future, Noble Energy will keep testing out further density projects to give shareholders what they truly deserve, market beating returns. Downspacing in the DJ Basin has the potential to double the amount of cash generated per section, which will provide major upside in the future.

A swap
Before Noble Energy swapped acreage with Anadarko Petroleum Corp (APC), both companies had to try and develop acreage that was scattered all over the place. Management from both companies saw this as extremely detrimental and a major cause of waste, so Noble Energy and Anadarko Petroleum decided to swap roughly 50,000 net acres in the DJ Basin so their acreage would be continuous.

This exchange was long overdue, but now that it has been completed both Noble Energy and Anadarko Petroleum can achieve maximum returns through streamlined operations and the ability to drill deeper laterals.

Anadarko Petroleum hasn't been sitting on its hands while Noble Energy does all the work. It put plenty of capital at work to complete 325 wells in 2013. This is allowing Anadarko Petroleum to create a cash hoard of its own, as output is guided to grow by 21% in 2013. Don't let all the hubbub around North Dakota and Texas distract you from meaningful returns elsewhere. Colorado (just as it says in Atlas Shrugged) is at the forefront of a major energy boom.

While Anadarko Petroleum has a smaller presence in the area, it still sees 1.5 billion barrels of recoverable oil equivalent in the area versus 2.6 billion boe for Noble. This is bound to increase due to the land swap, as both Noble Energy and Anadarko Petroleum will be able to drill down deeper and space wells closer together without interference from each other.

Anadarko Petroleum sees its acreage in the DJ Basin as a $15 billion-plus opportunity, so even though it isn't as invested as Noble Energy in the area it still is the play to watch going forward. 

Foolish conclusion
We can't all be born rich, but if we place down cash in the right areas we might be able to build our own riches one day. Noble Energy owns amazing assets all around the world, not just in North America. With output expected to grow north of 20% over the next few years and foreign assets providing an even longer growth runway, Noble Energy is definitely a first class E&P player.

2014 looks bright for Noble and Anadarko, but they aren't the only ones