Over the past year and four months, Saudi Arabia has played the long game and produced more crude as oil sank lower. Rather than cutting supply, the country has increased production in a move that has aggravated the 2 million-barrel-a-day oversupply problem in the industry.

Saudi Arabia has pursued this unconventional low-price oversupply strategy because it wants to reduce non-OPEC oil production, particularly U.S. oil production. The oil-rich kingdom believes it will make more money in the long run if it can deliver some blows to U.S. production while it's vulnerable. American oil production has increased by almost a million barrels a year over the past four years, from 5.5 million barrels per day in mid-2011 to a peak of 9.5 million barrels per day in May 2015 and threatens Saudi Arabia's traditional market share in the 96 million-barrel-per-day crude market. Weakening oil prices now will allow Saudi Arabia to keep its market share in the long run. Low oil prices will also postpone the time when renewable energy alternatives such as electric cars and solar become truly viable alternatives to gasoline-powered cars.

After several quarters of doubting whether Saudi Arabia will maintain its strategy, many investors have gotten the message, and crude prices have weakened considerably. At $30 a barrel, crude is nearing lows not seen in over a decade. While Saudi Arabia's strategy is clearly working, the country isn't without its own problems, and three companies -- ExxonMobil (XOM -0.05%), Chevron (CVX 0.08%), Schlumberger (SLB -1.17%) -- are strong enough to outlast Saudi Arabia at its own game. 

Saudi Arabia's Achilles' heel
Although no one disagrees that Saudi Arabia is the only meaningful swing producer on the market that can produce crude profitably at $15 per barrel, the country can't maintain its low-crude-price strategy indefinitely. Saudi Arabia has 3 million citizens who depend on government jobs to maintain their quality of life. The country has millions more who depend on government programs to supplement their incomes.

Because crude prices have fallen so far, Saudi Arabia doesn't have as much in the way of tax and export revenues as it did before, and the country has to cut its employment and subsidy programs as a consequence. Just last month, Saudi Arabia unveiled its 2016 fiscal budget of 840 billion riyals, or 14% below 2015's 975 billion riyal budget. In addition to announcing lower spending, the government announced price increases for essentials such as water, electricity, and fuel. The price increases, in conjunction with the potential de-pegging of the riyal from the dollar, make inflation in the country a big problem.

Given that Saudi Arabia isn't democratic, and considering the political uncertainties elsewhere in the Middle East, Saudi Arabia can only last as long as its population is willing to bear the lower spending. Saudi Arabia's dependence on its population gives its low price strategy a deadline, something that cash flow-positive private companies such as Schlumberger don't have. 

Three great buy-and-hold companies
As I mentioned, there are three companies with excellent balance sheets, attractive dividends, and sure paths to free cash flow-positive status even with the low crude prices.

First off, ExxonMobil is the most stable oil giant on the planet, with the sector's only "AAA" credit rating and a debt-to-equity ratio of 0.2. The company is a Dividend Aristocrat, with management having raised the dividend for 33 straight years in both good times and bad. ExxonMobil has been able to raise its dividend so consistently because it owns stakes in many of the world's premier oil and gas projects, which affords the company admirable returns on capital. ExxonMobil also has a big refining and chemicals business that benefits from low crude prices. For Q3 2015, ExxonMobil's downstream and chemicals unit accounted for $3.2 billion of the company's $4.2 billion in total earnings, more than covering the dividend payout of $3.06 billion. The strong downstream and chemical profits ensure that the company's $0.73-per-quarter dividend is secure, while ExxonMobil's strong balance sheet gives the giant an opportunity to buy other oil companies at low prices in value-adding transactions. 

Like ExxonMobil, Chevron is a Dividend Aristocrat, having raised its dividend payout every year since 1986. Because it has more of an upstream presence, Chevron's stock has fallen more than ExxonMobil's has. The larger upstream presence isn't a problem, however, as Chevron has an "AA" credit rating and a debt-to-equity ratio of 0.23. The company is also cutting costs and selling non-core assets, and it plans to be free cash flow-positive by 2017. Helping Chevron's cash flow is that many of Chevron's growth projects will come online over the next few years. 

Of the three companies, Schlumberger has been the most aggressive at cutting costs, with management having laid off 20,000 of its 123,000 employees in 2015 and potentially laying off another 10,000 more this year. Although painful, the layoffs have shored up Schlumberger's bottom line and have improved the company's overall sustainability. Because of the cost cuts, Schlumberger's EBITDA margins have declined just 200 basis points since the beginning of the crude price weakness in Q3 2014 and the company's free cash flow has more than covered its dividend. For 2015, Schlumberger made $5 billion in free cash flow, or double the company's annual dividend payout of $2.5 billion. Management has used some of the remaining free cash flow to buy back shares at low prices. The company recently announced a buyback authorization of $10 billion that would reduce the float by 12.5% at current prices. 

Investor takeaway
While the low oil prices today show that Saudi Arabia is winning, the country can't outlast ExxonMobil, Chevron, or Schlumberger, each of which has rock-solid balance sheets and don't have citizens who will riot if things get bad. With their attractive dividend yields, the three energy companies are great buys that offer unparalleled risk-reward profiles for energy investors.