• 10 mins PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 4 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 5 hours Schlumberger Warns Of Moderating Investment In North America
  • 6 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 7 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 9 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 10 hours New Video Game Targets Oil Infrastructure
  • 12 hours Shell Restarts Bonny Light Exports
  • 13 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 19 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 1 day Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Saudi Arabia Looks To Shelve Aramco IPO

Saudi sources have confirmed that…

Alt Text

Europe Stands Divided On Gazprom’s Nord Stream 2 Pipeline

Gazprom’s Nord Stream 2 megaproject…

Alt Text

This Unexpected Move Could Derail Mexico’s Oil Boom

A possibly disastrous move from…

Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

More Info

Three Eagle Ford Stocks Worth A Look

Three Eagle Ford Stocks Worth A Look

Investors in oil stocks are finding out lately just how painful an oil supply glut can be. At a time like this though, one key for investors is to look at the companies that are buckling down and running their businesses efficiently. The companies that will thrive in today’s environment are those that run productive wells at a low cost. And one of the best places to find these firms is in the Eagle Ford Shale area.

The list of operators in the Eagle Ford Shale area is long, but one firm that stands out is Devon Energy (NYSE: DVN). Devon is an upstream oil and gas producer with some assets in Canada and the Rockies, but most of its operations are in Texas. Related: This Nation Is Poised For A Massive Refining Boom

Devon has an attractive valuation, a significant growth profile, and much of the restructuring work that other energy companies are going through right now has already been done by Devon. The company started restructuring in 2010, including divesting the bulk of its offshore and international assets. The company then used the improved balance sheet to focus on the North American markets just as the shale revolution was taking off. It now has major holdings in Eagle Ford, the Permian Basin, and the Anadarko Basin.

Roughly half of the company’s 2015 production is hedged at $91 a barrel, and as such, the company’s fortunes are less pegged to oil prices right now than many of its peers.
Devon has highly productive acreage with dirt cheap production costs, especially in the Eagle Ford. Analysts are enthused about the stock, but while the price has moved up somewhat in the last few weeks, there is still plenty of room to run from here. Related: Do Or Die For Mexico’s Neglected Oil Sector

Another top choice in the Eagle Ford is Marathon Oil (NYSE: MRO). The stock has started to see upgrades from analysts in the last month or so but the stock price has actually come back down in recent weeks, offering a good entry point for investors. Marathon’s assets in Eagle Ford, Bakken, and other areas are low cost, with inventory up to potentially twenty years. As a result, while investors were not thrilled with the most recent earnings report, this stock would be more of a long-term play. Management is prudently reducing costs and cutting capex, all while improving the efficiency of drilling. From an earnings standpoint, the next couple of years may be still tough, but for the long-term investor, Marathon offers a lot of upside.

Finally, Carrizo Oil & Gas (NASDAQ: CRCO) has also started getting more positive attention from the Street, due to its diverse production and acreage portfolio. The company has solid proven assets in the Utica Shale region of Ohio, the Niobrara Formation in Colorado, the Marcellus Shale, and the Eagle Ford Shale. Carrizo has excellent scale, low costs, and plenty of liquidity on the balance sheet. This last point is especially important, as it may allow Carrizo to make some targeted acquisitions in certain areas at today’s rock bottom prices.

Related: US Shale Will Not Bounce Back At Current Prices

There has not been as much M&A activity as one might have expected so far in E&P, probably as a result of a wide gap on asset valuations between buyers and sellers, but sooner or later that will change.

Now these companies are not the only good investments in Eagle Ford – in fact per barrel production costs are coming down across the region and this appears likely to continue. However, for serious E&P investors, these three stocks are definitely worth some consideration.

By Michael McDonald of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News