5 Companies to Watch as Energy Stocks Surge
- Jul 09, 2018
- PR Newswire
American energy dominance is on the rise. In March 2018, the U.S. beat its all-time record and pumped more than 10.4 million barrels per day (bpd). Energy stocks are way up on strong forecasts of future demand. Mentioned in today's commentary includes: Exxon-Mobil Corp. (NYSE:XOM), Chevron Corp. (NYSE:CVX), Pioneer Natural Resources (NYSE:PXD), Marathon Oil (NYSE:MRO), PDC Energy, Inc (NASDAQ:PDCE).
A tight market is looming, regardless of OPEC's plans to pump more: outages are expected in multiple areas, offering up opportunities for American energy producers to swoop in. The last few years have seen the U.S. emerge as an energy powerhouse. And this is just the beginning.
The biggest of the American super-majors is going back to its roots. Exxon-Mobil, an industry giant with a market cap of $351.8 billion, has its hands in upstream, midstream and downstream. It's truly international, with operations and investments all over the world.
But increasingly, it's looking to the U.S. to cover its bottom-line. Both NGL and crude production from Exxon's U.S. properties have increased since 2013. In January, the company announced it would invest $35 billion in the U.S., in response to the generous tax cuts it received.
As other supermajors diversify and turn towards renewables and natural gas, Exxon is determined to remain a crude player-even if that has caused it to lose its market lead over Shell, narrowing the gap between the two firms to a mere $55 billion, according to Bloomberg. And even as it looks to the U.S., particularly the Permian Basin where it holds 6 billion barrels of oil equivalent (BOE), Exxon's international posture has grown more sturdy-it's adding to an already-impressive find off the coast of Guyana.
Exxon stock has risen steadily since the doldrums of February 2018, and the news from Guyana (as well as positive news from the OPEC conference in Vienna) should send it even higher. It always pays to bet on the biggest players. And they don't come any bigger than this.
For the last few years, "oil sands" has been a dirty word. Exploiting the heavy oil of the oil sands in the U.S. and Canada seemed too dirty, too wasteful and too expensive. Until now.
Petroteq Inc. has pioneered a proprietary method for extracting crude from oil sands…without the environmental downside. Better yet, the process is quick and cheap, producing oil for as little as $25 per barrel. It's a patented closed-loop system that requires no high temperatures and releases no greenhouse gases.
Petroteq has been experimenting with its new technique for years, but now the wait is over. The company's first facility at Asphalt Ridge in Utah is now up and running, with a target of 1,000 bpd in the first year and 5,000 bpd by 2020.
Existing oil sands extraction tech leaves ugly puddles of sludge and toxic trailing ponds. But not Petroteq's: the proprietary tech leaves no environmental footprint, and the sand left over from extraction is clean and can be resold.
According to Petroteq Chairman and CEO David Sealock, "no other company has what we have in this space." And, their technology is already proven in test results! Petroteq has already extracted 10,000 barrels of oil at the original plant on its site at Asphalt Ridge, Utah.
The Utah deposit is a major find: 86 million barrels of oil equivalent (BOE). Not only that, the deposit has excellent access to local infrastructure. At current prices, Petroteq's deposit is worth $6.2 billion. And that's just the beginning.
Utah alone has oil sands deposits worth 32 billion barrels, scattered over 8 large deposits. Across the Western United States, there are vast oil sands deposits worth 1 trillion barrels, one of the last great elephant fields that remains untapped.
Worldwide, there are more than twenty countries with untapped oil sands deposits. All told, there's 100 billion barrels of oil sands out there, worth $6 trillion.
The licensing opportunities for Petroteq are enormous. Companies across the globe are going to want to use the company's tech to exploit oil sands deposits. All Petroteq has to do is sit back and watch the fees roll in. The company is picking up steam. It's adding seats to its advisory council as its profile grows. Its Asphalt Ridge facility is up and running, and soon it'll be churning out clean oil sands product.
As oil prices stay high and the market tightens, demand for Petroteq's tech will only get stronger, particularly as bottlenecks hamper production increases in the Permian. The Utah oil sands could become the next Permian Basin. And Petroteq will be at the forefront.
A lot of companies got lured into the Permian Basin and abandoned their offshore plays during the years of low prices…but not Chevron. The U.S. supermajor held on to its offshore investments, and its earmarked $8 billion for new deepwater investments this year. But at least some of that money is going towards Permian production as well, indicating that Chevron is hedging its bets.
In January, Chevron made a big discovery in the Gulf of Mexico. Now, with the U.S. government dropping restrictions on offshore drilling, Chevron could lead the charge in a new round of deepwater projects.
Now could be the time to get back into offshore drilling-it's cheaper than ever. Since 2013 BP and Chevron have cut expenses in the Gulf of Mexico by 50 percent, through better technology and easier automation. More investments offshore could add to Chevron's portfolio…and make the supermajor another big winner from the U.S. energy revolution.
This Permian giant specializes in one thing: finding oil. And its shedding its assets throughout the U.S so that it can focus on the Permian Basin, full-time.
Pioneer recently sold Colorado acreage for $79 million. Now, its shifting its attention entirely to the Permian, where U.S. production has been rising but where bottlenecks may be bringing the party to an end.
Pioneer's Chairman Scott Sheffield told Bloomberg that Permian wells would have to start shutting down in the next 3-4 months if new pipelines don't come on-line. Some companies will get squeezed out, unable to move their product. But Sheffield is optimistic: by the fall, he predicts the U.S. will be the world's top oil producer.
Pioneer wants to outlast its competition, and it's in a good position to make that happen. The company owns 750,000 acres with more than 20,000 drilling sites in the Permian, Midland and Delaware basins. Pioneer is easily the biggest Permian player, with more than three times the acreage of its nearest competitors.
Even with bottlenecks, Pioneer should be able to retain its position in the Basin, and it may even expand its profile as other companies get squeezed out. When bottlenecks are eased by new pipelines (which are already being planned), Pioneer should profit handsomely from increased capacity.
With all the excitement surrounding the Permian Basin in the last year, a few of the other big shale plays have been left behind, including the Bakken shale play of North Dakota. But that's not true for one major U.S. producer: Marathon Oil.
Marathon has recently posted some impressive returns from its properties in the Bakken. Well performance in the last six months has doubled from the original figures. Cash flow is building on top of rising oil prices and falling per-barrel costs. With bottlenecking in the Permian, investments in other shale plays are starting to pay off handsomely.
Marathon Oil has engineered a "dramatic turnaround," selling off international properties and completing a transition from one of the weakest operators in the Bakken to one of the best. And it can only go up from here. With a sweeping infrastructure plan in place for the Bakken, Marathon's ability to capitalize on its Bakken assets should only strengthen. Like other U.S. operators, Marathon has a bright future ahead of it.
Other companies taking advantage of the oil boom:
PDC Energy, Inc (NASDAQ:PDCE) is an independent exploration and production company. With operations in Colorado, Texas, and Ohio, the company is well represented throughout the United States. Operating through two segments, oil and gas exploration and production, and gas marketing, the company's assets are diverse.
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This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that PETROTEQ will be able to produce oil as currently scheduled, at the rates of production announced and at the targeted low prices from its Utah property; that PETROTEQ will successfully develop a blockchain supply chain solution for the oil industry; that it will have customers and contracts for its supply chain technology; that oil will be as much in demand in future as currently expected; that PETROTEQ's technology is protected by patents and that it doesn't infringe on intellectual property rights of others; that PETROTEQ will find licensees for its technology and that it can patent its technology in many countries; that PETROTEQ's technology will work as well as expected; that blockchain technology will help PETROTEQ create a supply chain management system which can handle all transactions; and that PETROTEQ will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company's patents and other technology protection are not valid, patents may not be granted in countries where PETROTEQ wants to license its technology; production of oil may not be cost effective as expected, technology development costs may be much higher than expected, there may be construction delays and cost overruns at the production plants, PETROTEQ may not raise sufficient funds to carry out its plans, changing and increased costs for extraction and processing; technological results based on current data that may change with more detailed information or testing; blockchain technology may not be developed to be as useful as expected and PETROTEQ may not achieve its business plans; competitors may offer better technology; and despite the current expected viability of its projects, that the oil cannot be economically produced with its technology. Currently, PETROTEQ has no revenues.
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