Back in February, the Wall Street Journal released an alarming report that revealed that the U.S. shell revolution Might be on its last legs. The breakneck 30% annual production growth by shale patches before the pandemic was such a sharp clip that it could only last for years before producers ran out of prime drilling locations.
Now, the boom in oil prices is in full swing, but shale producers have still chosen to hold off on increasing production, despite Highest oil prices in years And request to the White House To drill more. Many now prefer to return excess cash to shareholders in dividends and buybacks.
Meanwhile, equipment and labor shortages, as well as cost inflation, are making it difficult for Big Oil to exceed production targets this year.
In fact, limited inventory levels suggest that the era in which US shale companies could flood the world with oil is a thing of the past, and market power is steadily moving back to other producers, mainly overseas.
However, there are still some good opportunities for investors looking for Shell opportunities.
While many large frackers are keeping production levels stable, Another WSJ report says that smaller and more agile producers are leading in production gains as they seek to capitalize on the highest oil prices in seven years.
US shale production is projected to increase by more than 100,000 bpd to 8.7 million bpd in March, with smaller producers being the major ones. Shale drilling represents about 60% to 70% of US oil production.
Here are 3 shell companies that are set to ramp up their production and hopefully boost shareholder returns.
#1. continental resources
Market Cap: $19.8B
YTD Return: 25.4%
Oklahoma City-Based Continental Resources, Inc. (NYSE:CLR) explores, develops, produces and manages crude oil, natural gas and related products primarily in the North, South, and East regions of the United States. The company sells its crude oil and natural gas production to energy marketing companies, crude oil refining companies, and natural gas gathering and processing companies.
As of December 31, 2021, its proven reserves stood at 1,645 million barrels of crude oil equivalent (mmboe) with proven developed reserves of 908 mmboe.
A few days ago, Continental Resources announced that it would like to take advantage of higher crude oil prices and Raised guidance for full year oil production With an exit rate of 220K-230K bbl/day at the end of the year, a target of 200K-210K bbl/day from the earlier 195K-205K, which includes last month’s Powder River acquisition.
Continental also raised its natural gas production estimate from 1.04B-1.14B cf/day to 1.1B-1.2B cf/day. Continental’s planned growth follows a big jump in Q1 production, with oil production jumping 28% Y/Y to 194.8M bbl/day from 151.9M a year ago, and natural gas up 7.5% from 936.5M a year ago to 1.07B cf/day. The day is over. ,
Meanwhile, the company raised capex spending guidance for 2022 to $2.6B-$2.7B from $2.3B in 2021 and forecast a return on capital employed of up to 31% in the current year.
#2. EQT Corp.
Market Cap: $15.0B
YTD Return: 81.4%
EQT Corporation (NYSE: EQT) operates as a natural gas production company in the United States. The company produces natural gas, natural gas liquids (NGLs), including ethane, propane, isobutane, butane and natural gasoline. RELATED: Global energy shortage could be boon for tidal power
As of December 31, 2021, EQT had 25.0 trillion cubic feet of proven natural gas, NGL and crude oil reserves on approximately 2.0 million gross acres, including 1.7 million gross acres at Marcellus Play.
Last month, EQT Corp. unveiled a plan focused on producing more liquefied natural gas by dramatically increasing natural gas drilling in Appalachia and the country’s shale basins, as well as pipeline and export terminal capacity, saying it would not Not only will the United States promote energy security but also help break global dependence on coal and on countries such as Russia and Iran.
#3. Matador Resources
Market Cap: $6.0B
YTD Return: 29.5%
Matador Resource Company (NYSE: MTDR) is an independent energy company based in Dallas, Texas, that engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and midstream.
The company is primarily interested in the Wolfkamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford Shell Play in South Texas; and the Haynesville Shell and Cotton Valley plays in Northwest Louisiana.
As of December 31, 2021, its estimated total proven oil and natural gas reserves were 323.4 million barrels of oil equivalent, including 181.3 million stock tank barrels of oil and 852.5 billion cubic feet of natural gas. The company was previously known as Matador Holdco, Inc. and was renamed Matador Resources Company in August 2011.
Matador has announced that it expects “significant growth” in oil and natural gas production, which will increase to 107,000 barrels per day in the second quarter, up 14% from the previous three months. Matador also expects its capital spending to rise 31% to $675 million this year due to service cost inflation and new well drilling.
By Alex Kimani for Oilprice.com
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