oil companies

Shale Oil Stocks are Poised to Earn Investors Big Profits

With oil production soaring in the United States, shale oil stocks will be pumping out profits for years to come.

It's all thanks to huge deposits of shale oil.

At least four new major shale oil plays including the Bakken in Montana and North Dakota, the Eagle Ford in Texas, and the Marcellus in Pennsylvania and New York, may have more than 20 billion barrels each of recoverable oil.

Each of these new shale oil plays has the potential to double the total reserves we have today.

In fact, the "shale oil revolution" will soon make the United States the world's leading producer of crude oil, a report from Goldman Sachs Group Inc. (NYSE: GS) recently predicted.

The United States will produce more than 10.7 million barrels of oil per day by 2017, the report said. That's more than any other country, including Saudi Arabia.

And even though oil prices are in a short-term swoon, the glut of shale oil is about to make savvy investors a huge fortune.

That's why you need to take a hard look at a particular group of shale oil stocks that stand to benefit most from this boom.

But first, you need to know how this came about.



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Oil Companies: The Search for Unconventional Sources Goes Into the Arctic

The black gold rush on the roof of the world accelerated on Saturday.

Norway's Statoil ASA (NYSE ADR: STO) signed a massive deal with Russian behemoth Rosneft in a venture that may require more than $100 billion over the next few decades.

Specifically, the company aims to help Rosneft develop untapped oil resources in the Arctic, as Moscow struggles to gain a competitive advantage given declining oil production in Siberia.

It's the third recent oil partnership for Rosneft.

Reuters reports:

"The agreement, signed on Saturday, provided a showcase for president-elect Vladimir Putin, serving out his final days as prime minister before a May 7 inauguration, and Deputy Prime Minister Igor Sechin, in charge of energy and industrial policy.

As a legacy of their time in government, the three deals secure capital and expertise for a push into some of the world's potentially most energy-rich regions."

The deal highlights a number of key issues for both oil companies and Moscow moving forward.

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Ride the Boom With These 5 Bakken Oil Shale Stocks

The Bakken oil shale boom is the opportunity of a lifetime.

With activity ramping up rapidly - production has soared from 100,000 barrels a day in 2005 to 494,000 barrels a day in February - the Bakken oil shale boom could turn out to be just as big, if not bigger than the California gold rush 1849.

Last week we told you about how the Bakken oil shale boom has affected Williston, ND. The town has an absurdly low unemployment rate of 0.8%, and the average pay for the oil company jobs is about $90,000.

One way to take advantage of this boom yourself would be to move to North Dakota.

But with dozens of companies flocking to the region, a much easier way to get in on the boom is to simply invest in some Bakken oil shale stocks.

The allure of big profits has attracted dozens of companies to the Bakken oil shale formation. The list ranges from industry giants like Exxon Mobil Corporation (NYSE: XOM) and ConocoPhillips (NYSE: COP) to pipeline companies like Enbridge Inc. (NYSE: ENB).

With oil prices expected to keep rising, and the production in the Bakken not expected to peak until 2020, it will be hard not to make money in Bakken oil shale stocks.

"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," Harold Hamm, CEO of Continental Resources Inc. (NYSE: CLR) - one of the major players in the Bakken oil shale boom -- told The Wall Street Journal last October. "We expect our reserves and production to triple over the next five years."

Still, some Bakken oil shale stocks will benefit more than others.

For example, the really big companies like Exxon, with large global operations, will see less of a boost than companies with operations concentrated in the Bakken and other North American shale deposits.

Money Morning has taken a look at these Bakken oil shale stocks and found five companies positioned to benefit most from this historic find's tremendous potential.



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Four Natural Gas Companies Investors Can Buy Right Now

Natural gas companies are hurting - there's no doubt about it. But that doesn't mean natural gas companies are bad investments.

In fact, some of these companies are currently on the bargain rack. You just have to know where to look.

Take EOG Resources Inc. (NYSE: EOG), for instance.

Traditionally known as a natural gas producer, EOG has reinvented itself as a major oil producer.

It's still heavily involved in the natural gas market, but the company also has managed to increase its total liquid oil production by 49% to 130,000 barrels per day.

Chief Executive Officer Mark G. Papa said he expects to reach 200,000 barrels per day this year. That would make EOG the second- or third-largest oil producer in the United States.

The effects of this transformation are evident in the company's earnings.

After taking a third-quarter loss of $70.9 million in 2010, EOG reported net income of $541 million for the third quarter of 2011.

That's not all. EOG's potential for growth is outstanding, since it has huge oil shale reserves. The company is the largest oil producer in both North Dakota's Bakken Shale and the Eagle Ford Shale in South Texas.

These two shale oil fields have played a key role in ramping up U.S. oil production over the past few years. They each have an estimated 4 billion barrels of recoverable reserves.

Earlier this month, analysts from Goldman Sachs Group Inc. (NYSE: GS) raised their EOG share price target to $118, while RBC Capital Markets (NYSE: RY) analysts set their target at $119. Those targets estimates represent a 13% to 14% premium from yesterday's (Tuesday's) closing price of $104.55.

And that's just one natural gas company with a strong investment pedigree.

Here are three others...

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Gasoline Price Outlook: An Epitaph For Sam the Service Station Man

I am a great believer in the American entrepreneurial spirit. In fact, the U.S. economy stands or falls on our ability to provide enough space to allow small folks to have big-time dreams.

However, when times get difficult, some little folks end up under the bus - along with their dreams.

To understand what I mean, let's take a look at my friend Sam.

Many of you may remember Sam, the proprietor of an out-of-the-way rural service station situated outside of Pittsburgh. I introduced him to Money Morning readers last summer in an essay: Gasoline-Price Forecasting: What Sam the Gas Station Owner Knows That We Don't.

I've known Sam for years.

So I was stunned to discover that he's throwing in the towel.




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Oil Patch Outlook: Oil's March Madness a Boost for Refiners

March Madness is still a few weeks away for college basketball fans, but the madness of March is in full swing for the oil sector. Turmoil in the Middle East sent oil prices up more than 6% last week - following a 5.2% gain in February. We also happen to be entering a time of year that has historically been good for energy prices and energy equities in recent decades.



Going back nearly 30 years - as the preceding graphic illustrates - March has been the best month for crude oil. By the end of the month, the price of oil is nearly 4% higher on average than the closing price on the last trading day of February.

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Oil Companies Pumping Profits as Crude Continues to Climb

Despite political fallout from the Gulf oil spill, drilling and oil services companies made big waves in the waning months of 2010. And they're likely to carry that success through 2011 as higher oil prices and political gridlock keep the profits pumping.

Baker Hughes Inc. (NYSE: BHI), Halliburton Co. (NYSE: HAL), Helmerich & Payne Inc. (NYSE: HP), and Occidental Petroleum Corp. (NYSE: OXY) are among the oil companies that produced outstanding results in the final three months of 2010.

Occidental, the largest onshore crude producer in the continental United States, reported a 29% increase in fourth-quarter profit. Net income climbed to $1.2 billion, or $1.49 a share, from $938 million, or $1.15 a share a year earlier.

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