The Eagle Ford shale formation in Southern Texas is the largest oil formation in the United States - and it's making investors very rich.
In fact, its daily production of more than 1.36 million barrels is going to lift these oil stock prices in 2014...
You see, the production from Eagle Ford has increased at an incredible rate. The shale formation now produces about 25 times as much oil as it did in 2010.
Oil drilling in Eagle Ford didn't begin until 2009, but it has already surpassed the Bakken Shale in North Dakota as the largest tight oil formation in the United States. According to the U.S. Energy Information Administration (EIA), the formation's tight oil reserves jumped to 3.37 billion barrels in 2012, up from 1.25 billion in 2011.
"In March 2013, Texas oil production reached its highest level since 1984," Money Morning's Global Energy Strategist Dr. Kent Moors said. "In all, the Lone Star State pumped more than 74 million barrels of crude, which means if Texas were a country, it would be one of the 15 largest oil producers in the world."
Soaring output from Texas helped the United States account for 10% of the global oil output in the fourth quarter of 2013. Eagle Ford and the Bakken combined to produce 63% of the United States' oil production in 2013.
"Vast new fields and new drilling techniques developed in the U.S. have created a 'supply shock' that is turning the global energy industry on its head," Moors said.
The Eagle Ford's surging output is one of the main reasons why the International Energy Agency (IEA) expects the United States to be the world's top oil producer by 2015, and continue to lead production through the 2020s.
This means investors can play this trend now. Here are three oil stock prices that will climb higher in 2014 thanks to the Eagle Ford oil boom.
Watch These Oil Stock Prices in 2014
EOG Resources Inc. (NYSE: EOG) is a crude oil producer that has experienced huge output gains from Eagle Ford. In 2012, EOG increased production from the Eagle Ford by 150% to 94.4 million barrels of oil equivalent (Boe). That makes it the largest oil producer operating on the formation. According to the company, "EOG was one of the first companies to recognize the potential of the Eagle Ford Shale and captured what EOG believes to be the best crude oil acreage position within the play." EOG stock has gained nearly 21% year to date, and nearly 70% in the last 12 months. EOG is positioned perfectly to ride the booming Eagle Ford.
NuStar Energy L.P. (NYSE: NS) is an oil transportation company that operates pipelines from Eagle Ford. Just this month, NuStar opened a third dock in Corpus Christ, Texas, which is just 100 miles from the Eagle Ford formation. The new dock is connected to NuStar's 1.6 million barrel storage terminal and has doubled its loading capacity to 30,000 barrels per hour. NuStar ships to refineries along the Gulf Coast, as well as the East Coasts of the United States and Canada. Shares of NS stock have gained 7% in 2014.
Chesapeake Energy Corp. (NYSE: CHK) is the second-largest natural gas producer in the United States, but it is also heavily involved with crude oil and holds a leading position in the Eagle Ford. As of 2013, CHK was the second largest oil producer in the Eagle Ford, behind EOG. In 2013, CHK was producing more than 57,000 barrels daily from Eagle Ford. The company has a partnership with CNOOC Ltd. (NYSE ADR: CEO) in the formation, and the company owns more than 380,000 acres in the formation. CHK stock has climbed almost 9% in the last month and is up almost 43% in the last year.
Have you made money betting on the right oil stock prices to rise? What oil stocks have piqued your interest in 2014? Let us know on Twitter @moneymorning using #OilStocks
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Eagle Ford's Exports Spur Boom at Port of Corpus Christi
- Houston Business Journal:
Eagle Ford and Other Tight Oil Spots Helped U.S. Dominate Global Oil Production