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An oil pumping unit is silhouetted by the setting sun in this file photo. (CHARLIE RIEDEL/AP)
An oil pumping unit is silhouetted by the setting sun in this file photo. (CHARLIE RIEDEL/AP)

NUMBER CRUNCHER

24 producers priming for U.S. oil boom Add to ...

Mr. Bowman is a portfolio manager at Hamilton-based Wickham Investment Counsel Inc., an adviser to high net worth clients. michael@wickhaminvestments.com

What are we looking for?

According to the latest edition of BP’s Statistical Review of World Energy, U.S. oil production grew last year at the fastest pace since 1965. An increase in output of about a million barrels a day caused net oil imports to the United States to drop 36 per cent below their 2005 peak. My colleague Allan Meyer and I thought we would take a look at U.S. oil producers.

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The screen

Since the International Energy Agency has predicted that the United States will be the world’s largest oil producer by 2018, we wanted to show which companies have grown the most production (barrels of oil equivalent, or BOE) per share in the past year. We have sorted the companies by this metric, and we only included companies with more than a 5-per-cent growth rate.

The price to cash flow (P/CF) shows the one-year forward-looking cash flow based on analysts’ estimates compared to the current share price. A high ratio indicates that the stock price is expensive relative to its cash flow. A smaller ratio is preferred.

What did we find?

Pioneer Natural Resources is an active Texas driller and the largest company on our screen, both in terms of capitalization and BOE production.

Houston-based Magnum Hunter drills in five states and also in Saskatchewan. The company has grown BOE production by over 143 per cent in the past 12 months. The company also scores well with its better than average P/CF.

Northern Oil is a prolific driller in the Bakken area of North Dakota and Montana where it controls 182,000 acres. Its low P/CF and high BOE growth makes it one of the standouts on our screen.

Small producer Sanchez Energy sports a low P/CF and over 83-per-cent production growth in the past 12 months. It owns substantial acreage in the large Haynesville shale play in Montana.

One of the largest unconventional resource plays in the United States is the Eagle Ford Shale in South Texas, and that is where you will find Rosetta Resources. The company’s P/CF is under four, with a 33-per-cent BOE growth rate. The company was spun out of Calpine Corp., a major power producer.

Fracturing technology is transforming the industry, and the world. As always, investors should contact a qualified investment professional, or do their own research.

 

U.S. oil producers ranked by output growth per share

Company Symbol Market Cap
($-mil)
Recent
Price $
Magnum Hunter MHR-N 634 3.68
Northern Oil NOG-A 865 13.63
Sanchez Energy SN-N 757 21.69
Evolution Petroleum EPM-A 309 10.78
Continental Res. CLR-N 15,866 85.58
Rex Energy Corp REXX-Q 913 16.80
Range Resources RRC-N 11,895 73.49
Rosetta Resource ROSE-Q 2,777 45.23
EPL Oil & Gas EPL-N 1,178 29.51
Concho Resources CXO-N 8,981 85.54

All currencies U.S. Source: Wickham Investment Counsel Inc., Bloomberg

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  • MHR-N
  • NOG-A
  • SN-N
  • EPM-A
  • CLR-N
  • REXX-Q
  • RRC-N
  • ROSE-Q
  • EPL-N
  • CXO-N
  • SM-N
  • CRZO-Q
  • WLL-N
  • PXD-N
  • QEP-N
  • SGY-N
  • DNR-N
  • REN-N
  • LPI-N
  • EXXI-Q
  • BBG-N
  • SFY-N
  • XEC-N
  • ROYT-N
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