American Oil Patch Investors Today Are in for a Wild, Rich Ride
NEW YORK (TheStreet) -- During the last energy decade, the booming 1970s, investors could simply pick up international oil companies like Exxon (now Exxon-Mobil
It's not that simple these days. Today's boom is not only American, but it belongs to dedicated exploration companies, not the oil majors. Fracking is very expensive, meaning price swings can wipe out profits. You have to pay attention to infrastructure. But the gains can, if anything, be sweeter.
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The easiest way to play has been to stick with the oilfield service giants, the "arms merchants" for the fracking revolution. Over the last five years shares of Baker Hughes
Schlumberger's numbers would do any tech CEO proud. Revenues from 2010 to 2013 are up 78% and profits have grown in-line with that revenue. Last year the company brought 14.4% of revenue, $6.732 billion, $1.21 per share, to the net income line.
But what if you want to play the oil itself? In that case you need to know your plays, and who leads in each one. Fortunately the Energy Information Agency EIA keeps monthly tabs on the numbers, and a little more research will reveal the leaders:
The largest play right now is the Permian in West Texas. It was producing 1.68 million barrels per day this month, and that should grow by another 38,000 barrels/day next month. The biggest production is coming out of the so-called Spraberry area where the biggest producer is Pioneer Natural Resources
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