Permian Has More Oil Than Thought: 4 Stocks Worth Tracking

Permian Has More Oil to Offer

USGS claimed that Delaware’s resources base contains more than double the volumes of oil in the Midland. According to the latest USGS estimation, the Bone Spring rock formations and the Wolfcamp shale in the Delaware sub-basin have 46.3 billion barrel of oil reserves and 281 trillion cubic feet of natural gas.

Importantly, the estimated natural gas reserves are 18 times more the amount of gas in the Midland sub-basin, added USGS.

Delaware Drillers in the Spotlight

Given that the Delaware sub-basin (the new Permian) has significantly more oil resources than Midland (the old Permian), prospects for upstream energy players with presence in the new Permian are bright. We would want investors to keep a track of the following Delaware drillers or continue to hold them if they are already part of their portfolio. Each of the stocks carries a Zacks Rank #3 (Hold). 

Headquartered in Houston, TX, EOG Resources, Inc. (EOG - Free Report) has as high as 4,815 net undrilled premium locations in the Delaware sub-basin, reflecting scope for production growth.

Devon Energy Corporation (DVN - Free Report), headquartered in Oklahoma City, has been ramping up activities in the new Permian. The average well productivity of the company in the resource is touching new records. Devon expects oil production to grow 42% through 2018 in the Delaware sub-basin, higher than 30% growth in 2017.

Mounting inventories of Occidental Petroleum Corporation (OXY - Free Report) — headquartered in Houston, TX — in Delaware’s Bone Springs formations and Wolfcamp play will likely help the company meet its target of 30% to 35% of compound annual production growth rate (CAGR) in the Permian from 2016 to 2019.

Diamondback Energy, Inc. (FANG - Free Report), headquartered in Midland, TX, has significantly expanded its total net acreage position in the broader Permian. The company’s prime focus is on Delaware’s Wolfcamp and Bone Spring formations. Investors should know that the company’s 7,200 net horizontal drilling areas, spreading across the Midland and Delaware basins, will likely boost production.

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