The International Energy Agency (IEA) predicts that the domestic oil and gas boom will lead to a transformation of the global energy map and make the United States the world's largest producer of crude oil by 2020. These predictions and others regarding global supply and demand trends for crude oil and natural gas were contained in the latest edition of the World Energy Outlook (WEO), released in Nov. 2012.

Applying The MACD Indicator With MetaTrader 4: How to use MetaTrader 4, a trading platform used for online trading in the forex, CFD and futures markets.

World Energy Outlook
The IEA estimates that the production of commodities like crude oil and liquids in the U.S. will peak at 11.1 million barrels per day in 2020, up from 8.1 million barrels per day in 2011. This growth will be led by the development of numerous domestic tight oil and shale oil formations. Oil demand in the U.S. is also expected to fall over that time frame and beyond due to increased fuel efficiency in the transportation sector.

The combination of these two factors will lead to a dramatic decrease in the need for imported crude oil. The IEA estimates that North America will become a net oil exporter by 2030, helped by the development of the oil sands deposits in Canada. The U.S. currently imports 20% of its total energy requirements, but is projected to become energy self-sufficient by 2035 on a net basis, according to the IEA.

Independent Oil and Gas Sector
The exploration and production industry has been the leader in exploring and developing oil and gas fields in the U.S., through the application of horizontal drilling and hydraulic fracturing. These techniques allow the recovery of resources from formations once thought uneconomic to produce.

Most of the recent growth in domestic oil production has come from the development of the Bakken in the Williston Basin and Eagle Ford Shale in Texas, with these two plays accounting for 82% of the growth of horizontal crude oil production.

Continental Resources (NYSE:CLR) is one of the fastest-growing operators and was an early mover in the development of the Bakken petroleum system in Montana and North Dakota. The company is the largest leaseholder and will have 1.1 million acres after a recently-announced acquisition closes. The company expects oil and gas production in 2013 to grow from 30 to 35% over last year as it continues to exploit this prolific play.

Another rapidly-growing operator in the Bakken play is Kodiak Oil and Gas (NYSE:KOG), which has 153,000 net acres under lease. The company reported production of approximately 3,900 barrels of oil equivalent (BOE) per day in 2011 and expects to exit 2012 with production of 27,000 BOE per day.

Eagle Ford Shale
EOG Resources (NYSE:EOG) has 644,000 net acres exposed to the Eagle Ford Shale, with about 90% of the leasehold in the oil window of the play. The company reported net production of 109,000 BOE per day from the Eagle Ford Shale in the third quarter of 2012 and estimates that it has 1.6 billion BOE of potential oil and gas resources on its properties.

Chesapeake Energy (NYSE:CHK) is also active in the Eagle Ford Shale and has 490,000 net acres under lease here. The company reported net production of 52,200 BOE per day from the Eagle Ford Shale in the third quarter of 2012, with approximately 68% of this production stream composed of crude oil.

The Bottom Line
The frenzy over peak oil reached a crescendo a few years back with advocates of this theory dismissing anyone who didn't agree with the prediction that global production of oil was close to reaching a peak. The energy industry wisely ignored this nonsense and one can only hope that one day we can bury M. King Hubbert once and for all.

At the time of writing, Eric Fox did not own any shares in any company mentioned in this article.

Related Articles
  1. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  2. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  3. Investing

    Have Commodities Bottomed?

    Commodity prices have been heading lower for more than four years, being the worst performing asset class of 2015 with more losses in cyclical commodities.
  4. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  5. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  6. Investing

    Oil: Why Not to Put Faith in Forecasts

    West Texas Intermediate oil futures have recently made pronounced movements. What do they bode for the world market?
  7. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  8. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  9. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  10. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!