There are lots of places to drill in the Mississippi Lime to find liquid oil, and Devon Energy Corp (NYSE:DVN) is utilizing new strategies to find as much oil as it can.
1,000 ways to profit Devon sees 1,000 potential places to drill in the area, and that number is growing. As Devon starts utilizing more 3D seismic imaging to find places to drill, Devon's drilling inventory and reserves could increase. This would make its growth runway in the play longer and push up growth further.
Devon has seen over 100% production growth in the area since March (as of the end of June), which has pushed production up to 7,000 barrels of oil equivalent a day. Devon sees production rising even higher by the end of 2013 with 350 planned well completions. This is made possible by Devon operating 15 rigs in the area with an average well completion time of 12 days per well.
Devon has high hopes for the Mississippi Lime play, and investors should too: 3D seismic imaging could increase the growth runway as numerous wells come online by the end of 2013.
Devon has been heavily focusing on North America, and more specifically on North American shale plays. This focus has enabled Devon to boost its production from the region to 169-173 thousand barrels of oil equivalent per day by the end of 2013, up from 66 thousand barrels of oil equivalent per day in 2006.
Devon doesn't put all its eggs in one basket, however. It's also invested in another play, the Permian Basin.
Texas, the land of opportunity The Permian Basin, located in Texas, offers amazing growth potential. Devon is a major land holder in the Basin with 1.3 million net acres in the play. This huge position has given Devon over 8,000 possible locations to drill with 2.8 billion barrels of oil equivalent in recoverable reserves for Devon to extract.
Devon sees the potential of this field and has plans to complete 300 wells in 2013 with 27 rigs operating in the area. This will enable Devon to meet its guidance to boost production in the area by 40% in 2013.
Devon is worth considering because of the numerous shale plays that offer long growth runways for years to come. Onshore North American oil production will keep increasing for years to come, allowing Devon to invest the additional cash flow right back into its business.
Another play that offers similar growth potential is the iconic Bakken up in North Dakota, and Marathon Oil Corporation (NYSE:MRO) keeps raising production estimates in the area every year.
A little bit more, and a little bit more, and BOOM In 2009, Marathon saw Bakken production peaking in 2014 and then slowly declining. By 2012, Marathon saw 2014 as the time when production would take off and start significantly increasing. Now, in 2013, Marathon sees this as the year of booming production and has forecasted growth increases all the way through 2018.
This is a very good sign and has been aided by increasing 30-day production levels. In 2008 Marathon's average 30-day production level was around 150 barrels per day in the play. That average has increased by 500% since then to about 850 barrels per day.