Oasis is one of the many great Bakken growth stories. This is clearly evidenced by looking at production, which grew 82% year over year while reserves have grown at a compound annual rate of 121% since 2009. However, this isn’t growth by any means, as the company had seen a 16% reduction in well costs, which has helped improve its cash flow.
Kodiak Oil & Gas Corp (USA) (NYSE:KOG)
Joining Oasis in the Bakken as another king of cash flow growth is Kodiak Oil & Gas Corp (USA) (NYSE:KOG), which saw a five-year compounded annual growth of 165%. The story is much the same: Kodiak has been growing production and reserves while also working to get its well costs down. Since 2010, production has gone from 1,260 barrels of oil equivalent per day to a projected range of 29,000 to 31,000 barrels of oil equivalent per day this year. This has the company nearing the point where its cash flow will soon fully fund its drilling program, which is a real sign of sustainability.
Heckmann Corporation (NYSE:HEK)
So far, our list has been filled with exploration and production companies. Heckmann Corporation (NYSE:HEK), however, is an oil-field service company concentrating on providing water management services to the companies like those on this list. That business has generated a five-year annualized cash flow growth rate of 86%.
Like many of the names on this list, Heckmann has operations in the Bakken, which it just acquired last year. Outside of that, the company has operations in most of the major shale plays, with its revenue highly concentrated in the liquids-rich shale plays. Because of this, 70% of the company’s shale-related revenue is tied to liquids, meaning its cash flow growth isn’t likely to slow anytime soon.
The Foolish bottom line
Personally, my money’s in Heckmann because it’s tackling the important environmental issues surrounding the water used in fracking. However, there’s something for everyone on this list: Kodiak, Oasis, and Magnum Hunter Resources Corp (NYSE:MHR) are all growth-oriented exploration companies while Vanguard is an income-focused MLP. While each company is quickly growing operational cash flow, it’s important to drill down a little deeper before committing capital to any name on this list.
The article 5 Energy Companies Generating Enormous Cash Growth originally appeared on Fool.com.
Fool contributor Matt DiLallo owns shares of Heckmann and has the following options: short June 2013 $4 puts. The Motley Fool owns shares of Heckmann and has the following options: long Jan. 2014 $4 calls and short Jan. 2014 $3 puts.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
