Marathon Oil Corporation (MRO), Devon Energy Among Billionaire Louis Bacon’s Energy Picks

EOG Resources, Inc. (NYSE:EOG) has moved its focus to unconventional liquids, shifting its portfolio mix to limit exposure to gas volatility. Specifically, the oil and gas company has shifted to horizontal oil prospects versus deepwater plays or Canadian oil sands. The energy company is targeting FY2012 production to be up 11%, compared to 9% in 2011 – this includes oil production up 40%. EOG plans to focus upwards of 90% of this year’s CapEx on liquids-rich plays, and has divested $1.2 billion of non-core assets to offset an expected funding gap. EOG trades in the mid-range of its peers at 27x earnings and 6.5x free cash flow, but it does have some of the more robust growth prospects – expected to grow 5-year EPS at 22% annually. Billionaire Jim Simons was one EOG’s top-name investors last quarter (see Jim Simon’s top picks).

Kodiak Oil & Gas Corp (NYSE:KOG) is focused on the exploration and production of crude oil and natural gas in the United States. Kodiak now looks to develop its robust portfolio of assets. The energy company plans to grow production 80% year over year during the interim. Worth noting is that Kodiak does trade at the high end of the industry on a valuation basis at 9.8x 2012 EBIDTA, versus the industry average of 6.9x; not to mention its 40x P/E, which is well above Marathon (12x) and EOG (27x). Steven Cohen of SAC Capital upped his stake by 600% in the oil and gas company last quarter (check out Steven Cohen’s big bets).

Clearly, Bacon has made big bets in the energy markets, from natural gas, conventional oil to oil sands projects. While it appears Kodiak might be gearing up for a production overhaul, its valuation is a bit rich, but EOG is one of the better value plays. We like Devon’s monetization strategy, but believe growth in the interim will be limited. Meanwhile, Oasis’ growth prospects look solid and its valuation appears a bit cheap. Marathon is one of the larger energy picks by Bacon – one that pays a decent dividend and presents investors with a value opportunity.

For more related coverage, continue reading below:

Louis Bacon’s Full 13F Portfolio

Fisher Likes Apple, Cisco and More

Why Does Bacon Like Dollar General?