Like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX) has almost no debt with a total debt to equity ratio of 0.10. It can use its size to maintain production levels in a sideways oil market.
Suncor Energy Inc. (USA) (NYSE:SU) isn’t a $200 billion oil major, but it is one of the lowest cost oil sands producers. From 2011 to Q1, 2013 it has managed to lower cash operating costs in Canadian dollars from $39.05 to $34.80. The company is planning to grow its production by 350 thousand barrels per day (kb/d) by 2020. This will be a major boost from its current bitumen production around 450 kb/d.
Suncor Energy Inc. (USA) (NYSE:SU)’s debt load isn’t excessive with a total debt to equity ratio of 0.28. Recently the company has taken a number of hits including a $1.5 billion write down. Over the next decade its fortunes are looking up as a number of new pipelines should make it easier for Suncor to get its products to market.
Peak oil is still here, but it is seen in strong inflation and elevated transportation costs. In this environment pure crude oil ETFs should be avoided because it is very unlikely that oil prices will spike over a short time frame. ExxonMobil and Chevron Corporation (NYSE:CVX) are two strong investments in this environment. They use their extensive capital base and low cost production to drive high returns. Suncor is another company to look at with its low-cost oil sands production.
The article Has the EIA Killed Peak Oil? originally appeared on Fool.com and is written by Joshua Bondy.
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