Energy Business

10 US Oil Companies Still Likely to Thrive in 2030

Baker Hughes

Baker Hughes Co. (NYSE: BKR) is on the journey to recapture its post-GE independence, and the company is a leader in its field, with more than $20 billion in annual revenues. The oil and gas services player declared its regular dividend in May, and it still has roughly a 4.2% dividend yield. The company is integrated in the services and equipment sector in energy, and, for better or worse, it can get through most periods of extreme oil weakness due to its ability to furlough workers during hard times.

Capital spending also can be tempered in hard times. The U.S. rig count has continued to shrink in 2020, and that can be inferred as low production in the upcoming months. The company also has targeted keeping a $3 billion cash level, along with positive cash flow and free cash flow.

Cabot Oil & Gas

Cabot Oil & Gas Corp. (NYSE: COG) is a pure-play oil and gas producer in the Marcellus Shale in northeast Pennsylvania, and the company uses its own horizontal drilling that has seen a rise in production and reserve growth over time. The company claims to have 173,000 net acres in the dry gas window and to have drilled nearly 800 net horizontal wells in its 10 years there. Cabot has plans to add net horizontal wells and its reserves include 12.9 trillion cubic feet of gas and a hedged portfolio. It has more concentration in operations than others.

Analysts expect Cabot to remain profitable in 2020 and then return to growth in 2021. None of the analysts expects it to lose money, and its 2% dividend yield actually looks safe. With a total of $3.2 billion as a borrowing base, the $200 million in cash and $1.5 billion credit facility leaves $1.7 billion in liquidity. With an $8 billion market cap, Cabot has tended to be less volatile than other oil and gas stocks.


Chevron Corp. (NYSE: CVX) is the number-two domestic integrated player behind Exxon, but now with close to 10% of a size differential. Chevron also has a high 5.5% dividend yield, but the investment community has touted for some time that Chevron has a less stressed balance sheet than Exxon. On top of its major operations in the West Coast, the Permian, Gulf of Mexico, the Appalachian Basin, mid-continental United States, infrastructure and renewables, Chevron’s global footprint extends to at least 25 other country-specific operations.

Chevron is rated as Aa2 at Moody’s, and its AA rating at S&P was on Negative watch. At $94.00 a share, it has a market cap of $175 billion, and the 52-week trading range is $51.60 to $127.00. Chevron has pledged to keep its dividend, but one day it also may have to consider a lower payout, along with lower capital spending, cost cuts, using new technologies and so on, while it keeps a firm grasp on its capital.

Concho Resources

Concho Resources Inc. (NYSE: CXO) was still listed as investment grade and one of the top Permian Basin producers. It has a large drilling inventory that is targeted around oil, and it actively hedges production to keep a profitable operating structure. With an $11 billion market cap, it has a dividend yield of 1.4%.

Concho is expected to remain profitable in a weak pricing environment. The company generally targets lower leverage and keeping capital spending levels within reach of cash flows. Concho lost about 60% of its value from the start of 2020 through mid-March, and the company has taken a large $12 billion charge and cut its capital spending targets.


ConocoPhillips (NYSE: COP) is a key player in exploration and production in North America, Europe, Asia, North Africa, the Middle East and elsewhere, with multiple targets in oil and gas using conventional and unconventional plays. The company has a large global scale that is deemed to be more weighted to oil with a low-cost structure, above-peer margins and free cash flow. It has even been said to have a lower portfolio decline rate, and it saw significant debt reduction in recent years.

ConocoPhillips had 5.3 billion barrels of proven reserves in crude oil at the end of 2019, with about 1.35 million daily barrels of production. Moody’s had an A3 rating late in 2019 but noted in April that ultra-low oil prices will hurt earnings and cut its large cash balance. Fitch Ratings had an A rating as of late 2019. At $44.50 per share, ConocoPhillips is worth $48 billion, and its 52-week trading range is $20.84 to $67.13. The dividend yield is about 3.8%.

Enterprise Products

Enterprise Products Partners L.P. (NYSE: EPD) is the de facto king of oil and gas infrastructure, and it is highly diversified. The master limited partnership (MLP) model is supposed to act as a buffer to energy prices themselves and act more like a “toll road” model, but the reality is that when the oil industry heads south it hits the MLPs as well. It takes pipelines and infrastructure assets for any energy products to be moved around the nation. The good news is that Enterprise has many thousands of miles of those pipelines for crude, gas and refined products.

Enterprise also owns and operates key infrastructure and processing facilities and other forms of shipping and transportation. Because its units were still under $20, the distribution comes with a yield equivalent of about 9%, although that is quite high versus historical yields, considering its size and being a best-in-class leader in MLPs. The company is known for keeping a relatively conservative financial leverage relative to peers, but in the current climate “relative” matters more than ever.

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