Despite some fairly large onshore acquisitions over the past few years, big oil has largely remained on the sidelines when it comes to the shale oil and gas boom. When investors talk about the Bakken or the Eagle Ford, the names near the top of the list are not ExxonMobil or Chevron . Instead, it's the smaller independent producers like Continental Resources and EOG Resources that are using those plays to deliver unbelievable production growth.
It is also much harder for these two companies to grow by way of onshore shale assets. For example, it would take Exxon the equivalent of the production of 5,000 onshore wells just to equal the production of one deepwater well. This is because those gushers can produce upwards of 10,000-15,000 barrels of oil per day, while most shale wells just trickle out a few hundred barrels of oil per day. Again, for perspective, both EOG and Continental can deliver high-double-digit production growth by just drilling a few hundred onshore wells per year, even at those lower rates.
The shale plays really have changed the game for U.S. oil and gas production. However, shale plays simply are not large enough to drive production growth for big oil companies because they need to grow off of a much larger base. This is why big oil, for the most part, is looking offshore to deliver production growth.
XOM squandered $41 BILLION on the fiasco known as XTO. XTO shareholders laughed all the way to bank when the ghost of JD Rockefeller pulled out his fat wallet. JD won't be fooled again with the Bakken bubble known as EOG. How does it feel to use trains and 18 wheel rigs to haul your oil to market ?