In 2017, my “litmus test” for oil producers is whether they can operate within their respective cash flow. I say this for a couple of reasons. First, it looks as if bond yields are rising, meaning that debt will generally become more expensive. Second, this will be year three of sub-$60 crude oil, and upstream oil producers have now had ample time to make adjustments to live within cash flow. The CEO of a major upstream producer, at an analyst day meeting, recently quipped that energy companies must not “wait around for higher oil prices to bail out their business models.”

I couldn’t agree more, and that’s why I like EOG Resources (EOG) . It is arguably the strongest shale player there is. It has over half a million net acres right in the Eagle Ford oil window, and is the top producer in the Eagle Ford. EOG is also one of the largest producers in the Bakken, and it has a premier position in the Delaware Basin, a position it has been delineating and exploiting very well in 2016.

Over the last few years and throughout the price downturn in oil, EOG has been improving its economics by continually improving its drilling technique in each of these basins and also high-grading its portfolio and setting aside what it calls “premium” drilling locations. These “premium” locations average an internal rate of return of 30% if WTI were at $40, well above the generally-recognized threshold minimal return of 20%. Up at $50 WTI, that internal rate of return rises to 60%, and at $60 WTI these “premium” wells return over 100%. The best part about this is that EOG has amassed about 10 years’ worth of “premium” drilling inventory, at the current rate.

EOG has managed to build up such an impressive inventory by being an early mover in shale plays, that it ended up being the most economical, and then relentlessly improved drilling time, drilling cost and ultimate oil recovery. EOG has also delineated its acreage in the Permian. In successfully mapping out the shale rock of the area, the company has increased the oily portion of its production there, in what was originally thought to be a “combo play.”

The fruit of that labor speaks for itself: Recently, management raised its oil growth outlook to 15-25% CAGR between 2017 and 2020. That’s not just a one-year forecast, but a four-year forecast. Even better, EOG intends to do all this entirely organically, meaning this remarkable growth will be paid for entirely from the company’s operating cash flow. If there’s another major oil company that can manage to grow production like that without any funding gaps, I’d sure like to know what it is.

As of this morning, EOG is still about 25% off its highs in mid-2014. Sure, this stock isn’t down nearly as much as some other oil companies, but there’s a good reason for that. The market recognizes EOG is a high-quality upstream name. EOG is one of those names that will get better even if crude bounces around where it is right now, and would do absolutely great if crude were to reach $60. If you want to be in an upstream energy company, I believe EOG should be on your short-list.

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