The price war between Russia and Saudi Arabia produced the worst single day drop for WTI Crude since 1991. United States shale oil producers are facing a momentous crisis as prices have plunged below $35.
Many producers were already wrestling with high levels of debt, and the current situation threatens the future of dozens of companies.
Investors have reason for some optimism. Recent reports indicate that the Trump administration is entertaining the idea of a potential bailout for U.S. oil producers. Let’s take a quick snapshot at two top producers that may be worth buying on the dip.
Exxon Mobil (NYSE:XOM) is one of the largest oil and gas companies in the world. Its shares plunged 12.2% on March 9. The stock has now fallen 42% from the prior year. This was the largest single day drop for Exxon in 11 years.
It is very early in this rout, but shares possess a favourable price-to-earnings ratio of 13 and a price-to-book value of 0.9. The stock also boasts a tasty 8.3% dividend yield.
EOG Resources (NYSE:EOG) has been referred to as the "Apple of Oil" due to its use of technology and big data to compliment its drilling operations.
Its stock plummeted 32% on March 9. EOG recently said that its current drilling operations were "economic" at a $40 price tag. Without some relief in this area, EOG is facing major risks. If there is a shift, investors should keep in mind that EOG possesses a great balance sheet. Shares last had a favourable P/E ratio of 7.9 and a P/B value of 1.0.
