Four ETFs For The Eagle Ford Shale
It seems like hardly a week goes by without at least one tidbit of positive news crossing the wires that's related to the Eagle Ford Shale, a 24-county area in South Texas that may be one of the best hopes the U.S. has for making a dent in its dependence on foreign oil.
Earlier this week, Enterprise Products Partners (NYSE: EPD), the largest U.S. MLP and the operator of a major Eagle Ford pipeline, said it sees production rising at Eagle Ford rising to 750,000-800,000 barrels per day from previous estimates of 400,000-500,000 barrels per day.
Some estimates have said Eagle Ford, which is believed to hold much more oil than natural gas, could eventually be pumping 1 million barrels a day. That's good news for the U.S. economy, but there may be some good news for ETF investors, too. Have a look at these ETFs that offer healthy exposure to the Eagle Ford Shale.
1) iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (NYSE: IEO): Earlier this year, Anadarko Petroleum (NYSE: APC) laid claim to being the largest Eagle Ford producer. Rival Apache (NYSE: APA), the largest U.S. independent oil and gas producer, has a major Eagle Ford presence, as do Chesapeake Energy (NYSE: CHK), EOG Resources (NYSE: EOG) and Newfield Exploration (NYSE: NFX).
Combined, those stocks account for over 28% of IEO's weight, so this is almost an Eagle Ford ETF even though it doesn't say that in its title.
2) Energy Select Sector SPDR (NYSE: XLE): While ConocoPhillips (NYSE: COP), the third-largest U.S. oil company, is the only of the major integrateds with big Eagle Ford acreage, Exxon Mobil (NYSE: XOM), the largest U.S. oil company has a bit presence there as well. Marathon Oil (NYSE: MRO) just made a sizeable Eagle Ford acreage buy and Apache and Anadarko are also found in XLE's top-10 holdings. Combined, the aforementioned stocks account for about 29% of XLE's weight.
3) JPMorgan Alerian MLP Index ETN (NYSE: AMJ): Someone has to get all that oil of Eagle Ford, right? Hence the case for using some high-yielding MLPs as a way of getting some Eagle Ford exposure. Enterprise Products, Kinder Morgan (NYSE: KMP) and Oneok (NYSE: OKS) are among the big MLPs with Eagle Ford footprints.
4) SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP): Home to over 70 stocks, none of which gets an individual weight of more than 1.9%, XOP is chock full of both large- and mid-cap companies with Eagle Ford exposure. Not only will you find the likes of Apache, EOG, Marathon, etc. here, XOP holds mid-cap Eagle Ford players such as Petrohawk (NYSE: HK) and Carrizo Oil & Gas (Nasdaq: CRZO).
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