Oil & Gas Exploration & Production covers the companies that find and produce crude oil and natural gas, along with mineral and royalty owners. MoatScope covers 87 companies here. One has a wide moat, 15 a narrow moat and 71 none.
How the industry makes money
Producers are price takers: profit is the oil or gas price minus the cost of drilling and operating wells. Wells decline quickly, so producers must keep reinvesting just to hold output steady, and the quality of their acreage decides how much each dollar of drilling returns.
Where the moats are
All 16 moat-rated companies have a cost advantage, usually low-cost acreage in the best parts of the best basins. Efficient scale appears in six.
- Texas Pacific Land: roughly 870,000 acres of surface and royalty land in West Texas, a perpetual asset that earns royalties and land fees without the cost of drilling.
The narrow-moat group includes ConocoPhillips, EOG Resources, Occidental, Diamondback, EQT, Expand Energy and Permian Resources, producers with deep inventories of low-cost wells. Most producers, including large ones such as Canadian Natural Resources, Woodside and Devon, carry no moat.
What wears moats down
Commodity prices set the industry's fortunes, and even the best acreage runs out. Service costs rise in booms, and policy shifts on drilling, emissions and exports can change the economics of whole regions.
What the quality scores say
Texas Pacific Land scores 76 on MoatScope's quality scale and EOG Resources 65, against an industry average of 34.
What to watch
- Oil and natural gas prices.
- Drilling inventory depth and cost per barrel.
- Capital discipline and shareholder returns across the cycle.
Moat ratings and quality scores on this page update as companies report. Price versus fair value for every company in the industry is in the screener.