With a market cap of $61 billion, ConocoPhillips ranks as the largest independent U.S. crude oil producer. It announced preliminary 2017 proved reserves of 5.038 billion barrels of oil equivalent after asset sales of 1.904 billion barrels of oil equivalents during the year. Reserves are widely scattered in Alaska, the lower 48 states, Canada, the Asia Pacific Middle East region focused on liquefied natural gas, and in the North Sea and Libya.

With a market cap of $13.5 billion, National Oilwell Varco is a leading manufacturer of drilling equipment sold primarily to drilling contractors, marine rig shipyards in Korea and Singapore, and other rig fabricators from plants largely located in Texas. Its revenue is heavily dependent on oil and gas producer and drilling contractor capital spending and the outlook for drilling activity; both of which are sensitive to changes in the price of oil.

With a market cap of $13.5 billion, National Oilwell Varco (NOV) is a leading manufacturer of drilling equipment sold primarily to drilling contractors, marine rig shipyards in Korea and Singapore, and other rig fabricators from plants largely located in Texas. Its revenue is heavily dependent on oil and gas producer and drilling contractor capital spending and the outlook for drilling activity; both of which are sensitive to changes in the price of oil.

Halliburton is the second largest oil service company in the world with a market cap of $46.53 billion. More importantly, Halliburton is the leader in hydraulic fracturing, the largest oil field service market, with its revenue skewed to the United States.

OPEC production cuts and price stability above the $45 per barrel level are keys to a balance in crude oil pricing in 2018.

Too much, too soon. The 36% increase in crude oil prices since August is likely to stimulate a strong production response, with a typical lag, sufficient to keep oil inventories elevated above the five-year average for all of 2018, despite the extension of OPEC’s production cut to the end of the year. It may even undermine OPEC compliance and negatively impact oil demand.

With a market cap of $2.6 billion, Ensco (ESV) is a leading marine driller with a fleet of 63 rigs, which includes 12 ultra-deepwater drillships. Ensco’s stock price is near its cyclical low. It has a 12-month upside target of $7 per share (+12%) assuming its seven-year average 6.3x cash flow multiple on depressed 2018 estimated cash flow of $1.07 per share.