When 2014 began, many analysts were predicting lower oil prices this year, largely due to sluggish global growth and rising production from U.S. shale formations.

So far, however, prices have held their own, with West Texas Intermediate (WTI) crude closing at $100.03 a barrel yesterday, up slightly from its January 2 opening price of $98.50.

A just-released forecast from the Energy Information Administration calls for an average WTI spot price of $95.22 a barrel this year, pulling back to $89.58 in 2015. But even if that prediction comes to pass, EOG Resources (NYSE: EOG), a recommendation of our Energy Strategist advisory, has the tools it needs to keep its profits rising.

The stock has returned 174% for Energy Strategist subscribers since we added it to the advisory’s Growth Portfolio on May 21, 2009, topping the S&P 500, which rose 111% over the same period.

How EOG Became a Shale Oil Leader

EOG was created in 1999 when its parent firm, Enron, spun off its Enron Oil & Gas operation as a master limited partnership two years before collapsing under a cloud of scandal.

The company was given its current moniker, and Mark G. Papa, the company’s current chief executive, became chairman and CEO. Unlike its parent, EOG has been a model of corporate governance and was listed among Fortune magazine’s “100 Best Companies to Work For” from 2007 through 2013.

EOG is firmly rooted in the shale formations that are at the heart of America’s drive toward energy independence.

According to the International Energy Administration, surging shale production will make the U.S. the world’s top oil producer by 2015. By 2020, the country will produce 11.6 million barrels a day, up from 9.2 million in 2012. In the same period, Saudi Arabia’s output is expected to slip to 10.6 million barrels from 11.7 million.

The trigger has been advances in drilling technology, including horizontal drilling and hydraulic fracturing, usually referred to as fracking, which involves pumping water, sand and chemicals underground to crack open shale rock and release the oil and gas. EOG was one of the first companies to combine horizontal drilling and fracking.

“EOG has the reputation for being the best and most efficient primary shale producer in the U.S., producing shale oil for the most profits with the best profit margins,” our research team wrote in a February 7 Spotlight article on the company. “EOG is also the largest U.S. horizontal crude oil producer by a two-to-one ratio.”

The company discovered the Eagle Ford shale, which covers 12.8 million acres in Texas, and was one of the first into the Bakken shale, a 200,000-square-mile rock formation that lies below Montana, North Dakota and the Canadian province of Saskatchewan.

The Bakken (including the underlying Three Forks formation) contains over 7.4 billion barrels of undiscovered, technically recoverable oil, according to an April 2013 estimate from the U.S. Geological Survey—more than double the previous assessment. The Eagle Ford could be home to another 7 billion to 10 billion barrels.

Thanks to its early-mover advantage, EOG has grabbed the largest slice of the Eagle Ford and currently holds 639,000 acres there. It’s also one of the biggest players in the Bakken, with 90,000 acres in the region’s core area. Its other shale properties include holdings in the Barnett Combo and the Wolfcamp and Leonard plays in the Permian Basin.

Cutting Back on Natural Gas

EOG ended 2013 with 1.28 billion barrels of net proved crude oil, condensate and natural gas liquid (NGL) reserves, while estimated net proved natural gas reserves stood at 5.04 trillion cubic feet. EOG has a total reserve of about 2.1 billion barrels of oil equivalent, with about 94% of that in the U.S.

The company continues to post impressive production figures:

In the fourth quarter, its total crude oil and condensate production increased 50% from a year ago, driven by 53% growth in the U.S. Total liquids output—crude oil, condensate and natural gas liquids (NGLs)—rose 41%.

The higher output helped EOG report a profit of $580 million, or $2.12 a share, compared to a loss of $505 million, or $1.88 a share, a year ago. On an adjusted basis, the company earned $2.00 a share, up from $1.61 in Q4 2012 and ahead of the consensus forecast of $1.94. Revenue surged 24% to $3.75 billion, also topping the Street’s estimate of $3.63 billion.

The company also announced a two-for-one stock split in late March, as well as a 33% hike in its quarterly dividend, to $0.25 a share (or $0.125 post-split), for a 0.54% yield.

EOG was one of the first exploration and production firms to begin the shift toward oil and NGLs—such as ethane, propane and butane—and away from gas in response to lower gas prices. Natural gas has gained ground as consumers cranked up the heat to cope with the brutally cold winter, but that hasn’t prompted EOG to change course.

“Although natural gas prices have recently increased due to cold winter weather in North America, EOG’s extensive portfolio of crude oil and liquids-rich resources offer far superior returns compared to alternative natural gas drilling investments,” the company said in its fourth quarter earnings report. “EOG does not plan to allocate capital to North American dry gas drilling in 2014.”

Accordingly, the company saw its gas output decline 11% in 2013. It expects a further 6% drop this year.

Higher Production Ahead

This year, EOG is planning for $8.1 billion to $8.3 billion on capital expenditures, with a larger proportion of those funds going to its Bakken and Eagle Ford properties.

Otherwise, the beat goes on for EOG: the company is forecasting a 27% year-over-year increase in crude oil output in 2014, mainly due to a 29% rise in the U.S. Total company production is expected to climb 11.5% in 2014, compared to a 9% increase last year.

Analysts also feel the company’s earnings are primed for continued growth, with the average estimate calling for adjusted profits of $9.48 in 2014—up from $8.22 in 2013—rising to $10.61 next year. The stock trades at 19.6 times the 2014 forecast.

EOG is one of our favorite oil stocks, but it’s just one of 23 power-packed recommendations you’ll discover in our Energy Strategist Growth Portfolio. Some of these winners have skyrocketed 37.6% in 5 months … 47.0% in 11 months … 20.3% in 5 months … the list goes on.

You get the names of all 23 of these companies, plus full access to all 3 of our portfolios—packed with our top recommendations for every investing goal—when you take a no-risk trial to the Energy Strategist today. Don’t miss out. Click here to sign up now.

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