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On Monday August 5, it was reported by Bloomberg, that "U.S.-based oil explorers such as EOG Resources (NYSE:EOG) and Continental Resources (NYSE:CLR) have focused most of their capital on high-margin shale drilling and are poised to reap bigger returns for investors than some of the global energy giants such as Exxon (NYSE:XOM) and Shell (NYSE:RDS.A)". In the wake of the recent analysis that was conducted by Bloomberg, I wanted to highlight a number of the reasons why I'm long when it comes to both EOG and Continental.

#1 EOG Resources - On Monday shares of EOG, which currently possess a market cap of $41.53 billion, a forward P/E ratio of 19.06, and a forward yield of 0.49% ($0.75), settled at $154.18. Based on Monday's closing price, shares of EOG are trading 5.75% above their 20-day simple moving average, 12.06% above their 50-day simple moving average, and 21.71% above their 200-day simple moving average. These numbers indicate a short-term, mid-term and long-term uptrend which translates into a buying mode for most traders.

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What stands out the most for me when it comes to EOG? To put things as simply as I can, the company's recent performance within the Eagle Ford happens to not only be quite impressive, but possesses some very nice long-term potential. For example, on June 28th it was noted by EOG that, "Its Eagle Ford operations have captured the biggest US crude oil discovery net to one company in the past 40 years".

Although the company's stellar performance within the Eagle Ford is one of the primary catalysts behind my decision to stay long on EOG, the company's overall production has also played a deciding factor in my decision to add additional shares to my portfolio.

According to company's website, "EOG's total company production in 2012 was 170.7 MMBoe, which was driven by a 39 percent increase in crude oil and condensate production, and a 37 percent increase in total liquids production".

By considering the company's recent performance within the Eagle Ford as well as its annual oil production growth of 28%, not to mention its increased margins per barrel (which currently stand at around $39), EOG fortifies its case as a very sustainable long-term growth play.

#2 Continental Resources - Shares of CLR, which currently possess a market cap of $17.94 billion, and a forward P/E ratio of 13.96, settled the trading day on August 5 at $97.51/share. Based on Monday's closing price, shares of CLR are trading 4.69% above their 20-day simple moving average, 10.18% above their 50-day simple moving average, and 19.17% above their 200-day simple moving average. These numbers indicate a short-term, mid-term and long-term uptrend which translates into a buying mode for most traders.

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What do I like most when it comes to Continental Resources? There are a number of things I happen to like when it comes to the company that dubs itself, "America's Oil Champion". When I think of a champion in the independent oil & gas sector, I think of a company that demonstrates solid production growth as well as sustainable earnings performance. When it comes to the company's solid production growth, CLR demonstrated a 54% year-over-year gain in proven reserves when it reported a total of 785 MMBoe produced during 2012. When it comes to the company's sustainable earnings, Continental demonstrated a 37% increase in EBITDAX as well as a 44% increase in oil production.

There are a number of milestones that should be considered when looking to establish a position in Continental Resources. Continental was not only the first company to complete a horizontal well in the Three Forks zone in 2008 and the pairing of a Middle Bakken and Three Forks well in 2010, but the company has gone on to become the largest acreage holder in the Bakken with 1.14 million acres as of December 31, 2012 which is pretty impressive if you ask me.

Upcoming Earnings Estimates

On Wednesday August 7, both EOG Resources and Continental Resources are expected to announce their quarterly EPS results. On one hand, analysts are expecting EOG to earn $1.73/share in net income on revenue of $3.54 billion, which I estimate will be conservatively beaten by $0.03 - $0.06/share in terms of net income and anywhere from $0.35-to-$0.65 billion in terms of revenue.

On the other hand, analysts are expecting Continental to earn $1.25/share in net income on revenue of $853.42 million, which I estimate will be conservatively beaten by $0.04 - $0.08/share in terms of net income and anywhere from $15-$35 million in terms of revenue. Although my estimates for both companies are fairly positive, all eyes are going to be on how well each company can demonstrate, and subsequently sustain, a consistent uptrend in terms of overall production.

Source: EOG And Continental: Why I'm Long These 2 Independent Oil And Gas Plays