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Tap the Crude Rally With These 4 Permian Explorers
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U.S. President Joe Biden said that America expects to vaccinate all adults by May-end. This has raised hopes that the country will soon get back to normal, aiding fuel demand since people will travel more and start going to office. Thus, it can be safely said that the momentum in crude rally will continue, brightening prospects for explorers and producers.
Oil Trades at Pre-Pandemic Mark
The price of West Texas Intermediate crude, which is trading above $61 per barrel (almost at pre-pandemic levels), has improved significantly from the negative territory touched in April 2020. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.
Reportedly, OPEC+ (OPEC and its non-OPEC partners) is not considering an increase in output in today’s meeting, when they will decide on policies regarding production beyond March. Rather, the cartel and its non-OPEC allies led by Russia will probably rollover production cut into April from March. The news is also aiding the rally in crude price.
Explorers Returning to Shale Plays
With the pricing scenario of crude improving at a rapid pace, explorers and producers are gradually returning to oil resources, thereby adding rigs to the prolific shale plays.
In its weekly release, Baker Hughes Company (BKR) reported that Permian — the most prolific basin in the United States — recorded an oil rig tally of 207 for the week through Feb 26 versus the prior-week count of 203. Notably, in seven of the past 10 weeks, Permian basin witnessed an addition of oil rigs.
Thus, it is highly expected that the prolific shale plays in the United States will continue to witness the addition of oil drilling rigs since crude price has recovered to the pre-pandemic mark.
Stocks to Buy
Given that Permian has a huge inventory of low-cost premium wells and the business scenario is favorable, it seems to be an opportune moment for energy investors to consider stocks of explorers operating in the basin. Here, we present two Zacks Rank #1 (Strong Buy) stocks that are well positioned to gain. There are two other stocks with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pioneer Natural Resources Company (PXD - Free Report) , headquartered in Irving, TX, recently announced approval from its board of directors to raise its quarterly cash dividend payout. Importantly, in 2020, the Zacks #2 Ranked company delivered free cashflow of $689 million and the metric will likely improve with the business scenario gradually getting better on rising oil prices. Notably, Pioneer projects free cashflow for 2021 at $2 billion. Thus, the upstream energy company, with a strong presence in the Permian, will likely continue to reward investors with dividend payments.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has a strong footprint in liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The Zacks Rank #1 stock is likely to see earnings growth of 223.2% in 2021.
EOG Resources, Inc. (EOG - Free Report) , headquartered in Houston, TX, has premium drilling locations in all the prolific shale plays in the United States that include Delaware basin, a sub-basin of the broader Permian. The company, with a Zacks Rank of 2, is likely to see earnings growth of 199.3% in 2021.
Headquartered in Midland, TX, Diamondback Energy, Inc. (FANG - Free Report) is a pure-play Permian player with presence in more than 347,000 net acres in the Permian. The company has more than 12,300 gross horizontal locations, brightening its production outlook. Notably, the Zacks #1 Ranked stock is likely to see earnings growth of 91.8% in 2021.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Tap the Crude Rally With These 4 Permian Explorers
U.S. President Joe Biden said that America expects to vaccinate all adults by May-end. This has raised hopes that the country will soon get back to normal, aiding fuel demand since people will travel more and start going to office. Thus, it can be safely said that the momentum in crude rally will continue, brightening prospects for explorers and producers.
Oil Trades at Pre-Pandemic Mark
The price of West Texas Intermediate crude, which is trading above $61 per barrel (almost at pre-pandemic levels), has improved significantly from the negative territory touched in April 2020. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.
Reportedly, OPEC+ (OPEC and its non-OPEC partners) is not considering an increase in output in today’s meeting, when they will decide on policies regarding production beyond March. Rather, the cartel and its non-OPEC allies led by Russia will probably rollover production cut into April from March. The news is also aiding the rally in crude price.
Explorers Returning to Shale Plays
With the pricing scenario of crude improving at a rapid pace, explorers and producers are gradually returning to oil resources, thereby adding rigs to the prolific shale plays.
In its weekly release, Baker Hughes Company (BKR) reported that Permian — the most prolific basin in the United States — recorded an oil rig tally of 207 for the week through Feb 26 versus the prior-week count of 203. Notably, in seven of the past 10 weeks, Permian basin witnessed an addition of oil rigs.
Thus, it is highly expected that the prolific shale plays in the United States will continue to witness the addition of oil drilling rigs since crude price has recovered to the pre-pandemic mark.
Stocks to Buy
Given that Permian has a huge inventory of low-cost premium wells and the business scenario is favorable, it seems to be an opportune moment for energy investors to consider stocks of explorers operating in the basin. Here, we present two Zacks Rank #1 (Strong Buy) stocks that are well positioned to gain. There are two other stocks with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pioneer Natural Resources Company (PXD - Free Report) , headquartered in Irving, TX, recently announced approval from its board of directors to raise its quarterly cash dividend payout. Importantly, in 2020, the Zacks #2 Ranked company delivered free cashflow of $689 million and the metric will likely improve with the business scenario gradually getting better on rising oil prices. Notably, Pioneer projects free cashflow for 2021 at $2 billion. Thus, the upstream energy company, with a strong presence in the Permian, will likely continue to reward investors with dividend payments.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has a strong footprint in liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The Zacks Rank #1 stock is likely to see earnings growth of 223.2% in 2021.
EOG Resources, Inc. (EOG - Free Report) , headquartered in Houston, TX, has premium drilling locations in all the prolific shale plays in the United States that include Delaware basin, a sub-basin of the broader Permian. The company, with a Zacks Rank of 2, is likely to see earnings growth of 199.3% in 2021.
Headquartered in Midland, TX, Diamondback Energy, Inc. (FANG - Free Report) is a pure-play Permian player with presence in more than 347,000 net acres in the Permian. The company has more than 12,300 gross horizontal locations, brightening its production outlook. Notably, the Zacks #1 Ranked stock is likely to see earnings growth of 91.8% in 2021.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>