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Oil Price Remains Healthy: 3 Permian Explorers to Gain
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The fate of exploration and production companies is primarily dependent on oil price. The lucrative commodity pricing scenario is aiding upstream firms to increase volumes. This is reflected in the fact that companies are adding more rigs in shale resources.
Oil Price Still High
West Texas Intermediate crude price is gradually approaching $80 per barrel, which is highly favorable for exploration and production activities. Also, in its short-term energy outlook, the U.S. Energy Information Administration (“EIA”) projected the average spot price of West Texas Intermediate crude at $77.84 per barrel this year, reflecting an extremely favorable business environment for upstream operations.
Shale Oil Production to Rise
In March, total oil production from shale resources in the United States will likely increase by 75,000 barrels per day to 9,357 thousand barrels per day (MBbl/D), per EIA. The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
Of all the resources, the Permian will witness the highest increase in daily oil production next month, according to the EIA’s drilling productivity report. In the Permian, the EIA projects oil production to rise by 30,000 barrels per day to 5,682 MBbls/D in March.
Permian Explorers in the Spotlight
It is clear that a favorable crude pricing scenario is backing higher production volumes. Improving Permian production amid healthy oil prices has raised the incentive to keep an eye on the stocks of three companies operating in the most prolific basin. All the firms carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks to Gain
Solid oil prices are a boon for Matador Resources Company’s (MTDR - Free Report) upstream operations. This is because MTDR has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Favorable oil price is likely to aid it in increasing production volumes. Last month, Matador agreed to acquire Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. Once the deal closes, MTDR expects the acquisition to be accretive to important valuation and financial metrics.
Pioneer Natural Resources Company has a strong presence in the low-cost oil-rich Midland basin — a sub-basin of the broader Permian. The upstream energy player has a massive inventory of premium wells that will likely generate significant returns for the company.
Pioneer Natural is focused on returning capital to shareholders. This includes a substantial variable dividend along with a strong base dividend. PXD is also employing opportunistic share repurchases to reward shareholders.
Pioneer Natural has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects PXD’s strong balance sheet on which the firm can rely to sail through the volatile energy businesses.
Diamondback Energy, Inc. (FANG - Free Report) is a leading pure-play Permian operator. FANG has expanded its footprint in the Midland basin since it acquired all leasehold interest and associated properties of Lario Permian, LLC – a wholly owned affiliate of Lario Oil & Gas Company. FANG also has an investment-grade balance sheet.
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Oil Price Remains Healthy: 3 Permian Explorers to Gain
The fate of exploration and production companies is primarily dependent on oil price. The lucrative commodity pricing scenario is aiding upstream firms to increase volumes. This is reflected in the fact that companies are adding more rigs in shale resources.
Oil Price Still High
West Texas Intermediate crude price is gradually approaching $80 per barrel, which is highly favorable for exploration and production activities. Also, in its short-term energy outlook, the U.S. Energy Information Administration (“EIA”) projected the average spot price of West Texas Intermediate crude at $77.84 per barrel this year, reflecting an extremely favorable business environment for upstream operations.
Shale Oil Production to Rise
In March, total oil production from shale resources in the United States will likely increase by 75,000 barrels per day to 9,357 thousand barrels per day (MBbl/D), per EIA. The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
Of all the resources, the Permian will witness the highest increase in daily oil production next month, according to the EIA’s drilling productivity report. In the Permian, the EIA projects oil production to rise by 30,000 barrels per day to 5,682 MBbls/D in March.
Permian Explorers in the Spotlight
It is clear that a favorable crude pricing scenario is backing higher production volumes. Improving Permian production amid healthy oil prices has raised the incentive to keep an eye on the stocks of three companies operating in the most prolific basin. All the firms carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks to Gain
Solid oil prices are a boon for Matador Resources Company’s (MTDR - Free Report) upstream operations. This is because MTDR has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Favorable oil price is likely to aid it in increasing production volumes. Last month, Matador agreed to acquire Advance Energy Partners Holdings, LLC, which comprises several oil and natural gas-producing properties and undeveloped acreage. Once the deal closes, MTDR expects the acquisition to be accretive to important valuation and financial metrics.
Pioneer Natural Resources Company has a strong presence in the low-cost oil-rich Midland basin — a sub-basin of the broader Permian. The upstream energy player has a massive inventory of premium wells that will likely generate significant returns for the company.
Pioneer Natural is focused on returning capital to shareholders. This includes a substantial variable dividend along with a strong base dividend. PXD is also employing opportunistic share repurchases to reward shareholders.
Pioneer Natural has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects PXD’s strong balance sheet on which the firm can rely to sail through the volatile energy businesses.
Diamondback Energy, Inc. (FANG - Free Report) is a leading pure-play Permian operator. FANG has expanded its footprint in the Midland basin since it acquired all leasehold interest and associated properties of Lario Permian, LLC – a wholly owned affiliate of Lario Oil & Gas Company. FANG also has an investment-grade balance sheet.