Energy
Raymond James Top Energy Stocks to Buy from the Enercom Oil and Gas Conference
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Last week Enercom consulting held its yearly conference in Denver that showcased some of the top oil and gas companies. The energy team at Raymond James got complete updates at the conference from many of the top names they follow. They then did a thorough deep dive through the presentation material and highlighted the top names that they feel are outstanding energy stocks to buy now.
Anadarko Petroleum Corp. (NYSE: APC) continues to be a hot stock at Wall Street firms that we cover. The company is adding rigs in the Permian basin, bringing the program total to eight, and is particularly excited about recent results in the Wolfcamp section of the basin. The company’s biggest asset is in the Wattenberg field, DJ Basin, and there are 4,000 locations remaining in Anadarko’s inventory there. The Raymond James price target for the stock is $105. The Thomson/First Call estimate is at $111. Investors are paid a small 0.8% dividend.
BPZ Resources Inc. (NYSE: BPZ) may be a small cap investor’s dream stock to buy. Its first well drilled in the Corvina field since 2010 was spudded in late July and likely will take about 12 weeks. It will take another week or so to achieve a stabilized flow rate before results are reported to the market, which means it will not expect to hear anything until November. The Raymond James price target for the stock is $4.50, the same as the consensus target.
Cabot Oil & Gas Corp. (NYSE: COG) focuses on the Marcellus Shale in Pennsylvania, with approximately 200,000 net acres in the dry gas window of the play; the Eagle Ford in south Texas, with approximately 60,000 net acres in the oil window of the play; and the Marmaton oil play in Oklahoma, with approximately 70,000 net acres in the play. The company also transports, stores, gathers and produces natural gas for resale. The Raymond James target for this top name is $40, while the consensus target is $42.
Concho Resources Inc. (NYSE: CXO) CEO Tim Leach was enthusiastic about Concho’s recent growth in the Delaware Basin, which grew 37% quarter over quarter. The company also announced it is doubling its rig count in the Northern Delaware basin. The Raymond James price target is posted at $127, and the consensus target is $110.
Denbury Resources Inc.‘s (NYSE: DNR) breakout session at the conference focused on the possibility of the company forming an upstream master limited partnership (MLP) and potential tax consequences revolving around that structure and future drop-downs. The company beat earnings estimates and is firing on all cylinders. Raymond James has a $24 price target, and the consensus target is at $22.50.
Energy XXI (Bermuda) Ltd. (NASDAQ: EXXI) hinted at its presentation that management is looking for opportunities to monetize its ultra-deep and conventional gas exploration assets. Farm-ins would be preferred to asset swaps, since the objective would be to raise capital for exploration and development while keeping capital expenditures (capex) within cash flows and paying dividends. The Raymond James price objective is $35, and the consensus is at $37. Investors do receive a 1.9% dividend.
Oasis Petroleum Inc. (NYSE: OAS) currently has 14 years of drilling in the Bakken shale in North Dakota. Eighty-seven percent of the company’s acreage is held-by-production, with the rest expiring in 2014, 2015 and 2016. The 2013 capex should come in around $1 billion, which is $100 million less than 2012. The Raymond James price for this top name is $52, while the consensus target is $47.
QR Energy L.P. (NYSE: QRE) is an energy total return home run for investors. This MLP after a recent acquisition is now one of the largest producers (2,300 barrels per day) in the historic East Texas oil field. Raymond James has a $19 target, the consensus is at $20. Investors are paid a huge 11.7% distribution. MLP distributions may include return of principal.
Whiting Petroleum Corp. (NYSE: WLL) reviewed recent achievements in the Bakken shale, including a 1,000 barrel per day test in Missouri Breaks driven by the new completion formula it had recently discussed on its second-quarter earnings conference call. The Raymond James price target is at $63, and the consensus target for Whiting is $62.
The Raymond James team is focused on companies that are a part of the resurgence in American oil production. We recently covered a rival analyst upgrade of the hydraulic fracturing or fracking techniques. This growing energy independence is not only good for our economy, it is good from a national security standpoint.
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