While the long slide in oil pricing may have finally settled into what could be a longtime sideways move, some firms we cover on Wall Street are getting incrementally more positive on some of the top exploration and production (E&P) companies. A new report from SunTrust Robinson Humphrey raises price targets on some of the leading stocks to buy that are focusing on the Eagle Ford formation in South Texas.

The SunTrust team points out that even with prices declining, the best companies have reached what they call “shale scale” with very efficient operations that are providing highly economic returns, some in excess of 30%. The firm is raising price targets on three of the four top stocks to buy. Carrizo Oil & Gas Inc. (NASDAQ: CRZO), Earthstone Energy Inc. (NASDAQ: ESTE), Penn Virginia Corp. (NYSE: PVA) and Sanchez Energy Corp. (NYSE: SN). All are rated Buy at SunTrust.

Carrizo Oil & Gas

This Houston-based energy company is actively engaged in the exploration, development and production of oil and gas from resource plays located in the United States. Carrizo’s current operations are principally focused in proven, producing oil and gas plays primarily in the Eagle Ford Shale, the Utica Shale in Ohio, the Niobrara Formation in Colorado and the Marcellus Shale in Pennsylvania.

The SunTrust team sees the company as one of the best positioned due to the low break-even costs, solid operating scale and a very good balance sheet with ample liquidity. The analysts also think they company may take advantage of difficult situations for others and make acquisitions, especially in the Eagle Ford.

SunTrust raised its price target on the stock from $60 to $65. The Thomson/First Call consensus target is posted at $56.75. Shares closed Friday at $53.73.

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Earthstone Energy

This independent oil and gas E&P company is engaged in the development and acquisition of oil and gas reserves through an active and diversified program that includes the acquisition, drilling and development of undeveloped leases, and purchases of reserves and exploration activities, with its current primary assets located in the Eagle Ford trend and in the Williston Basin of North Dakota and Montana.

This is another company the analysts feel could be looking to grow via acquisitions. They also point out the company has a very strong balance sheet, with over $100 million in cash, and another $80 million available.

The SunTrust price target stays at $35, and the consensus target is $30.89. The stock closed on Friday at $24.85 a share.

Penn Virginia

This is a small-cap stock that could hold big promise, especially for more speculative accounts looking to add a higher amount of shares. Penn Virginia is an independent oil and gas company engaged in the exploration, development and production of oil, natural gas liquids and natural gas in various domestic onshore regions of the United States, with a primary focus in the Eagle Ford Shale.

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With virtually no corporate chatter from the company during the first quarter, the analysts are anxious to hear the company’s strategic commentary for the future. While they like the Eagle Ford acreage, with large operators nearby the well economics may not be as favorable. Penn Virginia could be a company others look at as an acquisition possibility.

The SunTrust price target is raised to $11 from $10. The consensus target is $9.14. Shares closed trading Friday at $7.46.

Sanchez Energy

This one is an independent E&P company focused on the acquisition and development of unconventional resources in the onshore U.S. Gulf Coast with a current focus on the Eagle Ford Shale, where it has assembled approximately 226,000 net acres, and the Tuscaloosa Marine Shale.

Sanchez is another company that the analysts are very bullish on, and they cite similar very impressive traits as with Carrizo. Again, they are very low break-even costs, good operating scales and a very solid and stable balance sheet with outstanding liquidity. The SunTrust team also is expecting very positive well results from Sanchez’s Catarina area.

The SunTrust price target is lifted to $22 from $20. The consensus is much lower at $16.63. The stock finished the day Friday at $14.80.

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All these companies appear to really have hunkered down and avoided getting engulfed in the oil price decline. With solid balance sheets and very good forward prospects, they make sense for aggressive growth accounts looking to add independent E&P companies. Any of these four could be on the radar screen of a bigger company looking to add production.

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