Until the advent of the fracking revolution, the glory days of the Permian Basin in West Texas were thought to be long over. Oil and gas companies had gone out of business, and the heady years of the 1950s and 1960s seemed like a distant memory. The oil and gas analysts at Wunderlich Securities like the Permian for the variety of stacked pays offered, as well as the fact that producers are just starting to understand the full potential of resource plays in this region. Currently more than 444 rigs are active in the region. Wunderlich has researched the companies that are active in the Permian and have come up with a list of top stocks to buy.

Approach Resources Inc. (NASDAQ: AREX) raised $250 million by issuing 7% senior notes in June 2013, giving it $315 million of availability on its credit facility and $91.5 million of cash. In addition, the company is bringing on more high-caliber operational experts from other well-established Permian producers. The Wunderlich price target for the stock is $45. The Thomson/First Call estimate is at $34.50. The Wunderlich target is among the highest on Wall Street and would represent a 68% gain for investors from current trading levels.

Clayton Williams Energy Inc. (NASDAQ: CWEI) has 170,000 net acres in the Permian Basin, adjusting for the sale of Wolfberry assets in Andrews County. About 21,000 net acres are conventional fields ideal for enhanced recovery; roughly 85,000 net acres are located in the Southern Delaware Basin targeting the Wolfbone Play with one rig running, and the company has the right-to-earn an incremental 15,000 net acres under a farm-out agreement. The Wunderlich price target for the stock is a staggering $83, while consensus is at $50.50. The Wunderlich target is the highest on Wall Street and would represent an 81% gain from current trading levels.

Energen Corp. (NYSE: EGN) has been active in the region since the late 1990s and did seven major acquisitions between 2009 and 2012. The company’s land base is surrounded by successful tests, and by drilling its own wells and proving up its acreage, the Wunderlich analysts believe Energen will finally get the credit it deserves. Their price target for the stock stands at $65 and the consensus number is at $61. Investors are paid a small 1% dividend.

Diamondback Energy Inc. (NASDAQ: FANG) is a up and coming small cap in the Permian and relatively new to the public markets. Diamondback has been one of the front-runners of horizontal Permian development in the Wolfcamp and now has 10 strong well results to prove its operational and asset strength. The Wunderlich price target is $42, and the consensus target is at $40.

Resolute Energy Corp. (NYSE: REN) is a top small cap name that may be a huge winner for investors. Resolute recently established its first of three horizontal Permian wells during 2013 targeting the Wolfcamp B formation. These wells will be near multiple successful Diamondback Energy and privately held RSP wells, so prospects look strong as the company looks to begin horizontal operations on its 20,000 net Permian acres. Wunderlich has a $13 target while the consensus is at $11. A move to the target would be a 58% gain for investors.

Whiting Petroleum Corp. (NYSE: WLL) has nearly 70,000 net acres in the Delaware Basin and has drilled multiple vertical and horizontal wells with some success in the area, but after its initial program decided to wait and watch the wells before dedicating more capital to the region. The Wunderlich price target for the stock is at $58, but the consensus target is higher at $60.

Technology like fracking has revolutionized drilling in the United States and is pushing the country towards energy independence. Independence can help to spur economic growth and add jobs. We have written about this coming American energy independence recently. The Permian Basin stocks to buy may offer investors not only financial gain, but a degree of satisfaction in owning stocks that are helping to lead the way to our energy independence.

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