3 Lagging Oil Stocks That Could Have a Major Upside If Oil Breaks $90
On Thursday, the price of oil slipped from multi-year highs, with Brent Crude futures down 0.5% to $87.99 a barrel, while West Crude futures U.S. Texas Intermediate (WTI) for February delivery was down 0.5% at $86.50 a barrel. However, OPEC+ supply shortages amid strong demand are supporting oil prices at hovering near 2014 highs.
Moreover, recent outlooks from the International Energy Agency and the United States Energy Information Administration suggest that the the world may need more oil this year than a month ago. The demand figures appear robust as the impact of the omicron variant on consumption was lower than many had initially feared.
Additionally, Goldman Sachs Group Inc. (GS) predicts oil prices to hit $100 a barrel later this year and further price increases in 2023. Vista Oil & Gas Oil Stocks, SAB de CV (VISIT), SilverBow Resources, Inc. (SBOW) and VAALCO Energy, Inc. (EGY) could experience significant short-term increases if oil prices continue to recover.
Vista Oil & Gas, CV SAB (VISIT)
Mexico-based VIST engages in oil and gas exploration and production in Latin America. The company has production assets in Argentina and Mexico, and its principal assets are located in Vaca Muerta, Argentina.
VIST’s revenue from customer contracts increased 150.5% year-over-year to $175 million for the third fiscal quarter ended Sept. 30. Net income for the period and earnings per share were $4.73 million and $0.05, respectively, up substantially from their negative results. values from a year ago.
The street PES the estimate for the fourth fiscal quarter of $0.16 indicates a 150% year-over-year increase. Similarly, Street’s revenue estimate of $159.50 million for the same period reflects a 100.5% improvement over the prior year period.
The stock has gained 117.6% over the past year and 82.8% over the past six months to close yesterday’s trading session at $6.18. His average price target of $11.58 indicates an upside potential of 87.4%.
VIST’s strong fundamentals are reflected in its POWR Rankings. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
VIST has a Momentum Rating of A and a Growth, Value and Sentiment of B. In the 48 stocks Foreign oil and gas industry, it is ranked #15. The industry is rated A. Click here to see additional POWR ratings for VIST (stability and quality).
SilverBow Resources, Inc. (SBOW)
SBOW is an oil and natural gas exploration and production company primarily focused on the Eagle Ford Shale developments in South Texas.
On November 22, SBOW declared the closing of its acquisition of oil and gas assets in the Eagle Ford shale, from anonymous sellers, at an aggregate purchase price of $75 million, payable in cash and stock. ordinary. The acquisition is expected to improve the company’s production capacity.
On November 15, the company announced its entry into an amendment to its revolving credit facility, increasing its borrowing base from $300 million to $460 million and an amendment to its subordinated note purchase agreement. , extending its maturity date to December 2026. The company expects these changes to increase its liquidity and enable it to complete strategic mergers and acquisitions.
For the fiscal third quarter ended Sept. 30, SBOW’s oil and gas sales revenue increased 117.2% year-over-year to $99.25 million. Operating profit improved 359.6% from the prior year quarter to $59.64 million. Adjusted EBITDA increased by 60.1% over the same period the previous year to reach $57.63 million.
The consensus estimate for fiscal fourth quarter EPS of $3.24 reflects a 145.5% year-over-year increase. Similarly, the consensus revenue estimate of $115 million for the current quarter indicates a 115.1% increase over the same period last year.
SBOW stock has gained 271.2% over the past year to close yesterday’s trading session at $22.42. It has gained 19.1% over the past six months. The 12-month median price target of $39.00 indicates a 74% upside potential.
SBOW’s POWR ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our POWR rating system.
SBOW has an A rating for growth and momentum and a B rating for value, sentiment and quality. It is ranked #2 out of 77 stocks in the Energy – Oil & Gas industry. The industry is rated B. To see the additional SBOW POWR rating for stability, Click here.
VAALCO Energy, Inc. (EGY)
EGY operates as an independent energy company and an explorer, developer and producer of crude oil and natural gas. The company holds the Etame production sharing contract on the Etame Marin block in the Gabonese Republic and holds interests in the undeveloped offshore block in Equatorial Guinea.
On December 29, EGY announced the filing of a $150 million shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (SEC). Commenting on the statement, George Maxwell, Chairman and Chief Executive Officer of EGY, said, “We believe this pending registration statement, which is standard practice with other publicly traded U.S. E&P companies, is a prudent proactive measure to support our future growth objectives as the filing will provide us with increased financial flexibility and more efficient access to capital markets.
On December 13, EGY declared the start of its 2021/2022 drilling campaign with the Etame 8H-ST well offshore Gabon under a previously announced contract. The execution of a successful drilling campaign is expected to expand the size and scale of the business and accelerate growth initiatives.
EGY’s crude oil and natural gas sales increased 206.2% year-over-year to $55.90 million in the third fiscal quarter ended Sept. 30. % compared to the quarter of the previous year. Adjusted EBITDAX increased 232.6% over the same period last year to $23.26 million.
Street expects EPS to grow 152.9% year-over-year to $0.43 for the quarter ending March 2022. Similarly, Street expects revenue from ‘EGY increase 62.7% from the prior year quarter to $64.70 million in the next quarter.
Over the past year, the stock has gained 73.3% to close yesterday’s trading session at $4.16. It has gained 76.3% over the past six months. The 12-month median price target of $4.98 indicates a Upside potential of 19.7%.
EGY has an overall A rating, which is equivalent to Strong Buy in our proprietary rating system. The stock has a Momentum and Sentiment rating of A and a Growth, Value and Quality rating of B. It is ranked #1 in the energy industry – oil and gas.
In addition to the POWR ratings that we have indicated above, we can see the EGY rating for stability here.
VIST shares remained unchanged in after-hours trading on Thursday. Year-to-date, the VIST has gained 10.13%, compared to a -5.94% rise in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. Following…