Energy Business

Stifel Calls a Bottom in These 5 Oil Stocks

EOG Resources

EOG is the top producer in the Eagle Ford Shale and it has solid positions in both the Bakken and Permian Basin, making it a perfect fit for an integrated looking to expand in those areas, should a purchase or merger make sense. In fact, industry chatter online and off picked up in late February that Norway’s Statoil was targeting EOG in a merger or acquisition that could exceed $50 billion.

As of the end of last year, the company reported it had total estimated net proved reserves of 2,497 million barrels of oil equivalent, including 1,140 million barrels (MMBbl) crude oil and condensate reserves, 467 MMBbl natural gas liquid reserves and 5,343 billion cubic feet of natural gas reserves.

EOG investors are paid a small 0.8% dividend. The Stifel price target $110, and the consensus target is $100.34. Shares closed on Wednesday at $90.66, up over 4%.

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Noble Energy

Noble is a top stock to buy that has the majority of its production in the form of natural gas, and that certainly helps to hedge against falling oil prices, especially when we have brutal winters and very hot summers. Noble is also one of the many American firms expected to benefit when Mexico opens the door for exploration and production from outside companies for the first time in 70 years.

The company is also expected to declare its Aphrodite natural gas reserve off Cyprus commercially viable within weeks. Cyprus discovered offshore gas in 2011 and is seeking to develop the energy sector to bolster an economy that relies mostly on tourism, business services and shipping.

Noble investors are paid a 1.6% dividend. The Stifel price target is $65, and the consensus figure is $55.23. Shares closed trading Wednesday at $48.12.

Whiting Petroleum

Whiting Petroleum is North Dakota’s largest oil producer. It has recently put Texas acreage and pipeline assets up for sale. That new strategy may be an effort to appease some investors outraged by the possibility of any outright sale. Wall Street analysts feel that the company could dispose of assets that are not key to the core shale operations and generate cash for the company’s balance sheet. Whiting is burdened by more than $3 billion in debt after December’s buyout of smaller rival Kodiak Oil & Gas.

The Stifel price target is set at $45, and the consensus target is $45.97. The stock closed Wednesday at $40.95 a share.

ALSO READ: 8 Oil and Gas Stocks Analysts Want You to Buy

While is does take some courage to buy these top oils stocks now, another investor attribute that will be needed is patience. Even if the market does bottom soon, it will take time for the oil and gas sector to regain some health. Investors buying here should probably be thinking about a longer-term view of 12 months to 18 months, and many investors should consider legging in gradually rather than piling in all at once. Some analysts and speculators try to call a bottom in many trends. Jumping in all at once is a dangerous game — akin to catching falling knives.