Energy Business

4 Top Eagle Ford Shale Stocks to Buy With Huge Potential Upside

Earthstone Energy

Earthstone Energy Inc. (NYSEMKT: ESTE) is an independent oil and gas exploration and production company 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 for the stock drops to $30 from $35, and the consensus target is $29.91. The stock closed on Wednesday at $19.20.

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Penn Virginia

This is a small-cap stock that could hold big promise, especially for more speculative accounts looking to add a higher number of shares. Penn Virginia Corp. (NYSE: PVA) 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.

With virtually no corporate chatter from the company this year, the analysts are anxious to hear the company’s strategic commentary for the future. While the analysts 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. In fact, the stock recently got hit on rumors that the company turned down an offer from BP, which both sides denied.

The SunTrust price target is $10. The consensus is set at $7.67. Shares closed trading Wednesday at $4.05.

Sanchez Energy

This stock is a favorite of top hedge fund manager Kyle Bass. Sanchez Energy Corp. (NYSE: SN) is an independent exploration and production 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.

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

The SunTrust price target is dropped to $20 from $22, but the consensus target is much lower at $16.50. The stock finished the day Wednesday at $9.33.

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All these companies appear to really have hunkered down and avoided getting totally 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 exploration and production companies. Any of these four could be on the radar screen of a bigger company looking to add production.