Energy Business

Why Chevron Could Be Eyeing These 4 Companies After Losing Anadarko Bid

It offers investors a unique combination of investment themes, including valuation, rate-of-change and resource expansion themes. The company is the largest acreage holder of the publicly traded Permian large-caps and provides investors peer-leading exposure to three of the most impactful catalysts across the Delaware Basin, including the Wolfcamp XY, Wolfcamp D and Bone Spring Shale.

Concho Resources has reported strong earnings but still has a lot of upside to the posted price targets.

Concho Resources investors are paid just a 0.47% dividend. Stifel has a price target set at a gigantic $254, while the posted consensus target was last seen at $155.58. The stock was trading at $106.20 a share when Tuesday’s trading came to a close.

Parsley Energy

This is a smaller capitalization stock for aggressive investors to consider. Parsley Energy Inc. (NYSE: PE) is an oil and gas producer with 227,000 net acres in the Permian Basin. The majority of its acreage sits on the Midland side of the basin, but the company also holds a small acreage position in the Delaware Basin. Through strategic acquisitions and acreage swaps, it has grown its acreage position since its initial public offering and has over 7,900 horizontal locations across multiple prospective zones.

The company is a catalyst rich and is Permian Basin pure play, which could appeal to Chevron. Parsley Energy has some of the strongest wells in the basin, generating returns that are among the best in the industry. It also is rapidly de-risking its drilling inventory and is well-positioned to continue to beat its strong growth projections.

The $39 price target at Stifel compares with a $27.70 consensus target price. The stock closed trading most recently at $19.55.

Pioneer Natural Resources

Many Wall Street analysts love this stock for a pure crude oil play. Pioneer Natural Resources Co. (NYSE: PXD) operates a modern fleet of more than 24 top performing drilling rigs throughout onshore oil and gas producing regions of the United States and Colombia. Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.

Pioneer is a huge player in the Permian Basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian as it expects to deliver solid production growth in 2019 and beyond.

Investors are paid a tiny 0.38% dividend. The Stifel price target is a staggering $320. The consensus price figure is way below that level, at $201.99, and Pioneer shares were last seen trading at $147.97 apiece.

Again, there are no guarantees that Chevron, or anybody else, buys any of these companies now or in the future. However, for investors looking for quality energy stocks with Permian and Denver-Julesburg Basin exposure, these stocks are among the best individual ideas. And while oil has backed down in price recently, the busy summer driving season is right around the corner.

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