Centennial Resource Development
This off-the-radar company could have solid upside potential. Centennial Resource Development Inc. (NASDAQ: CDEV) is a pure play Permian oil and gas producer. The company holds 88,000 net acres across the Delaware Basin, with its largest position in Reeves and Pecos, Texas, (76,100 net acres) and recently acquired position in Lea County, New Mexico, (11,900 net acres), Centennial’s legacy position, which was held since the time of its IPO late 2016 and covers 42,5000 net acres in Reeves, Pecos and Ward counties.
The company’s third-quarter results were solid but essentially in line with expectations. Positive well results, continued efficiency gains and borrowing base reaffirmed, the company does not hedge its production, so if oil spikes higher, this stock could be a huge winner.
The $6 Stifel price objective compares with the $6.62 consensus target. The stock ended the week at $3.56 per share.
Investors looking for a micro-cap energy play will love this company. HighPoint Resources Corp. (NYSE: HPR) is an independent oil and gas company engaged in the exploration, development and production of oil, natural gas and natural gas liquids. The company primarily holds interests in the Denver Julesburg Basin in Colorado’s eastern plains and parts of southeastern Wyoming.
HighPoint maintains a conservative approach to proved reserve bookings and only included approximately 220 gross proved undeveloped (PUD) locations at year-end 2018, of which approximately 60 gross PUD locations represent wells that are in various stages of drilling and completion activity. This amounts to approximately 1.5 years of future development activity at the current planned development pace.
The analysts at Stifel have a massive $7 price target. The consensus target was last seen at $3.54, and shares were trading at $1.32 apiece on Friday’s close.
This energy stock has had a nice run off the lows but still holds huge upside potential. QEP Resources Inc. (NYSE: QEP) is a holding company engaged in the exploration and production of oil and natural gas properties. It focuses on the northern region (primarily in North Dakota, Wyoming and Utah) and the southern region (primarily in Texas and Louisiana).
Aethon Energy Management announced earlier this year the completion of its acquisition of natural gas assets from wholly owned subsidiaries of QEP Resources. The assets are located in the Haynesville basin in northwest Louisiana.
Shareholders receive a 2.23% dividend. Stifel has a massive $12 price objective. The posted consensus target is $6.47, and the shares closed trading at $3.71.
These five solid energy picks trading under $10 from the Stifel team were all pounded during 2019 and offer investors massive upside potential to the assigned price targets. They also range from very aggressive to more conservative, so investors have a solid variety of choices to match their risk tolerance. In addition, all could be considered potential buyout targets, especially those with bigger Permian Basin footprints.