The positive trend expected in the oil and gas sector is going to reward a lot of independent oil drilling companies in the near future. These independent oil drilling companies focus on the oil exploration and extraction processes. These companies use specialized techniques like horizontal drilling to provide new oil reserves all over the world. Companies which use innovative extraction techniques like horizontal drilling engage in new oil shale exploration and make optimum use of resources constitute a good drilling investment. One should also select certain independent oil exploration companies that have good prospects in the current year and which look attractive at current price levels. Here are four companies that specialize in exploration and oil extraction to consider as possible investment opportunities:
Newfield Exploration (NFX, Financial) is currently trading around $38.18, toward the low end of its 52 week range between $34.41 and $77.93. With a price to earnings ratio of around 11.56 and earnings per share of $3.62, the stock is estimated to have a six month target of above $50. Having a price to equity ratio in the multiples of 10, Newfield Exploration has a huge potential in its Uinta basin resource. Newfield has a market capitalization of $5.14 billion. The company operates as an independent oil and gas company, engaged in the exploration and distribution of crude oil. I urge investors to watch this stock closely. The stock should be purchased on dips into the $38 to $40 range.
Denbury Resources (DNR, Financial) engages in the exploration and acquisition aspects of oil and natural gas. The company carries out its operations primarily in the Gulf region of Texas, Alabama, Mississippi, and Louisiana. Denbury Resources is currently trading around $19, within its 52 week range of $10.20 and $26.03. Its market capitalization stands at $7.5 billion. The company has earnings per share of $1.29, while a price to earnings ratio of 15.16. The price earnings to growth ratio is .67. At its current price level, the stock is oversold, and I would expect a pull back in the near future. I rate this stock a buy at its current price, primarily due to its relative strength index of 70.
SM Energy Company (SM, Financial) engages in the exploration, production, and extraction of crude oil and natural gas. The company uses new technologies and methods including horizontal drilling. SM Energy has increased its operations in the Eagle Ford shale region to utilize its full capacity in the exploration and oil extraction process. The company has also increased its focus on the Bakken and Granite Wash basin.
The strength of SM Energy Company lies in its natural gas reserves, a significant part of the company's revenue stream. Shares are currently trading around $80, within a 52 week range of $53.45 and $88.50. The company has a market capitalization of $5.16 billion, along with earnings per share of $5.59, and a price to earnings ratio of 14.42. Its 5-year earnings per share growth forecast is 44.6%. In my opinion, the stock presents a solid investment at current price levels.
Unit Corporation (UNT, Financial) carries out its oil and gas activities in exploration, drilling, and mid-stream projects through its Unit Petroleum Company, Unit Drilling Company, and Superior Pipeline Corporation. The three segments of the company work with each other to increase liquid exposure, production, and oil reserves. Unit Corporation operates primarily in the Marmaton, Segno and Granite Wash basins in the U.S. Unit Drilling Company, another segment, is one of the prominent U.S. onshore contractors, specializing in deepwater drilling.
Shares are currently trading around $49, between a 52 week range of $33.56 and $63.81. The company has a price to earnings ratio of 12.52 and earnings per share of $3.93. Unit Corporation has a market
capitalization of $2.37 billion. I believe Unit Corporation is a solid buy at current price levels, primarily due to its use of new techniques such as deepwater drilling, and the synergy created between its three segments to increase production and oil reserves.
Newfield Exploration (NFX, Financial) is currently trading around $38.18, toward the low end of its 52 week range between $34.41 and $77.93. With a price to earnings ratio of around 11.56 and earnings per share of $3.62, the stock is estimated to have a six month target of above $50. Having a price to equity ratio in the multiples of 10, Newfield Exploration has a huge potential in its Uinta basin resource. Newfield has a market capitalization of $5.14 billion. The company operates as an independent oil and gas company, engaged in the exploration and distribution of crude oil. I urge investors to watch this stock closely. The stock should be purchased on dips into the $38 to $40 range.
Denbury Resources (DNR, Financial) engages in the exploration and acquisition aspects of oil and natural gas. The company carries out its operations primarily in the Gulf region of Texas, Alabama, Mississippi, and Louisiana. Denbury Resources is currently trading around $19, within its 52 week range of $10.20 and $26.03. Its market capitalization stands at $7.5 billion. The company has earnings per share of $1.29, while a price to earnings ratio of 15.16. The price earnings to growth ratio is .67. At its current price level, the stock is oversold, and I would expect a pull back in the near future. I rate this stock a buy at its current price, primarily due to its relative strength index of 70.
SM Energy Company (SM, Financial) engages in the exploration, production, and extraction of crude oil and natural gas. The company uses new technologies and methods including horizontal drilling. SM Energy has increased its operations in the Eagle Ford shale region to utilize its full capacity in the exploration and oil extraction process. The company has also increased its focus on the Bakken and Granite Wash basin.
The strength of SM Energy Company lies in its natural gas reserves, a significant part of the company's revenue stream. Shares are currently trading around $80, within a 52 week range of $53.45 and $88.50. The company has a market capitalization of $5.16 billion, along with earnings per share of $5.59, and a price to earnings ratio of 14.42. Its 5-year earnings per share growth forecast is 44.6%. In my opinion, the stock presents a solid investment at current price levels.
Unit Corporation (UNT, Financial) carries out its oil and gas activities in exploration, drilling, and mid-stream projects through its Unit Petroleum Company, Unit Drilling Company, and Superior Pipeline Corporation. The three segments of the company work with each other to increase liquid exposure, production, and oil reserves. Unit Corporation operates primarily in the Marmaton, Segno and Granite Wash basins in the U.S. Unit Drilling Company, another segment, is one of the prominent U.S. onshore contractors, specializing in deepwater drilling.
Shares are currently trading around $49, between a 52 week range of $33.56 and $63.81. The company has a price to earnings ratio of 12.52 and earnings per share of $3.93. Unit Corporation has a market
capitalization of $2.37 billion. I believe Unit Corporation is a solid buy at current price levels, primarily due to its use of new techniques such as deepwater drilling, and the synergy created between its three segments to increase production and oil reserves.
