The shares of upstream operator Athlon Energy Inc. (ATHL) soared to a 52-week high of $34.94 on Feb 14, 2014, buoyed by a slew of positive developments. The closing price of the company, as of the said date, was $33.59, representing an impressive year-to-date return of 13.2%.
Why the Bullishness?
With holdings of around 100,000 net acres in the eastern portion of the Permian Basin and approximately 30 years of vertical drilling inventory, Athlon Energy’s asset portfolio is primed for high production growth and peer-leading returns.
In first-quarter 2014, Athlon Energy anticipates its output to lie between 16,200−16,800 barrels of oil equivalent per day (BOE/D). The figure represents a significant increase of 10.3−14.4% as compared to 14,689 BOE/D, produced during the fourth quarter of 2013. The company also projects its 2014 production in the 19,750−20,750 BOE/D band, reflecting a substantial hike from 12,213 BOE/D output in 2013.
Moreover, in its recent operational update, Athlon Energy reported the results of its excellent operating performance during 2013. In 2013, the company increased its production by 73.0% to 12,213 BOE/D, against 7,047 BOE/D output in 2012. Additionally, in fourth-quarter 2013, the company produced roughly 14,689 BOE/D, a 69.0% increase from the year-ago quarter.
Finally, Athlon Energy maintains a stable balance sheet that will continue to provide the flexibility to fund its capital program, which is reflected in the company’s plan to invest roughly $595.0 million in 2014 for drilling activities.
Fort Worth, Texas-based Athlon Energy holds a Zacks Rank #1 (Strong Buy), implying that it is expected to significantly outperform the broader U.S. equity market over the next one to three months.
Other Stocks to Consider
One can also consider other players in the exploration and production sector like Matador Resources Company (MTDR), Warren Resources Inc. (WRES) and Clayton Williams Energy Inc. (CWEI). All the stocks sport the same Zacks Rank as Athlon Energy.
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