Shares of upstream energy operator Athlon Energy Inc. (ATHL) soared to a 52-week high of $43.76 on May 21, 2014, buoyed by a slew of positive developments. The closing price of the company, as of the said date, was $43.38, representing an impressive year-to-date return of 46.2%.
Why the Bullishness?
Holding around 100,000 net acres in the eastern portion of the Permian Basin and with approximately 30 years of vertical drilling inventory, Athlon Energy’s asset portfolio is primed for high production growth and peer-leading returns. Athlon Energy also focuses on lowering its drilling and completion expenses. By employing the most recent technology, the company is constantly trying to reduce its drilling cost.
Recently, Athlon Energy declared that it expects to produce roughly 23,000–24,250 barrels of oil equivalent every day (BOE/D) during 2014, reflecting an increase from its previous guidance of 19,750−20,750 BOE/D. Additionally, in order to exploit its high value resources, the company has hiked its 2014 planned capital spending for its drilling operations to $700.0 million.
Moreover, Athlon Energy reported strong first-quarter 2014 results, primarily attributable to record daily production volumes. The company reported adjusted earnings of 28 cents per share, beating the Zacks Consensus Estimate and improving year over year.
Fort Worth, TX-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
Apart from Athlon Energy, one can also consider players in the same industry like Encana Corporation (ECA), Ultra Petroleum Corp. (UPL) and Clayton Williams Energy Inc. (CWEI). All these stocks also sport Zacks Rank #1 (Strong Buy).
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