On Oct 9, Zacks Investment Research upgraded Resolute Energy Corporation (REN) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The independent oil and gas company Resolute Energy Corporation has delivered positive earnings surprises in the last 2 quarters with an average beat of 66.6%. The long-term earnings growth of the company is 15% on the back of sales growth of 25.0%.
Resolute Energy registered a positive earnings surprise of 33.33% in the second quarter. The results were backed by solid production in the quarter, which reached 13,107 barrels of oil equivalent (BOE) per day, 39% higher than the same quarter last year.
The company’s robust capital expenditure has helped it to develop its existing generation assets. Resolute Energy invested $164.8 million in the first half of 2013 in its ongoing tertiary recovery and drilling projects in Aneth Field and drilling and completion projects in Texas, North Dakota and Wyoming.
The company also invested $257 million to acquire additional oil and gas assets in the Permian Basin in March 2013. The acquired assets contributed to the production increase in the last quarter. Reinvigorated oil and gas drilling will keep the momentum alive at the company.
The Zacks Consensus Estimate for 2013 increased 88.9% in the last 60 days to 17 cents per share, reflecting year-over-year growth of 201.96%. For 2014, the consensus increased 61.9% over the same time period to 34 cents per share, reflecting growth of 98.32%.
Other Stocks to Consider
Besides Resolute Energy Corporation, other companies in the sector are also performing well and have a favorable Zacks Rank. These stocks include Zacks Ranked #1 (Strong Buy) Linn Co, LLC (LNCO), Matador Resources Company (MTDR) and Stone Energy Corp. (SGY).
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