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Here's Why Hold Strategy is Apt for EOG Resources (EOG)
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EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. In the past year, the stock has gained 19.5%, outpacing a 1.4% improvement of the composite stocks belonging to the industry.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $70 per barrel mark again, is highly favorable for upstream operations. EOG Resources, a leading oil and natural gas exploration and production company currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.
Risks
Rising lease and well-operating costs are hurting the company’s bottom line. Also, increasing transportation costs are reducing its profit.
Being an exploration and production company, EOG’s business is highly exposed to extreme volatility in oil and gas prices.
Through its ownership interests in onshore oil and natural gas properties in the United States, Evolution Petroleum is touted as a key independent energy player.
Oceaneering International is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.
Battalion Oil is also a highly prospective stock to gain on healthy oil prices since it is engaged in exploring, producing and developing liquid-rich resources in the prolific Delaware Basin. Battalion Oil is a pure-play Delaware operator with a deep inventory of high-return locations, securing a solid production outlook.
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Here's Why Hold Strategy is Apt for EOG Resources (EOG)
EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. In the past year, the stock has gained 19.5%, outpacing a 1.4% improvement of the composite stocks belonging to the industry.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $70 per barrel mark again, is highly favorable for upstream operations. EOG Resources, a leading oil and natural gas exploration and production company currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.
Risks
Rising lease and well-operating costs are hurting the company’s bottom line. Also, increasing transportation costs are reducing its profit.
Being an exploration and production company, EOG’s business is highly exposed to extreme volatility in oil and gas prices.
Stocks to Consider
Better-ranked players in the energy space include Evolution Petroleum Corporation (EPM - Free Report) , Oceaneering International, Inc. (OII - Free Report) and Battalion Oil Corporation (BATL - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Through its ownership interests in onshore oil and natural gas properties in the United States, Evolution Petroleum is touted as a key independent energy player.
Oceaneering International is well placed on improving oil prices since it is a leading provider of engineered services and products and robotic solutions to the energy companies working offshore. Higher oil price is supporting increased upstream activities, which, in turn, will improve demand for Oceaneering’s drilling and completions support services.
Battalion Oil is also a highly prospective stock to gain on healthy oil prices since it is engaged in exploring, producing and developing liquid-rich resources in the prolific Delaware Basin. Battalion Oil is a pure-play Delaware operator with a deep inventory of high-return locations, securing a solid production outlook.