Oil Stocks: The Real Bull Market (NYSE: XEC) (OTC US: AGYP) (NYSE: MTDR)
March 11, 2021 at 07:31 AM EST
If you thought the bull market was all about speculative tech stocks, cryptocurrency plays, and electric vehicle companies, think again. By far, the strongest sector so far in 2021 in the S&P is the energy sector.
Crude oil has been surging, helping to drive the XLE up 40% so far this year.
With that in mind, we take a closer look at a few stocks aligned with that theme that may deserve some extra attention, including: Cimarex Energy Co (NYSE: XEC), Allied Energy Ord Shs (OTCMKTS: AGYP), and Matador Resources Co (NYSE: MTDR).
Cimarex Energy Co (NYSE: XEC) frames itself as an independent oil and gas exploration and production company with nearly 620 million barrels of proven reserves and owned interests in roughly 2,800 productive oil and gas wells.
The company’s principal operations in the Permian Basin and Mid-Continent areas of the U.S.
Cimarex Energy Co (NYSE: XEC) most recently announced that Megan Hays will join Cimarex as Vice President of Investor Relations. Megan joins Cimarex from Concho Resources Inc., where she most recently served as Vice President of Investor Relations and Public Affairs. According to the release, she has 15 years of experience in strategic communications, sustainability, corporate development and capital markets within the energy industry. Megan will report to Senior Vice President and Chief Financial Officer, Mark Burford.
Mr. Burford, said, “We are excited to have Megan join our team. She is an accomplished leader with a strong network of relationships across the financial community. Megan’s experience in the industry – from strategy to sustainability – will make her a great addition to our company.”
And the stock has been acting well over recent days, up something like 4% in that time.
Cimarex Energy Co (NYSE: XEC) pulled in sales of $434.7M in its last reported quarterly financials, representing top line growth of -33.9%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($273.1M against $660.2M, respectively).
Allied Energy Ord Shs (OTCMKTS: AGYP) specializes in the business of reworking and re-completing existing oil and gas wells located in the thousands of mature oil and gas producing fields across the United States, with the objective of mobilizing its expertise and technology to drive higher production volumes, longer well life, and more efficient recovery of proven and available oil and gas reserves in acquired wells.
AGYP recently put out a comprehensive corporate update that explains its overall strategy, and that’s worth checking out. The strategy appears to be centered on diversification and selectivity in target wells.
Allied Energy Ord Shs (OTCMKTS :AGYP) most recently announced that it has signed an agreement with a premier partner in the Texas oil industry to pursue an immediate relationship concerning the majority ownership of two producing oil wells in northern Texas.
According to the release, this agreement signifies the final step before a definitive contract is signed by Allied Energy Corp. to secure an 100% Working interest 80% Net Revenue interest ownership stake in the two wells and 890.7 leased acres, with the leasehold owners.
According to CEO George Monteith, “This month, we plan to sign a contract to acquire majority ownership in two producing oil wells in northern Texas and are committed to securing this majority ownership through entirely non-dilutive means. We are excited about the immediate revenue opportunities from current production levels at these two wells and are also confident in our plans to improve production through our expertise and use of technology.”
Allied Energy Ord Shs (OTCMKTS: AGYP) shares have been in a sturdy upward trend over the past 2 months, rising as much as 500% in that time as the company ramps up its operations. Given the potential for an oil shortage this year, AGYP is well positioned for further gains if the execution is there.
Matador Resources Co (NYSE: MTDR) bills itself as an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. Its current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas.
Matador also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.
Matador Resources Co (NYSE: MTDR) most recently reported its estimated proved oil and natural gas reserves at December 31, 2020, which showed a 7% year-over-year increase in total proved reserves, including a 17% year-over-year increase in proved developed reserves and a 12% year-over-year increase in Delaware Basin total proved reserves, each as compared to the Company’s oil and natural gas reserves at December 31, 2019.
Joseph Wm. Foran, Matador’s Chairman and CEO, commented, “Matador is pleased today to report a 7% year-over-year increase in our total proved reserves from 252.5 million BOE on December 31, 2019 to 270.3 million BOE on December 31, 2020, an all-time high for Matador. This reserves increase was achieved despite the 31% reduction in oil price and the 23% reduction in natural gas price required to be used in estimating proved reserves at December 31, 2020, as noted in the summary table following my remarks. Further, this increase in total proved reserves reflects organic reserves growth from Matador’s oil and natural gas properties and was achieved despite the reduction in the Company’s operated rig count from six to three during 2020.”
And the stock has been acting well over recent days, up something like 10% in that time. Shares of the stock have powered higher over the past month, rallying roughly 32% in that time on strong overall action.
Matador Resources Co (NYSE: MTDR) pulled in sales of $257.6M in its last reported quarterly financials, representing top line growth of -17.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($91.4M against $290.9M, respectively).
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