In the volatile energy sector, independent oil and gas exploration company growth is surging.
63% INCREASE IN OIL AND GAS RIGS
Oil and gas rig count jumped 63% last week to 588 — its highest since April 2020, according to a new report by Baker Hughes Co.
Cowen & Co said that independent exploration and production (E&P) companies it tracks plan to boost spending by 13% YOY in 2022. Last year, companies increased their spending by only 4%.
Why?
Because demand for oil and gas has reached peak levels. The International Energy Agency (IEA) is overwhelmed by the demand for oil. It thought the Omicron variant would cut oil demand — it was wrong. “Demand dynamics are stronger than many of the market observers had thought,” Bloomberg reports.
WTI Crude and Brent Crude are again back at $80+ per barrel prices. Analysts say prices could reach $150 per barrel later this year.
INDEPENDENT OIL AND GAS ACTIVITY RISING:
-Pioneer Natural Resources (NYSE: PXD), an Irving, Texas-based independent oil and gas exploration company, has delivered a 9.04% return half a month into 2022. Its 12-month returns are up 50.26%. ClearBridge Investments called its ‘overweight to energy’ strategy a performance benefit. It also said the sector remains at less than 3% of the S&P 500 and is underinvested and attractive.
-Marathon Oil Corporation (NYSE: MRO) stock jumps 23.5% in the last month. In its upcoming earnings release, analysts expect 550% YOY growth. Consensus reports among stock specialists say revenue should hit $1.59 billion — 91.6% higher than the previous quarter. Near-term higher stock prices of MRO is attracting the attention of Wall Street investors.
AGYP HITS OIL AT 5 WELLS, EXPLORING MORE
-Allied Energy Corporation (OTCMKTS: AGYP) stock is up 356% on the year, and has consolidated at its current price. Momentum may be turning north for this indy producer as it’s been green five sessions in a row.
Texas-based independent oil and gas producer, AGYP, has hit oil at five wells and is optimistic about hitting a on its sixth located at the recently acquired Prometheus lease. The company specializes in recovering oil at older and once commercial drill sites. It has been successful and has identified more wells in its energy pipeline.
-Devon Energy Corporation (NYSE: DVN) stock reached its 52 week high on January 12. Technical indicators for this independent producer of oil and natural gas energy point to higher valuation in the near future. RealMoney has set an ultimate price target of $111. Prices have tripled in the past three months. DVN is trading above the 50-day moving average and rising 20-day line.
Reuters reports a larger number of oil and gas independents and even majors are cranking up the wells again. Sharply higher oil and gas prices cannot meet the energy demands of Europe and the U.S.
$220 CRUDE PRICES?
Oil has surpassed seven-year highs. Bank of America predicted oil skyrocketing to $220 per barrel by next summer. While their prediction was a few months ago, and some analysts like EIA predict a price drop in the commodity, one thing is certain: demand is back and producers will need to fill this need.
AGYP is well-positioned as a domestic producer. Managed by senior oil and gas executives with efficient, time-tested tactics, the company is sitting on more than $32 million in energy reserves, a survey reports.
Oil and gas rigs are growing in Texas and New Mexico, focused on the Permian Basin.
Independents see the opportunities ahead and are active. Majors such as BP, Chevron, Exxon Mobil Corp. and Occidental Petroleum are also planning to increase investment, spending 15-17% in 2022 according to analysts.
All of the companies highlighted in this article have the opportunity to make investors happy in 2022. AGYP as a speculative play could offer larger returns percentage-wise for retail investors, based on the price action the stock has shown in the past 12 months. Put AGYP on your watchlist today. Start research here: https://alliedengycorp.com/ and https://twitter.com/AlliedEnergyCo1