On Dec 24, Zacks Investment Research upgraded independent oil
and gas exploration company,
Cabot Oil & Gas Corp.
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
On Dec 19, Cabot revised its 2013 production growth outlook. The
Houston, Texas-based upstream operator has set its new production
growth guidance at 50%-55%, up from the previous outlook of
44%-54%. Lately, the company has been churning out roughly 1.5
billion cubic feet of natural gas per day from Marcellus shale
operations, reflecting a year-over-year hike of 50%. This record
production has encouraged the company to lift its 2013 production
Recently, Cabot also signed a purchase and sale contract to
divest some conventional oil and gas resources in the
Mid-Continent area. The company is expected to receive roughly
$123.0 million from the anonymous buyer. Cabot revealed that the
proceeds from the non-core asset sale will likely be utilized for
investing in more prospective projects. To date, the company has
divested $325 million worth of non-core oil and gas properties.
We believe that the asset sale program will help the company to
earn significant earnings for shareholders.
Moreover, during the current quarter, Cabot repurchased roughly
4.8 million stocks, reflecting the company's continuous effort to
create shareholder value.
Additionally, Cabot's diversified asset portfolio is spread
between low-risk/long reserve-life Appalachian assets and
large-volume/rapid-payout Gulf Coast properties, with further
variety from large prospect inventories in the Rocky Mountains
and the Anadarko Basin that have a broad mix of production and
Finally, Cabot maintains a stable balance sheet that will
continue to provide flexibility to fund its capital program and
pursue bolt-on acquisitions. As of Sep 30, 2013, Cabot had
$1,162.0 million in long-term debt, with a debt-to-capitalization
ratio of 33.3%.
Other Stocks That Warrant a Look
Apart from Cabot, one can also consider other better-ranked
players in the oil and gas exploration and production sector like
Harvest Natural Resources Inc.
Penn Virginia Corp.
Clayton Williams Energy Inc.
). All the stocks sport a Zacks Rank #1 (Strong Buy).
CABOT OIL & GAS (COG): Free Stock Analysis
WILLIAMS(C)ENGY (CWEI): Free Stock Analysis
HARVEST NATURAL (HNR): Free Stock Analysis
PENN VIRGINIA (PVA): Free Stock Analysis
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