On Mar 9, Zacks Investment Research upgraded EPL Oil
& Gas Inc. ( EPL ) to a Zacks Rank
#1 (Strong Buy).CALUMET SPECLTY (CLMT): Free Stock Analysis
ReportEPL OIL&GAS INC (EPL): Free Stock Analysis
ReportMEMORIAL PRODUC (MEMP): Free Stock Analysis
ReportNGL ENERGY PART (NGL): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
Why the Upgrade?
EPL has been using acquisitions to expand its presence in the Gulf
of Mexico (GoM). Continued increased production has been a boon for
this independent energy exploration company, whose earnings are
expected to rise strongly in 2013.
EPL reported fourth quarter 2012 non-GAAP earnings per share of 67
cents on Mar 7, beating the Zacks Consensus Estimate of 47 cents by
43% and the year-ago profit of 39 cents by 72%.
Results were driven by liquids volume (oil and natural gas
liquids), which was up 43% year over year to a record 13,516
barrels per day (Bbl/d). EPL's output growth can be attributed to
solid performance from its oil-weighted projects, as well as
contribution from the Hilcorp property buy.
On Oct 31, 2012, EPL completed its previously announced
acquisition of certain shallow water GoM assets from privately-held
Hilcorp Energy GOM Holdings LLC for $550 million. The transaction
will increase EPL's proven reserves base by almost 100% to roughly
74 million oil-equivalent barrels (BOE), while boosting daily
production by some 80% to more than 20,000 BOE.
The company expects the volume uptrend to continue and projects
liquids volumes to hit 16,000-17,000 Bbl/d in the first quarter,
going further up to 17,000-18,500 Bbl/d in 2013.
Based on the success of the company's acquire-and-exploit policy,
analysts are predicting strong earnings growth for EPL in 2013. The
Zacks Consensus Estimate of $3.29 represents earnings per share
growth of 79% over 2012.
Other Stocks to Consider
In addition to EPL, one can look at downstream operators like
Calumet Specialty Products Partners L.P. ( CLMT ) and NGL
Energy Partners L.P. ( NGL ), as well as
domestic energy explorer like Memorial Production Partners
L.P. ( MEMP ) as attractive
investments. All these firms - sporting a Zacks Rank #1 (Strong
Buy) - offer value and are worth accumulating at current