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As we near the end of the first quarter, PLS looks at U.S. E&P stocks that have been winners for investors in 2012 thus far. Callon Petroleum and Goodrich Petroleum have outperformed peers in 2012, achieving equity returns greater than 35% YTD already.
Callon, historically focused on the Gulf of Mexico, has rather quietly built a 24,000 acre Permian position (100% operated) since 2009. In the Permian, Callon has mostly drilled into the prolific Wolfberry, with 59 wells to date and a 2011 exit rate of 1,300 Boepd and recently expanded o the horizontal Wolfcamp play. Callon has been rewarded by Wall Street for its financial stability, liquids focus and reserve growth.
Goodrich was an incredible stock in 2007, as the firm's Bethany-Longstreet field in the Haynesville was one of the top, if not the top, U.S. onshore plays. As gas prices fell, so did Goodrich's stock price. Since mid-2010, Goodrich has done a commendable job transitioning its portfolio towards oil & liquids. The company's main focus now is the Eagle Ford where it is spending $175 million of its $250 million capex budget. Goodrich continues to drill into its core Haynesville play, as well as newly tested formations in the area (Angelina River, Bossier, Taylor Sand), and has added an 80,200 acre position in the Tuscaloosa Marine oil shale play.
Callon & Goodrich aren't the only winners thus far this year. A strong stock market in general, coupled with strong oil prices, has seen investors flock to oil weighted E&Ps. Below are slides from additional high performers: Continental, Cimarex, Denbury and Magnum Hunter.
2012 YTD Top U.S. E&P Stock Performers - as of 03/15/12| Company | Exchange:Ticker | Market Cap
($MM) | $/Share
01/01/12 | $/Share
03/15/12 | % Change |
|---|
| Callon Petroleum | NYSE:CPE | $273 | $4.97 | $6.94 | 40%
| | Goodrich Petroleum | NYSE:GDP | $688 | $13.73 | $18.91 | 38%
| | Continental Resources | NYSE:CLR | $15,723 | $66.71 | $87.51 | 31%
| | Cimarex Energy | NYSE:XEC | $6,874 | $61.90 | $80.21 | 30%
| | Denbury Resources | NYSE:DNR | $7,397 | $15.10 | $19.17 | 27%
| | Magnum Hunter Resources | NYSE:MHR | $884 | $5.39 | $6.67 | 24% |
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