3 Small Cap Energy Stocks That May See Large Price Changes

Small cap oil and gas producers, more sensitive to selling pressure in December, may have more appreciation potential in January. Buy-recommended Cimarex Energy (XEC) is concentrated on natural gas, has almost no debt and has an experienced leader, Mick Merelli, who has made money for investors over two decades.

Hold-rated Encore Acquisition (EAC) has long-life oil reserves, moderately high debt and an experienced leader, Jon Brumley, who has made money for investors over four decades. Hold-rated Berry Petroleum (BRY), pumping oil for 100 years, has built-in growth in undeveloped reserves along with high debt.

Canadian producer Birchcliff Energy [BIR.TO] supports a large land position in Alberta’s Montney Doig natural gas play with cash flow from proven production offset by modest debt. Meanwhile, stock prices for the four issues are down a median 60% from their highs, but up a median 15% from their lows. Though oil and gas prices trend lower they are merely following stock prices, as we see it. We are optimistic that stock prices have seen their lows seasonally, at the same time we are prepared to wait longer for the sustained upturn.

Originally published on December 23, 2008.

Comments

[Zenith:]

I have bought one oil stock. Three years ago. It is a very small, debt free company with no debt and some good leases. I have seen the leases, and talked with the CEO. He is from a seasoned oil family, several generations.The offices are in Fort Worth. Some may laugh, but it is a penny stock, They do have working wells, and are on the brink of new discoveries. Even through the downturn, they are still moving along. The company is HMGP. This is the only penny stock I own, and it is the only one I will buy,
As to why the oil prices dropped, it will soon become clear, we don't have enough, and in the years to come, we will have less. I like your article. Clear and to the point.

Jan 12 08:22 AM

[zeronimo:]

At the sector level, "Independent Oil & Gas" is bearish. For individual stocks to move up in this sector/industry, the overall sector has to be bullish.

Jan 12 10:29 AM

[PeteK:]

The wholle World needs oil & gas.
Especially the USA.

Feb 14 04:52 PM