Seeking Alpha
Value
Profile| Send Message|
( followers)  

In the capital-intensive oil and gas sector, it's all too easy for companies to take on serious debt in efforts to fuel their growth. But companies that want to remain competitive have a huge advantage in staying flexible and adaptive, and one strategy for maintaining that edge is to keep down their debt. Today we looked specifically for oil and gas companies with impressive EPS future growth projections, but that whose growth is not predicated on taking on lots of debt, which could cut into their future profit margins. We these ideas together, we came up with a rather intriguing list of oil and gas companies to consider.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

The Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.

We first looked for oil & gas stocks. From here, we then looked for companies with estimated high-growth, with 1-year projected EPS growth above 25%. We next screened for businesses that have maintained a sound capital structure (D/E Ratio<.1). From here, we then looked for companies that operate with little to no long term debt (Long Term D/E Ratio<.1). We did not screen out any market caps.

Do you think these stocks are undervalued? Use our list to help with your own analysis.

1) Sanchez Energy Corporation (NYSE:SN)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$582.90M
Beta-

SN stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate295.24%
Debt/Equity Ratio0.00
Long Term Debt/Equity Ratio0.00
Short Interest7.21%

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition, exploration, and development of unconventional oil and natural gas resources. As of December 31, 2011, it had approximately 91,000 net leasehold acres in the oil and condensate, or black oil and volatile oil, windows of the Eagle Ford Shale in Gonzales, Zavala, Frio, Fayette, Lavaca, Atascosa, Webb, and DeWitt Counties of South Texas; approximately 1,200 net acres in the Haynesville Shale in Natchitoches Parish, Louisiana; and approximately 82,000 net acres in Lewis and Clark, Meagher, and Cascade counties of Montana. The company was founded in 2011 and is headquartered in Houston, Texas.

2) Enbridge Energy Management LLC (NYSE:EEQ)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$1.26B
Beta0.75

EEQ stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate27.96%
Debt/Equity Ratio0.00
Long Term Debt/Equity Ratio0.00
Short Interest1.87%

Enbridge Energy Management, L.L.C. operates as a limited partner of Enbridge Energy Partners, L.P. that owns and operates crude oil and liquid petroleum transportation and storage assets in the United States. It also owns and operates natural gas gathering, treating, processing, transportation, and marketing assets. The company manages and controls the business and affairs of Enbridge Energy Partners, L.P. Enbridge Energy Management, L.L.C. was founded in 2002 and is based in Houston, Texas.

3) Triangle Petroleum Corporation (NYSEMKT:TPLM)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$281.26M
Beta1.74

TPLM stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate942.90%
Debt/Equity Ratio0.00
Long Term Debt/Equity Ratio0.00
Short Interest10.79%

Triangle Petroleum Corporation engages in the acquisition, exploration, and development of unconventional shale oil resources in the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana. The company primarily holds interests in approximately 83,000 net acres in McKenzie and Williams Counties of North Dakota, and Roosevelt and Sheridan Counties of Montana. It also holds an 87% working interest in approximately 412,924 net acres of oil and natural gas leases in the Windsor Sub-Basin of the Maritimes Basin located in Nova Scotia, Canada. The company was formerly known as Peloton Resources Inc. and changed its name to Triangle Petroleum Corporation in May 2005. Triangle Petroleum Corporation was incorporated in 2001 and is based in Denver, Colorado.

4) Chesapeake Granite Wash Trust (NYSE:CHKR)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$960.71M
Beta-

CHKR stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate130.89%
Debt/Equity Ratio0.00
Long Term Debt/Equity Ratio0.00
Short Interest5.45%

Chesapeake Granite Wash Trust owns royalty interests in oil, natural gas liquids, and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of western Oklahoma. It has royalty interests in 69 horizontal producing wells and 118 horizontal development wells, as well as in approximately 29,300 net acres of area. As of December 31, 2011, the reserve estimates for the royalty interests were 17.9 million boe of proved developed reserves and 24.3 million boe of proved undeveloped reserves. The company was founded in 2011 and is based in Austin, Texas.

5) Miller Energy Resources, Inc. (NYSE:MILL)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$178.71M
Beta2.40

MILL stock chart

Key Metrics

1-Year Projected Earnings Per Share Growth Rate405.56%
Debt/Equity Ratio0.08
Long Term Debt/Equity Ratio0.00
Short Interest31.28%

Miller Energy Resources, Inc., an independent exploration and production company, engages in the exploration, development, and production of oil and natural gas wells in the Appalachian region of eastern Tennessee and in southcentral Alaska. As of April 30, 2012, the company owned approximately 105,713 gross acres of leasehold interests; the exploration license rights to an additional 534,383 acres; and interests in 10 crude oil and 5 natural gas wells in Cook Inlet and Susitna Basins. It also owned approximately 49,260 gross acres of leasehold interests with 183 producing oil wells, as well as owned interests in 181 producing gas wells in Appalachian region. The company was formerly known as Miller Petroleum, Inc. and changed its name to Miller Energy Resources, Inc. in April 2011. The company is headquartered in Knoxville, Tennessee.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/24/2012.

Source: 5 Low-Debt, High-Growth Oil & Gas Small Caps