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Friday, Sep 27
Simmons favors Permian oil and gas producers
- Shares of oil and gas E&P companies in the West Texas Permian Basin have outpaced peers with operations elsewhere, and Simmons analysts expect to see more of the same, believing "we are in the early innings of a significant increase in resource potential."
- Permian producers are likely to announce robust increases in capital spending for the next year as well as 19% total production growth, the analysts say, and oil production growth in 2014 is projected at an even more impressive 29% Y/Y.
- Among companies heavily engaged in the Permian, Diamondback Energy (FANG) is the YTD leader, up ~130%; also, Pioneer Natural Resources (PXD) has surged 76%, Cimarex Energy (XEC) is up 67% and Concho Resources (CXO) has gained 34%, while Approach Resources (AREX) is up just 5% YTD.