We are upbeat about Whiting Petroleum Corporation’s (NYSE:WLL) prospects and believe it is a promising pick at the moment.
The company currently carries a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Let’s delve deeper to analyze the factors that are working in favor of this upstream energy player.
Focus on Prolific Williston Basin
Whiting Petroleum has a strong foothold in the prolific Williston Basin where North America’s significant oil deposits are located. In the Williston Basin, Whiting Petroleum has drilled 1,347 net wells across 470,443 net acres.
The company is planning to spend a major chunk of its 2019 capital budget on the Williston Basin. Of the total capital spending projected by the company in the band of $800-$840 million, Whiting Petroleum has decided to expend $662 million on Williston Basin operations. This is likely to help the company to reach its production growth target of 11% in the basin through 2019.
Since Whiting Petroleum is an oil-focused explorer and producer, recovering crude prices is likely to back the company’s production volumes.
Cash Costs Plunge, Free Cashflow Robust
Total cash costs of Whiting Petroleum declined 27% through 2018 from 2014, providing support to the bottom line. The company recorded total cash cost of $13.65 per barrel of oil equivalent (BoE) in 2018, substantially lower than $18.73 per BoE in 2014.
Through 2018, the company recorded free cash flow of $280 million. Moreover, Whiting Petroleum projects robust free cash flow for 2019 on the assumption that average oil price will rise above $55 a barrel.
Other Stocks to Consider
A few other prospective players in the energy space are Antero Resources Corporation (NYSE:AR) , NGL Energy Partners LP (NYSE:NGL) and ProPetro Holding Corp. (NYSE:PUMP) . While Antero Resources and NGL Energy sport a Zacks Rank #1 (Strong Buy), ProPetro Holding carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Resources is likely to see earnings growth of 20% over the next five years.
NGL Energy is likely to witness earnings growth of 227% for the fiscal year ending March 2019.
ProPetro Holding is likely to see 19.5% earnings growth through 2019.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
NGL Energy Partners LP (NGL): Free Stock Analysis Report
Whiting Petroleum Corporation (WLL): Free Stock Analysis Report
Antero Resources Corporation (AR): Free Stock Analysis Report
ProPetro Holding Corp. (PUMP): Free Stock Analysis Report
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Zacks Investment Research