S&P Energy Stocks cumulative has delivered a 23% spike in performance this year. Majors like XOM and Chevron Corp. (NYSE: CVX) together with smaller independents such as Permian Basin-based APA, AGYP, REI and CDEV are focused on 2022 performance.
ANALYSTS WAITING FOR MORE ENERGY EARNINGS REPORTS
Analysts await as assumed amazing earnings inject more life into the already lively oil securities markets. BP (NYSE: BP) and Dutch Shell could be the next beneficiaries. Conversely, XOM and CVX’s largest profit years since 2014 have already been baked in.
The next target oil bulls have on their radar is smaller oil and gas independents, an under-valued sector ripe for more profits.
The key catalyst for the following companies is the same as their conglomerate cousins, rising demand for oil and gas has triggered price hikes to near $90 per barrel for WTI and Brent crude. Triple-digit-priced oil ahead is a certainty.
FREE CASH FLOW, IMPROVED BALANCE SHEETS IN ENERGY
Traditionally, majors such as Exxon Mobil (NYSE: XOM) would pay a 5.15% annual dividend to retain shareholders. Chevron (NYSE: CVX) now says it is paying 6%. The difference is that with their best income statements since 2014, these companies actually have the higher free cash flow funding to pay them. And investors want more.
Majors and Permian-based independents are spending 15-17% and higher to volume on 2022 oil and gas exploration. Balance sheets are cleaner, share buyback programs are being announced and exploration initiatives for more drilling are in 2022 budgets.
More energy demand and higher volume in 2022 are as likely as higher crude prices.
HERE’S HOW OIL AND GAS INDEPENDENTS ARE PLANNING 2022
— Apache’s (NASDAQ: APA) revenue in full-year 2021 jumped YOY 83.8%. Analyst consensus is that APA’s earnings in 2022 will rise another 59%. Adjusted EBITDA increased 14.5% sequentially in Q4. Next quarter in 2022, analysts see revenues jumping 50%. APA explores for oil and gas in multiple countries
— Ring Energy Inc. (NYSEAMERICAN: REI) will continue to remain focused on controlling costs and maximizing cash flows. It seeks to clean up its balance sheet while analysts see its successful one-rig development drilling program continuing this year.
— Callon Petroleum Company (NYSE: CPE) likes to under-promise and over-deliver on earnings. Its stock is up double digits YTD. These earnings surprises have happened 70% of the time. Analysts have already baked in these ‘surprises.’ In the past, CPE’s earnings numbers have been 11.30% higher than its own guidance. This independent energy company is anticipated by analysts to deliver more of the same in 2022.
— Allied Energy Corporation (OTCMKTS: AGYP) is now an oil and gas producer, after an extremely fruitful year. It has hit gushers at six well sites on its leased properties in the Permian Basin; Green Lease, Annie Gilmer, and Prometheus. Conservative estimates find the independent is now pumping at least $1 + million annualized energy from two of those wells. Not only that, it is sitting on assets under management (AUM) of possibly double the $32 million a study filed in July found prior to production at two of the sites. The $32 million was calculated at old pricing — half of crude’s current spot price. The Company has proved itself to investors in 2021 operational, in 2022 this should mean increased revenue.
ENERGY INDY REPORTS $77.2 MILLION IN FREE CASH FLOW
— Centennial Resource Development (NASDAQ: CDEV) has raised its 2022 free cash flow guidance to $200-$220 million. That’s after last year’s spectacular achievement of $77.2 million in free cash flow. Analysts say this Permian Basin pure-play will continue its two-rig drilling strategy in 2022. Its shares rose 311.4% YTD in 2021.
Keep AGYP stock on your Watch List as energy stocks are spiking in value as more rigs are budgeted by both majors and independents in 2022.
Link to more news at https://alliedengycorp.com/ and https://twitter.com/AlliedEnergyCo1
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