Denver, CO-based Bonanza Creek Energy Inc. (BCEI) announced the closing of its previously declared $300 million aggregate principal amount of 5.75% senior unsecured notes due 2023.
The energy explorer – which is scheduled to report second quarter 2014 results on Aug 7 – plans to use the net proceeds from this offering to pay back in full the outstanding borrowings under its revolving credit facility as well as for corporate purposes that may consist of financing its drilling program and other capital spending.
Bonanza Creek Energy, which had its IPO in 2011, is a publicly traded exploration and production company engaged in the acquisition, finding and development of oil and gas properties in the U.S. The company’s operations are concentrated primarily in the liquids-rich acreage of the Rocky Mountains and the Mid-Continent regions.
Having done a stellar job at raising volumes and reserves, analysts are predicting strong earnings growth for Bonanza Creek Energy over the next couple of years. The 2014 Zacks Consensus Estimate is $2.72, representing 56% earnings per share growth over 2013. Next year’s average forecast is $3.46, corresponding with 27% growth.
With a proven exploration strategy, strong cash margins, and a robust hedging program that minimizes oil price exposure, Bonanza Creek Energy is primed for attractive returns. Moreover, a peer-leading balance sheet, together with a business model focused on operational efficiencies and attractive acquisitions/growth projects, makes the oil and gas finder a good choice for investors looking for substantial value.
As a result, Bonanza Creek Energy currently retains a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
In addition to Bonanza Creek Energy, there are certain other domestic explorers and producers like Swift Energy Co. (SFY), Midstates Petroleum Company Inc. (MPO) and WPX Energy Inc. (WPX) that offer even greater value and are worth buying now. All the firms sport a Zacks Rank #1 (Strong Buy).