Hess Corporation HES, a leading explorer and producer of oil and natural gas, currently sports a Zacks Rank #1 (Strong Buy). Importantly, over the past 30 days, the Zacks Consensus Estimate for the company’s 2019 bottom line has been revised upward from a loss of 57 cents per share to a profit of 16 cents, suggesting year-over-year growth of 121.6%.
What Makes It an Attractive Pick?
Focus on Prolific Plays
The company is focused on investing in oil and natural gas resources where the cost of operations is minimal, thereby creating room for lucrative returns. In the deepwater Gulf of Mexico, the company is among the key natural gas producers. Hess also has reach to the North Dakota Bakken shale play, with huge inventory of oil and gas drilling sites. In the oil-rich Stabroek Block, located off the coast of Guyana, the company has significant interests. The company estimates gross resources of more than 5 billion barrels of oil equivalent from 13 of its promising discoveries in the Stabroek Block.
With strong presence in onshore and offshore resources, the company expects compound annual growth rate of its daily oil equivalent production of more than 10% from 2017 to 2025. With growing production volumes, the company expects its cash flows to see compound annual growth rate of roughly 20% over the same time frame.
Decline in Costs
Hess also projects cash costs per barrel of oil equivalent decline of 30% from 2017 to 2021. Declining operating expenses is likely to help the company report strong margins and boost profitability.
Other Prospective Stocks
Other prospective players in the energy space are Enterprise Products Partners LP EPD, Ecopetrol S.A. EC and Anadarko Petroleum Corporation APC. All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enterprise Products has average positive earnings surprise of 17% for the last four quarters.
Ecopetrol is likely to witness earnings growth of 25.3% through 2019.
Anadarko Petroleum has average positive earnings surprise of 6.6% for the last four quarters.
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Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
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