Onshore Drillers Bullish Outlook

Dan Steffens  |

The ongoing volatility in the stock market is affording investors with an opportunity to invest in high quality oil & gas producers and oilfield service companies at a deep discount to their asset value. In particular, junior and mid-cap companies at trading at extremely attractive valuations.

In my opinion, equities are pricing in much lower oil prices over the long-term. My view is that while there may be additional volatility in the crude oil price in the short-term, supply and demand fundamentals are very strong for oil and long-term pricing will remain high and equity prices will rise to correct this disconnect.

EPG has just completed a company profile for Union Drilling (UDRL) has been posted under our Watch List Tab.

We have been tracking UDRL on our Watch List for almost a year. The company's 3rd quarter results beat our forecast. We are bullish on the onshore drillers as we see continued strong demand for high quality onshore drilling equipment in the North American market, driven primarily by expanding drilling budgets in the shale plays.

At Energy Prospectus, we are focused on finding small and mid-cap energy firms that have significant near-term production growth and catalysts that will draw the market’s attention. Our current recommendation is that investors stay heavily weighted to crude oil, although we do see long-term potential for natural gas.

Author note: Company profiles are available to EPG members only but readers that would like to receive a free copy can contact Dan at dmsteffens@comcast.net.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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AA Alcoa Corporation 16.10 0.00 0.00 5,528,628 Trade
CSX CSX Corporation 79.56 -0.89 -1.11 3,853,566 Trade
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MO Altria Group Inc. 45.89 0.33 0.72 9,368,183 Trade
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PPL PPL Corporation 35.62 0.21 0.59 4,901,091 Trade
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GMCR Keurig Green Mountain Inc n/a n/a n/a 0 Trade
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TTM Tata Motors Ltd Limited 10.88 -0.17 -1.54 1,468,702 Trade
UNM Unum Group 29.97 -0.15 -0.50 1,328,531 Trade
EE El Pasoectric Company 68.32 -0.02 -0.03 106,468 Trade
HIG Hartford Financial Services Group Inc. (The) 58.05 -0.03 -0.05 2,380,306 Trade
F Ford Motor Company 7.89 -0.14 -1.74 58,326,329 Trade
AZN Astrazeneca PLC 50.17 1.23 2.51 4,105,822 Trade
NFLX Netflix Inc. 380.07 -5.93 -1.54 3,935,618 Trade
MRK Merck & Company Inc. (new) 82.34 -0.15 -0.18 8,870,220 Trade
ANF Abercrombie & Fitch Company 16.40 -0.65 -3.81 1,882,394 Trade
SUN Sunoco LP representing limited partner interests 31.04 0.33 1.07 273,818 Trade
IHG Intercontinental Hotels Group American Depositary Shares (Each representing one) 65.14 -0.78 -1.18 626,350 Trade
BRCM Broadcom Corp. n/a n/a n/a 0 Trade
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DUK Duke Energy Corporation (Holding Company) 102.43 1.00 0.99 3,520,070 Trade
THRX Theravance Inc n/a n/a n/a 0
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CMCSA Comcast Corporation Class A Common Stock 45.82 -0.20 -0.43 21,235,478 Trade

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