Newfield Exploration, Parsley Energy, WPX Energy Upgraded At Seaport Global

The overall sentiment within the Exploration & Production sector has changed for the better as a 50-percent spike in oil prices since last June has been matched with flat performance for the E&P group, according to Seaport Global.

The Analyst

Seaport Global's Mike Kelly and team made the following upgrades:

• Newfield Exploration Co. NFX from Neutral to Buy.
• Parsley Energy Inc PE from Neutral to Buy.
• WPX Energy Inc WPX from Neutral to Buy.

Newfield Exploration

• The company's reputation of under-promising and over-delivering in the STACK should continue.
• Anadarko oil volumes should grow by up to 30 percent per year over the next three years, which is a higher growth rate compared to its gas business.
• The company's strip net asset value is estimated at $38 per share.

Parsley Energy

• Parsley Energy should benefit from from its ongoing operational turnaround and strong exposure to Permian crude and gas.
• The company holds a major advantage over its peers as it can move 95 Mbopd out of the Permian.
• The company's strip net asset value is estimated at $39 per share.

WPX Energy

• WPX's management team alone justifies a premium after transitioning from an over-levered gas company into a Delaware and Bakken powerhouse.
• Cash flows should triple through 2020.
• The first-quarter earnings report foreshadows improving results over time and a strong operational trajectory.
• The company's net asset value is estimated at $25 per share.

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