With the Energy Select Sector SPDR Fund XLE up roughly 45% year-to-date, shopping for energy stocks may prove to be more difficult when searching for more upside.
The OPEC + coalition announced the reduction of more than 2 million barrels of oil per day and with the Russia-Ukraine War adding to the strain on global gas supplies, commodity prices are expected to remain elevated throughout the rest of the year.
Back in early August, Goldman Sachs head of energy research Damien Courvalin forecasted a price target of $130 per barrel of Brent crude oil by the end of the year.
Even if oil were to go back to $100 per barrel, energy companies will continue to reel in money. Here are two companies to look into.
USA Compression Partners LP USAC is offering a dividend yield of 11.67% or $2.10 per share annually, through quarterly payments, with an inconsistent track record of increasing its dividends.
USA Compression Partners provides compression services in the U.S. in terms of total compression fleet horsepower to customers relating to infrastructure applications, including allowing for the processing and transportation of natural gas through the domestic pipeline system and enhancing crude oil production through artificial lift processes.
USA Compression is confirming its full-year 2022 guidance of net income in the range of $33 million to $53 million and adjusted EBITDA to be in the range of $406 million to $426 million.
Viper Energy Partners LP VNOM is offering a dividend yield of 10.10% or $3.24 per share annually, utilizing quarterly payments, with a decent track record of increasing its dividends once in the past year.
Viper Energy Partners was formed by Diamondback Energy Inc. FANG in 2014 to own mineral royalty interests in the Permian Basin.
Viper Energy Partners' board of directors increased the authorization of its common unit repurchase program to $750 million, up from $250 million previously.
The firm has initiated average daily production guidance for the third quarter and fourth quarter of 2022 of 19,250 to 20,250 bo/d (32,750 to 34,500 boe/d).
“The second quarter was an outstanding quarter for Viper as oil production grew nine percent quarter over quarter, which, combined with the benefit of increasing commodity prices and no inflationary cost pressures, resulted in a 20% increase in cash available for distribution,” said Travis Stice, CEO of Viper’s General Partner.
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