This Week's Best and Worst Energy Stocks

Oil prices were on the move this week as fear rose that the events in Cyprus would damage the European economy. For the week, Brent crude was down 1.14% to $107.66 and WTI crude was up 1.5% to $93.71. U.S. natural gas was up 1% to $3.93.

This week's best two energy stocks
This week's energy-stocks leader was Nordic American Tankers (NYSE: NAT  ) , up 18.2% to $11.15. While the stock had a one-month gain of 24.2%, it's down 27% over the past 12 months. On Wednesday, the company announced that it had entered into an agreement to acquire a double-hull Suezmax tanker, its 21st ship, for $55 million. Shipping tanker companies were hammered the past five years as high rates caused a boom in shipbuilding, leading to a massive oversupply and a precipitous decline in dayrates. While Nordic American still continues to post losses, the company is in a good position if rates rebound, and Wednesday's acquisition shows that management is confident in the future.

Second among oil and gas stocks today was Abraxas Petroleum, up 11.7% to $3.11. The exploration and production company reported 2012 earnings and an operational update last Friday. While the fourth-quarter results were mixed, CEO Bob Watson reiterated management's guidance for 2013: "Strong production volumes in February and early March, along with incremental well performance and the efficiency gains in the Eagle Ford, give us confidence in our 2013 guidance of 4,900-5,200 boepd on a $70 million capex budget."

This week's worst energy stock
The worst performer on the week was Harvest Natural Resources (NYSE: HNR  ) , down 34.5% to $3.71. On Tuesday, Harvest filed with the SEC a notice that it will file its annual report late because of certain errors in its financial statements and said it will have to "revise and possibly restate its financial statements for certain periods in 2010, 2011, and 2012." The company also said it expects a net loss of approximately $9.6 million, or $0.26 per diluted share. Scariest of all, the company announced that when it does file its annual report, "our auditors have informed us that their opinion will include a going concern qualification." In layman's terms, the auditors are going to include a warning that the company is not in a condition to continue operating for the following year. While Harvest Natural Resources has significant assets, with everything going on in Venezuela, it remains to be seen if they will ever be able to sell them.

Big news
There were a few big pieces of news in the U.S. energy space this week.

Schlumberger reported weaker-than-expected drilling activity in the U.S. during the first quarter. The news was further confirmed on Friday as the Baker Hughes rig count fell for the third time in the past month, now down to 1,746, 11.2% less than at the same time last year.

On Tuesday, Hess (NYSE: HES  ) announced that it had sold 43,000 acres in South Texas for $265 million to Sanchez Energy. This is important to note, as that figure was way below analyst estimates for the value of the acreage. It's also bad news for others in the area, particularly Chesapeake Energy. Analysts are revising downward their valuation for Chesapeake's holdings in the area to $600 million, below previous estimates of more than $1 billion.

A major find was announced in the Gulf of Mexico on Wednesday by a partnership including ConocoPhillips (NYSE: COP  ) , Anadarko Petroleum, Cobalt International Energy, and Marathon Oil. The find was at the group's Shenandoah appraisal well, which found 1,000 feet of net pay. Analysts expect the well to be able to produce between 500 million and 1 billion barrels of oil over its lifetime.

Lastly, on Thursday, BP (NYSE: BP  ) announced that it had completed the sale of its stake in TNK-BP to Russian energy firm Rosneft for an 18.5% stake in the company plus $4.5 billion. In the meantime, on Friday BP announced an $8 billion share buyback, roughly the same amount the company had invested in TNK-BP.

The Foolish bottom line
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  • Report this Comment On March 24, 2013, at 8:35 AM, EllenBrandtPhD wrote:

    This is the third straight BOO! story on Harvest at Fool.com in three straight days, so it's getting to look like overkill for the Short side - which tends to hurt them, not help them.

    If the Shorts KNOW they're right, they tend to keep absolutely quiet and let a stock come to them. When they jump up and down screaming, shares aren't coming to them as they planned, and they're frustrated.

    These stories, positive or negative, do not influence the now probably over 90 percent of shares held by management and institutions.

    Retail is just not a factor in this stock.

    What happens will happen because of actual events, not because of propaganda.

    So far, it looks like the vast majority of Harvest's institutions are staying around to see what happens.

    The Venezuelan election is in two weeks - not two years.

    PDVSA came out with its earnings just yesterday. They were down by 12 percent, but the company says its capex budget will be larger than ever.

    The whole situation is a Telenovela - many of which are produced in Venezuela, by the way.

    These are the barest of bare facts - not surmises, facts:

    ***If there is a change of leadership in Venezuela, Harvest soars.

    ***If there is a change of leadership at PDVSA, Harvest soars.

    ***If management has the simple common sense to issue a statement that "we have retained Goldman, JPM, Morgan Stanley, The Man in the Moon to explore all possibilities to gain the greatest value for shareholders," Harvest soars.

    ***And when, not if, the next bid for either Petrodelta alone or all of Harvest comes in, Harvest soars and soars and does not stop soaring, because this time, any deal goes through fast.

    Now, any retail shareholder who wants to flee and not be patient and/or loves the 17 percent Short position - now down to under 10 percent? we don't know yet - has a perfect right to flee or not be patient or to help the Darling Shorts as much as they can.

    But those who wish to stay and speculate on a happy conclusion DO have a lot of comforting facts and probable scenarios to sustain them through a few more turbulent days or weeks.

    Everyone involved in this stock is advised to contact all of their best sources in Texas, in the petroleum industry, in Venezuela - even at the State Department - to get an idea of what is most likely to happen.

    Everyone is advised NOT to rely on Shorter Distorters getting paid to rant and rave and BOO!

    (And since I seem to be the only one taking any time at all to counteract the Ranting and Raving, people are more than welcome to contact ME. Harvest itself should be doing what I am doing. If they can't do it in-house, they need to hire someone to do it for them.)

  • Report this Comment On March 26, 2013, at 5:44 AM, EllenBrandtPhD wrote:

    Story just out from Platts says PDVSA's firsr dollar auction will finally enable them to pay what they owe to suppliers and foreign partners:

    http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/218691...

    This is the best possible news for Harvest, and the Long side needs to circulate it widely.

    Meanwhile, it is incredibly irresponsible of Yahoo and even the Nasdaq interactive site to keep posting PR blurbs on these frivolous lawsuits.

    When the stock rises a point, they will all go away. And companies' liability in these cases, which are generally bundled, is at the very worst only about 5 percent, if the company is shown to be at fault - which will not likely be the case here.

    As cited on Investor Village, look at a recent case, DNDN, when the company was judged to be at fault. Four years later!, DNDN had to pay a non-whopping 5 percent of the claims.

    If the company is not judged to be at fault, a la FSIN, the frivolity suits just go away.

  • Report this Comment On April 01, 2013, at 9:09 AM, EllenBrandtPhD wrote:

    Word out in filing yesterday that Glenhill Advisors has tripled its position to over five percent of the float over the past few trading days.

    Glenhill is a strong activist investor - the first to come into the stock since the restatement news came out.

    They don't throw money away.

    This may finally be the catalyst needed to bring a crowd of new activist funds into the stock, pumping for a takeout of the entire company.

    If you are considering supporting either the Longs or the Shorts, it might be a good idea to look at several of Glenhill's other recent purchases of "distressed property."

    Pretty much all of them have been very successful:

    They come in. Others they trade with follow. Stock stabilizes from the bottom and begins to move up.

    And crescendo of shyster law firms crowding in is also actually Bullish. Look at all - and I do mean ALL - the other "fallen stocks" these same ambulance chasers are after right now.

    There are several dozen such stocks, and most stabilized as soon as the number of shysters went above five or six.

    Those of us who were in FSIN remember this well. I think 20 shyster firms came in, Yahoo duitfully printing "news" on every new proposed frivolus suit.

    At that point, stock bottomed and more than doubled over the next 4 months.

    Don't take my word for any of this.

    Look back and see.

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