Early on this year, plenty of energy stocks were beating the S&P 500. May ruined that for many companies, but there are still a few out there that are handily crushing the benchmark index. Today we'll take a look at five companies that are soundly beating the S&P's year-to-date return of 2.8%.
And now, the heartbeats
At the time of this writing, a wide variety of energy stocks are up more than 15%:
Cheniere is up over 60% so far this year, which is an amazing gain in the energy sector. Its growth can be attributed to its plan to begin exporting liquid natural gas from its Sabine Pass terminal by 2015. The company received approval from FERC in April to sell the commodity to foreign markets. As a result, Cheniere is on the final step of raising funds and gearing up to build a $10 billion export facility on the Gulf Coast.
Though it has a few customers lined up, the risk here is that the world market for natural gas will shift just as quickly as the domestic one did. 2015 is a long way away, and Cheniere will have to compete with several LNG players on the global stage when its facility comes online.
Willbros is a small pipeline midstream services company. It constructs processing facilities and pipelines as well as providing maintenance services. Though the company's revenue is growing, it hasn't posted positive earnings per share for the last two quarters.
On the upside, first-quarter losses this year were smaller than in the same period last year, and Willbros is dutifully working toward reducing its debt.
And finally, last week the company announced it secured a contract for the construction of a 52-mile hydrogen pipeline in Louisiana.
Cobalt International Energy
Cobalt's shares skyrocketed in February on the news that its first well offshore Angola produced tremendous results. The Angolan pre-salt fields are expected to mirror the pre-salt fields offshore Brazil, and Cobalt's success corroborates that theory.
However, since that 50% pop in February, the stock has experienced two significant pullbacks. It dropped 10% shortly after the pop when management announced it was selling 47 million shares of its common stock. It dropped another 10% in April when the Financial Times reported a former top executive's failure to disclose ties between Cobalt's drilling partner and the Angolan government.
Ultimately, management may doom Cobalt's success, but for now, it remains a stock worth watching.
Vaalco is another exploration and production company that is looking to cash in on West Africa. The company controls 1.4 million acres off the coast offshore Angola and expects to start drilling a well with partner Total offshore Gabon later this year.
The company is looking for a partner to drill wells in the Angolan acreage, but after receiving a one-year extension for drilling, it has informed the Angolan government that it will drill with or without a partner.
Vaalco had a strong first quarter, nearly doubling revenue over the first quarter of last year. Though it has yet to produce oil in West Africa, it has assets elsewhere and is likely a more stable play than Cobalt International.
Success in the refining business is all about location right now, and HollyFrontier has a great one. The company has a refinery nearby Cushing, Oklahoma. The city is home to more oil than anyone knows what to do with, and HollyFrontier has capitalized on that. The company has been able to take advantage of cheap, local crude in a way that East Coast refineries cannot. As a result, eastern refineries are dying and HollyFrontier is thriving.
All of HollyFrontier's refineries are close to crude oil producing areas. As a result, in the first quarter of this year, expenses fell and revenue climbed compared to the first quarter of last year.
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Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by @TMFDuffy.
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