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Today's Top 3 Oil and Gas Stocks

By Dan Dzombak - Apr 1, 2013 at 6:03PM

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These were the top movers after a flurry of deals over the weekend.

Oil prices and stocks were on the move today after the release of weaker-than-expected manufacturing data. At 5:00 p.m. ET, Brent crude was up 0.87% to $110.92, and WTI crude was down 0.33% to $96.90. U.S. natural gas was up 0.15% to $4.03. The VIX (^VIX 2.36%) was up 6.93% to 13.58.

Today's top 3 stocks
Among companies with market caps greater than $100 million, today's oil and gas stocks leader was Quicksilver Resources (NYSE: KWK), up 15.56% to $2.60. After the market close last week, Quicksilver announced that it will sell a 25% stake in its Barnett shale assets to Tokyo Gas for $485 million. The company plans to use the cash to pay down debt, which currently stands at $2 billion. It has $388 million outstanding on a bank credit line, followed by $438 million in bonds due in 2015, with the remaining $1.2 billion due between 2016 and 2019. With so much debt here, I'd pass on this stock.

Second among oil and gas stocks today was Gastar Exploration (NYSEMKT: GST), up 14.20% to $2.01. Today, Gastar announced an agreement with Chesapeake Energy (CHKA.Q) to purchase from Chesapeake land adjoining Gastar's existing Mid-Continent acreage, settle all existing litigation, and repurchase Chesapeake's holdings of Gastar exploration all for $85 million. The land includes 176 producing wells with an estimated present value of $32.4 million.

The repurchase was of 6,781,768 shares of Gastar Exploration for $1.44 per share. To fund the purchase, which has a closing date of June 7, Gastar plans to sell some East Texas assets and issue debt or preferred stock.

And third today was Callon Petroleum (CPE 5.38%), up 3.51% to $3.83 after hitting a 52-week low of $3.62 last week. Callon owns wells both onshore and offshore Texas and Louisiana.

Source: Callon Petroleum Investor Presentation.

Two weeks ago, Callon Petroleum reported earnings and guidance that were below analyst expectations. The company expects to spend more this year on developing its current portfolio and making it more efficient rather than taking on more leases. It plans to undertake its new strategy primarily through an increased focus on horizontal drilling, with 14 horizontal completions expected, compared with just three last year. Analysts have been turning away from the stock, and with it hitting new lows, this could be a good time to take a further look at Callon Petroleum.

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Stocks Mentioned

CBOE S&P 500 Volatility Index Stock Quote
CBOE S&P 500 Volatility Index
^VIX
$29.55 (2.36%) $0.68
Chesapeake Energy Corporation Stock Quote
Chesapeake Energy Corporation
CHKA.Q
Callon Petroleum Company Stock Quote
Callon Petroleum Company
CPE
$46.38 (5.38%) $2.37

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