America is in the midst of an energy bonanza, and investors that got in early on the boom are sitting pretty right now. But it's not too late: I have three irresistible stocks investors can buy today.
First, a word of caution. These three stocks are smaller and much more volatile than the average energy stock. But the long-term payout is pretty irresistible making them a tempting buy for the investor who wants an exciting energy stock to fuel their portfolio in the decades ahead.
Hunting for value
Magnum Hunter Resources (NYSE: MHR) is a company on the move. The current management team took over in 2009 and has transitioned the company into an emerging shale player. The company has built up scale positions in the Bakken, Marcellus, and Utica shale plays, while at the same time it has been shedding non-core positions in order to focus only on its best assets.
Magnum Hunter believes that it's sitting on a massive resource base that's being undervalued by the market. In fact, management sees its net asset value possibly worth double where shares are currently trading. The company is working to resolve this by proving up much of its undeveloped acreage, especially in the Utica Shale where it just started drilling. If management is right, then Magnum Hunter Resources is one irresistible stock to buy at today's price.
Leading the charge in the Utica
Gulfport Energy (GPOR) is one of the companies leading the development of the liquids rich Utica Shale. The company really is using that play to fuel future growth as evidenced by the fact that 87% of its 2014 budget will be invested in that play. Those funds will fuel an average daily production jump from 12,976 barrels of oil equivalent per day, or BOE/d as of last quarter to a 2014 exit rate of up to 60,000 BOE/d.
Gulfport Energy has found one of the best spots in the Utica Shale. It's producing strong economics, even in the dry gas portion of the play. For investors interested in playing the emergence of the Utica Shale, Gulfport Energy is an irresistible stock to buy because of its dominance of that play.
A soaring future
Halcon Resources (HK) has a slightly different focus than either GulfPort or Magnum Hunter. While it is starting to drill in the Utica, its business is fueled by its positions in the Bakken and Eagle Ford Shale plays. This past quarter the company set records for initial production rates in both plays as it's getting better at drilling wells.
Looking ahead, Halcon Resources expects to grow its production by 40% in 2014, despite spending 20% less in drilling and completion capital. That shows just how efficient the company has become at drilling for oil and gas. Halcon Resources has solid growth prospects and improving returns which make it an irresistible stock to buy for the investors looking for an interesting way to play America's energy boom.
Final thoughts
America's energy boom continues to exceed expectations. It's opening up some simply irresistible opportunities for investors to invest in up-and-coming oil and gas stocks. While these stocks won't be for everyone, it is hard to resist a little speculation in America's future.
Three more ways to play America's energy bonanza
