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The Dirt on the Permian Basin: Hot or Not?

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13
Part 12
The Dirt on the Permian Basin: Hot or Not? PART 12 OF 13

Top Permian Player Forecasts: Stock Price Ranges for the Next 7 Days

Implied volatility

On June 23, 2017, Apache (APA), Concho Resources (CXO), Occidental Petroleum (OXY), and Pioneer Natural Resources (PXD) had implied volatilities of ~31%, ~29%, 23%, and 29%, respectively. The stocks in the table below have a majority of their operations in the Permian Basin.

Top Permian Player Forecasts: Stock Price Ranges for the Next 7 Days

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Using implied volatility to forecast stock price ranges

If we take the respective implied volatilities of the above companies and assume a normal distribution of their stock prices with a standard deviation of one (and a probability of 68.2%), APA, OXY, CXO, and PXD stocks will likely close in the ranges of $44.1–$48.06, $58.21–$62.03, $111.8–$121.16, and $149.67–$162.19, respectively, during the next seven days.

Notably, the above companies account for 8% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

In the next and final part of this series, we’ll look at analyst price targets for these companies for the next 12 months.

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