In this part of the series, we’ll look at the top percentage gainers from the oil and gas production, or upstream, sector in the United States for the current week beginning October 2, 2017. To compile the list of the top upstream gainers, we used only oil and gas producers with market capitalizations greater than $100.0 million and last week’s average trading volume greater than 100,000 shares.
Denbury Resources gaining momentum
In the week starting October 2, 2017, Denbury Resources (DNR) has risen from its last week’s close of $1.34 to $1.46 on October 3, a significant rise of ~9.0%. It’s interesting that there’s no company news release this week. However, DNR has been in a strong upward trend since August 29, 2017. Since then, it has risen more than 52.0%. The recent uptrend can be attributed to the generally positive sentiment toward oil and gas production stocks due to rising crude oil prices. DNR’s production mix contains ~98.0% crude oil.
On Monday last week, DNR crossed above its 50-day moving average, which it had lost in January 2017. Since then, DNR has made five unsuccessful attempts to regain its 50-day moving average. That’s a positive development for the stock. On October 3, 2017, DNR stock closed at $1.46. Its 50-day and 200-day moving averages were $1.25 and $2.16, respectively.
Moving up: WTI, CRC, PXD, AR
Other upstream stocks making it to the list of top gainers this week are W&T Offshore (WTI), California Resources (CRC), Pioneer Natural Resources (PXD), and Antero Resources (AR). These stocks rose 9.0%, 6.9%, 4.1%, and 3.1%, respectively.
W&T Offshore (WTI) has been rising significantly since mid-August. It has risen almost 77.0% since then. Last week, WTI stock failed to close the week above the $3.50 level, a key resistance level that terminated the previous two rallies in the stock in 1Q16 and 4Q16. If WTI stock closes above $3.50 on a weekly basis, it has a potential to rally further. As of Tuesday, October 3, WTI closed at $3.26.
On September 22, 2017, Antero Resources (AR) announced that in 3Q17 it monetized non-core exploration and production assets worth more than $1.0 billion. The non-core exploration and production assets include the sale of common shares of Antero Midstream for $311.0 million and the monetization of the natural gas hedge portfolio for $750.0 million. Due to this deleveraging program, AR expects its net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) to fall significantly.
These stocks also managed to beat the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which represents an index of stocks across the energy industry. XOP has risen marginally by 0.53% in the current week.
In comparison, the SPDR Dow Jones Industrial Average ETF (DIA) has risen 1.1% in the current week.
Next, we’ll look at the upstream stocks that are trending downward in the current week.