17 Jan

Upstream Losers: AREX, EXXI, NOG, SN, and REI

WRITTEN BY Nicholas Chapman

Upstream losers

Having looked at the percentage winners this week (which started on January 15, 2018), let’s now move on to the percentage losers from the US oil and gas production—or upstream—sector.

To compile our list of top upstream losers, we’ve used only oil and gas producers with market caps of greater than $100 million and average trading volumes of greater than 100,000 shares as of last week.

Upstream Losers: AREX, EXXI, NOG, SN, and REI

Top loser: Approach Resources

In the week that started on January 15, 2018, Approach Resources (AREX) fell from $3.91 to $3.62—a drop of ~7.4%. On Tuesday, AREX gapped up by ~1%, but it failed to sustain at a higher level and was sold heavily throughout the day at a higher volume than its 30-day average.

AREX’s current fall appears to be a reaction to the overbought conditions in the stock. AREX has otherwise been in a strong uptrend since November 28, 2017, rising more than 92% from its low to its high.

This uptrend also caused AREX’s 50-day moving average to cross above its 200-day moving average last week—a very positive technical development for AREX, as it indicates that AREX stock could continue with its uptrend. On January 16, AREX was trading at $3.62, whereas its 50-day and 200-day moving averages stood at $2.69 and $2.65, respectively.

On the list of worst performers, Approach Resources is followed by Energy XXI Gulf Coast (EXXI), Northern Oil & Gas (NOG), Sanchez Energy (SN), and Ring Energy (REI). EXXI, NOG, SN, and REI have fallen ~6.9%, ~6.5%, ~5.7%, and ~4.9%, respectively.

On January 9, 2018, Ring Energy announced that its 4Q17 production had increased by ~76% to 422 Mboe (million barrels of oil equivalent) in 4Q17 compared to 240 Mboe in 4Q16. Sequentially, REI’s production has risen ~12% compared to its production of 376 Mboe in 3Q17. Ring Energy has been in a strong uptrend since February 2016, rising more than 273%.

The First Trust Natural Gas ETF (FCG), which represents an index of stocks across the natural gas exploration and production industry, has fallen ~1.5% this week. In comparison, the SPDR S&P 500 ETF (SPY) has fallen ~0.3% this week.

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