Oil & Gas Stock Roundup: $50 Oil Fuels Massive Gains

Oil & Gas Stock Roundup: $50 Oil Fuels Massive Gains

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Oil spent most of the week above $50 a barrel, though it did close just under that key level

and was barely up for the week. Still, oil around $50 a barrel is great news for

producers because it will fuel much improved cash flows. It's that hope for higher cash flow that fueled another big rally in energy stocks

this week. 

What:

Baytex Energy (NYSE: BTE) rallied 20% this week.

So What: Key driver: Shut-in wells are

being reactivated When oil slumped earlier this

year Baytex turned off the pumps for some of its lowest margin production, which reduced its output by 9%

However, with oil around $50 a barrel these wells are now profitable, enabling Baytex to bring them back online

Now What: According to a report, the

company has now restarted 95% of its idle wells

However, it has yet to resume drilling in the impacted areas even though drilling economics have improved

Key takeaway: Higher oil prices mean much higher cash flow for Baytex Energy

What:

Ocean Rig (NASDAQ: ORIG) surged 25.8% this week.

So What: Key driver: A positive

analyst note An analyst at Evercore

noted that offshore drillers were being shorted by 4.4 times their historical average, which could lead to another big short covering rally

Now What: Ocean Rig was one

company Evercore highlighted as an offshore driller that deserved a valuation differentiation over its peer group

Key takeaway: $50 oil is sending short-sellers to the exit

What:Eclipse Resources (NYSE: ECR) jumped 26% this week.

So What: Key driver: Analyst upgrades Seaport Global Securities

upgraded a half-dozen energy stocks this week, including Eclipse Resources, which was upgraded from neutral to buy

Seaport said it was one of the cheapest Northeast gas names

Now What: Later in the week Johnson

Rice issued its own upgrade, moving it from hold to accumulate

Key takeaway: Investors are jumping on board with analysts, both of which are starting to see a bright future for this gas driller

What:Penn West Petroleum (NYSE: PWE) jumped more than 26% this week.

So What: Key driver: Asset sale

rumors According to a report,

Penn West has received at least four bids for its Viking assets, which it reportedly just put on the market to ease its debt burden

Now What: Further, the company is

reportedly receiving bids in the C$500 million range, which is C$100 million higher than analysts expected these assets to fetch

Key takeaway: Given Penn West Petroleum’s financial troubles, it needs buyers to bid up its Viking assets

What:Emerge Energy Services (NYSE: EMES) doubled this week.

So What: Key driver: Analyst note and

short covering Emerge Energy Services

skyrocketed this week after an analyst from Goldman Sachs said the company could quickly improve its balance sheet by selling its fuels business into a “buyers market”

Now What: Further, the analyst said the

company has significant distribution and unit price upside once it hits peak EBITDA

This fueled buyer enthusiasm, sending short-sellers running to the exits

Key takeaway: The short-thesis appears to no longer be as strong as it once was

This could be the next billion-dollar iSecret