Saturday, June 25, 2022

Eclipse Resources Corp (NYSE:ECR) Continues to Grind

Eclipse Resources Corp (NYSE:ECR) is trending on the back of the recent OPEC production cut scheduled for the first six months of 2017, investors are once more piling into the energy markets, attracted by the potential for higher oil prices to lift the fortunes of all companies in the sector. That could be a unique buying opportunity for Eclipse Resources Corp. (NYSE:ECR), an independent exploration and production company engaged in the acquisition and development of oil and natural gas properties in the Appalachian Basin.

Shares of Pennsylvania-based Eclipse Resources Corp. are currently trading at $2.86, giving the company a total market cap of $753.63 million. Over the most recent 52-week period, shares of ECR have traded as low as $0.65 and as high as $4.42. The current trading range for the stock is $2.82 to $3.02. YTD, shares of ECR are up 59.89% (as of the end of trading on December 19). Institutional investors own 96% of the outstanding shares.

Eclipse Resources Corp (NYSE:ECR) operates oil and gas properties consisting of 221,700 net acres in Eastern Ohio, including the Utica Core Area and the Marcellus Project Area. In addition, the company has identified approximately 2,450 gross (594 net) remaining horizontal drilling locations across its acreage, including 450 locations in the Utica area and 140 locations in the Marcellus area.

The company has 210 total employees.

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As of December 2, analyst opinion on ECR was mostly mixed. The average recommendation was a “hold,” with 1 “overweight” recommendation, 13 “hold” recommendations, and 4 “buy” recommendations. Most recently, Zacks Investment Research downgraded its recommendation on ECR from “Hold” to a “Sell” on Oct. 21. The consensus price target for the stock, based on these analyst recommendations, is $3.84.

In terms of earnings performance, ECR will next report earnings in early March 2017. On November 3, the company missed analyst expectations. The earnings per share were negative $0.10, missing by $0.05. Total earnings were $54.50 million, while analysts expected earnings of $57.81 million.

Going forward, investors will keep a close eye on the company’s shale exploration activities in the Appalachian Basin, which had been suffering from low global energy prices. With prices once more on the upswing, though, those production areas could get a boost.

Moreover, the company has a number of strengths that are attractive for investors. In 2015, net production was up 186% from 2014. As of December 31, 2015 the company had liquidity of $281 million. And the company has a proven management team with experience in both Utica and the Appalachian Basin. Since most of the company’s remaining drilling areas are located in the Utica Core Area, this is important experience to have.

The big question going forward is how much further the stock of ECR can go in 2017. This past year has been a good one in terms of stock performance, with ECR up nearly 60% YTD. But the consensus analyst price target for the stock is only $3.84, which is not too far off from the current share price of $2.86.

What could push the stock higher, though, is a re-evaluation of what will happen to the energy market in 2017, especially with the OPEC production cut. Investors may have already started to price in the effects of this production cut, but if OPEC is able to renew this production cut for another 6 months, that might give investors the courage to boost their exposure to energy stocks. If that happens, one of the beneficiaries could be Eclipse Resources Corp. For more news on Eclipse Resources Corp. (NYSE:ECR) and other fast-moving penny stocks, please subscribe to now.

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