GMX Resources Up As Analyst Sees Improving Wells

NEW YORK (AP) — Improving productivity and still-untapped potential from a key natural gas region in Texas should significantly boost GMX Resources Inc.'s earnings, an analyst said Friday, upgrading the stock.

Thomas Weisel analyst Michael Scialla upgraded the oil and gas producer to "Overweight" from "Market Weight" and hiked his price target on the stock to $21 from $9.

GMX Resources shares jumped 11 percent, or $1.58, to $16.60 in midday trading. They have traded between $5.57 and $88.35 in the past 12 months.

Scialla said that GMX Resources' stock is among the cheapest of its competitors, even as the Oklahoma City-based company's Haynesville Shale well productivity in East Texas is improving and completed well costs are dropping.

The Haynesville/Bossier Shale is a large natural gas deposit in East Texas and northwest Louisiana.

Further, the company's untapped resources in the region could be worth $39 a share, Scialla said, assuming the company develops half of its prospective acreage over the next eight years and a long-term natural gas price of $7 per 1,000 cubic feet.