Energen, a natural oil and gas exploration and production company based in Birmingham, AL, recently announced that it had entered into agreements to sell its non-core operations in the Delaware and San Juan Basins for $551.7 million, 38% over Barclays' forecast of $400 million. The deals have given Barclays more confidence in the company.
"Considering the company's balance sheet strength and its streamlined asset base, we think EGN is well positioned to add scale and efficiency through consolidation in the Permian Basin," the firm noted.
Barclays also sees these moves as an indication that the company will refocus on the remaining unfinished wells in the Delaware area. "Assuming oil prices remain constructive, we expect EGN to draw down its Delaware Basin drilled but uncompleted well inventory in 1H17," the firm added.
The increase comes after other firms like Credit Suisse raised their own target prices based on the same factors.
Separately, TheStreet Ratings rates this stock as a "sell" with a ratings score of D. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
You can view the full analysis from the report here: EGN