While factors such as rising production and slow global economic growth could conspire to make energy production a risky business in 2013, a number of well-poised companies are likely to record upside in the short to medium term.
Looking back on 2012, it is difficult to pinpoint the oil and gas sector's biggest story. Political debates over pipeline accessibility, unprecedented growth in US energy production and a market coming to grips with stagnant economic growth were three of the main factors leading the often-volatile market. Although last year turned out to be less than stellar for most resource companies, a number of oil- and gas-focused juniors managed to record some notable gains. While factors such as rising production and slow global economic growth could conspire to make energy production a risky business in 2013, a number of well-poised companies are likely to record upside in the short to medium term. Here's a look at three energy-focused juniors that are set to prosper in 2013: WesternZagros Resources (TSXV:WZR) is an international natural resources company engaged in acquiring properties and exploring for, developing and producing crude oil and natural gas. It holds two production-sharing contracts with the Kurdistan Regional Government in the Kurdistan region of Iraq, and its asset base is one of the largest exploration areas in the region. Audited prospective resource estimates on its exploration blocks total 3.3 billion barrels of oil, or 5 billion barrels of oil, gas and condensate (recoverable). More than eight years after entering Iraq, WesternZagros' once-controversial bet on Kurdistan seems to be paying off. Major oil companies, which previously shunned the region, are now moving in, while a proposed pipeline to transport oil directly to Turkey — bypassing the questionable political set up in Southern Iraq — could soon become a reality. While the influx of majors suggests a takeover opportunity, Simon Hatfield, the company's CEO, recently told Canadian Business that WesternZagros is not yet ready to sell.