Friday, August 22, 2014

Seeking Alpha: Abraxas Petroleum Running All-Out

Although the EPX Index has had a so-so run since late December of 2013 (up around 6%), plenty of individual plays have outperformed, but few have done so to the same extent as Abraxas Petroleum (NASDAQ:AXAS). Back in late December, I thought Abraxas was a good candidate to pick up if it traded down closer to $3, which it did within the next month or so, but I didn't think that it was going to shoot through $4.50, $5, and eventually $6. Granted, a lot happened between then and now to help the shares along the way and management has been active in selling non-core assets and picking up new acreage to enhance value.

The acreage Abraxas holds in the Williston Basin (the Bakken) is pretty mature, but there is quite a bit of growth potential via the drill bit in the Eagle Ford acreage, not to mention the possibility that the company will continue to acquire when and where it can. Strong production growth and a pretty clean balance sheet support a fair value range around $6 to $7 per share and I wouldn't underestimate management's ability to execute more value-creating transactions.

Read more here:
Abraxas Petroleum Running All-Out

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