In the world of oil and gas investing, big names like Exxon Mobil and Chevron are usually what come to mind, as these mega-companies seem to dominate the industry. There are, however, a small subset of companies that have certainly solidified their place in many investors’ portfolios: independent oil and gas. While the market capitalization of these companies may be small, their attractive returns and growth potential warrant a closer look [for more oil and gas news subscribe to our free newsletter].
Two such companies that have piqued investors’ interest are Gastar Exploration (GST) and Resolute Energy Corporation (REN). Though shares of both firms have exhibited significant volatility in recent years, their performances in the trailing one-month period rewarded holders with impressive double-digit returns.
Founded in 1987, Houston-based Gastar Exploration, LTD is an independent company engaged in the exploration, development and production of natural gas, natural gas liquids, condenstate and oil. The firm currently operates 25 wells and is in the early stages of developing and producing high-value NGLs and condensate with its Marcellus Shale play [see Chevron Looks North For New Joint Venture].
Over the trailing four-week period, Gastar’s stock has gained nearly 60% and year-to-date GST is up over 40%.
Colorado Newcomer on the Rise
Resolute Energy was founded as a private company in 2004, and in 2009 the small oil and gas firm became public. Headquartered in Denver, Colorado, Resolute currently has operations in Utah, Texas, New Mexico, North Dakota and Wyoming. As of December 31, 2012, the company had proved reserves of approximately 78.8 million equivalent barrels of oil.
Shares of Resolute have risen more than 20% in the trailing four-week period, and are up nearly 40% year-to-date.
Disclosure: No positions at time of writing.