Why American Midstream Partners, TETRA Technologies, and Magnum Hunter
Resources Exploded Higher This Week
It's amazing what a little bit of news will do to badly beaten down
energy stocks. We saw that this week as several energy stocks
exploded higher on good news. Leading the charge, according to
S&P Capital IQ data, were American Midstream Partners, TETRA
Technologies, and Magnum Hunter Resources.
Here’s a look at the news that moved these stocks.
Photo credit: TaxCredits.net
What:Shale gas producer Magnum Hunter Resources (NYSE: MHR) stock jumped more
than 28% this week.
So What: Key driver: Magnum
Hunter Resources agreed to a joint venture agreement with a private equity fund
$430 million farm-out agreement for 9,500 acres in the Utica Shale
Now What: Company will receive a small
cash injection, while the PE fund will fund the drilling of up to $400 million worth of wells
Once the PE fund earns a 12% IRR, wells are returned back to Magnum Hunter
Key takeaway: Company gets a cash injection and future production in return for currently undeveloped acreage
What:Chemical maker TETRA Technologies (NYSE: TTI) leapt more than 44% this
week.
So What: Key driver: TETRA crushed
earnings estimates Revenue: $316.3 million
(beats by $47.3 million) EPS: $0.16 per share
(beats by $0.15 per share)
Now What: Margins were really strong
due to cost cutting initiatives Company also issued better-
than-expected third-quarter guidance (EPS of $0.07-$0.09 per share vs. consensus of $0.02 per share)
Key takeaway: Investors love the strong quarter and better guidance
What:MLP American Midstream Partners (NYSE: AMID) rocketed nearly 50% this
week.
So What: Key driver: American
Midstream and its general partner announced a drop-down transaction
Company will pay $162 million to acquire a 25% stake in Delta House, which is a Gulf of Mexico midstream system
Now What: Transaction provides a clear
path to distribution growth Deal was lauded by
analysts, with one upgrading the company
Key takeaway: Clear visibility to future growth is seen as a solid reason to buy
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