Energy Stocks Rally Sharply This Week

Market rumors that OPEC and non-members might finally be willing to coordinate an oil production cut sent crude oil higher this week. That sparked a rally in energy with

five of the top movers, according to S&P Capital IQ data, being EP Energy (NYSE: EPE), Enerplus (NYSE: ERF), Gaslog

Partners (NYSE: GLOP), Pengrowth Energy (NYSE: PGH), and American Midstream Partners (NYSE: AMID).

What:EP Energy (NYSE: EPE) rebounded nearly 17% this week.

So What: Key driver: The oil price

rally Oil is moving closer to the

company’s $36 per barrel break-even point on new wells in the Eagle Ford and Altamont

Now What: That said, the company’s

Wolfcamp acreage is farther away from profitability given its $41 per barrel break-even point

Key takeaway: Investors like the fact that oil is moving closer to the company’s break-even points

What:

Enerplus (NYSE: ERF) popped 19% this week.

So What: Key driver: The oil price

rally Enerplus expects that its

production will decline in 2016 from 106,000 BOE/d to a range of 100,000-105,000 BOE/d

Now What: That said, the company

needs oil at $50 to pay for the capex needed to deliver that production

Key takeaway: Investors are hoping that the current oil price rally continues so that Enerplus can generate enough cash flow maintain its production

What:Gaslog Partners (NYSE: GLOP) surged more than 26% this week.

So What: Key driver: Fourth-quarter

earnings Gaslog reported its highest

ever quarterly performance for revenue, profit, and distributable cash flow

The company also increased its distribution by 10%

Now What: Even with that distribution

increase, the company’s distribution coverage ratio was a very robust 1.43 times

Key takeaway: Gaslog is one of the few MLPs that is in a position to grow its distribution, which is something investors are cheering

What:Pengrowth Energy (NYSE: PGH) jumped 33% this week.

So What: Key driver: The oil price

rally Right now Pengrowth’s

primary goal is to survive the downturn

It recently suspended its dividend and slashed its capex to run at a $30 oil price in 2016

Now What: The company has now

reduced capex spending from $904 million in 2014 to just $60-$70 million in 2016

Key takeaway: Pengrowth has put itself in a position to survive at $30 oil, with anything over that price being a plus

What:American Midstream Partners (NYSE: AMID) jumped more than 42% this week.

So What: Key driver: Holding the

line on its distribution American Midstream

Partners announced that it will maintain its current distribution at $0.4725 per quarter

Now What: Analysts thought that American

Midstream would need to cut its payout due to its higher leverage, tight distribution coverage ratio, and growth capital requirements

Key takeaway: Investors are starting to buy into the company’s ability to maintain its distribution, especially with crude oil heading higher

This could be the next billion-dollar iSecret