Analysts expect the company to lose more in 2014 than 2013 as the strategic direction unveiled last month takes effect. At the time, SandRidge Energy Inc. (NYSE:SD) announced a 33% reduction in capital expenditures from 2012 levels to only $1.45 billion. The company operated 38 rigs during Q1 to drill 179 wells, but the new plans call for a reduction to 25 rigs and a total of 425 horizontal wells drilled for all of 2013.
Investors will be interested to see whether the new management team shifts the strategy yet again or if these plans were what forced Tom Ward out. Another shift in strategy would undoubtedly shake off investors yet again.
Ignored spin-off
WPX Energy Inc (NYSE:WPX) was spun-off from Williams Companies, Inc. (NYSE:WMB) over a year ago, but the stock has gone absolutely know where during that time period though it has technically gained over 30% in the last 12 months. The previously natural gas focused stock has struggled as an independent while attempting to shift towards oil production. Similar to Halcon Resources Corp (NYSE:HK), the stock hasn’t had an opportunity to become established due to the weakness in the markets.
The company has hit several successful wells in the Niobrara Shale that could propel it to significant production gains. WPX Energy Inc (NYSE:WPX) recently increased the drilling rig count to seven in the Piceance Basin where it is surprisingly pushing to increase natural gas production. The stock trades at roughly 1 times sales and could see significant gains if the economy was to improve and send natural gas prices higher.
Though the stock has gained 30% in the last year, it has done relatively little since the spin-off while investors expect higher returns from energy firms than matching the gains of the S&P 500.
Bottom line
As the market over reacts to the signals by the Fed that it will eventually need to reduce the aggressive bond buying program, investors should look to shift into these energy stocks. Investors need to remember that even with reduced bond buying, the Fed is far from increasing the Fed funds rate from historical lows. The stocks of Halcon Resources Corp (NYSE:HK), SandRidge Energy Inc. (NYSE:SD), and WPX Energy Inc (NYSE:WPX) all have new corporate structures that have occurred in the recent downturn for E&P firms. WPX Energy Inc (NYSE:WPX) offers the best valuation while Halcon Resources Corp (NYSE:HK) has the potential to be a big winner if Floyd Wilson can create another star stock. SandRidge Energy Inc. (NYSE:SD) provides possibly the biggest risk and return as a completely new management team can be very unpredictable, yet the company has a set of attractive assets. Either way, investors should look to scooping up one of these energy stocks on the next taper tantrum.
The article 3 Energy Producers to Buy on the Next Taper Tantrum originally appeared on Fool.com and is written by Mark Holder.
Mark Holder and Stone Fox Capital Advisors, LLC have no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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