Rosetta
Resources has transformed from an Eagle Ford pure play to a liquids firm operating
at Eagle Ford and Permian Basin. The company boasts of strong inventory and has
increasing levels of production which will translate into top and bottom line
growth. My current price target is $82.30 which shows significant upside from
current levels.
Rosetta
Resources (ROSE) is a mid-sized
independent energy firm which is engaged in exploration and development of
onshore unconventional energy resources. The company has been operating at
Eagle Ford in South Texas, but it has now entered the Permian Basin in West
Texas. Rosetta has been one of the leading producers at Eagle Ford Shale, which
is known for its high quality of crude and NGLs.
Rosetta
Resources was formed in mid-2005 by Calpine Corporation (CPN), an independent
wholesale power producer with a market cap of ~$8.6 billion, through a spinoff
of its domestic oil and gas business. Calpine Corporation mainly focuses on its fleet of low-carbon, natural-gas
powered, renewable geo-thermal power plants.
Rosetta's
main producing area is Eagle Ford. Until two years ago, Rosetta was mainly
producing from the Gates Ranch area at Eagle Ford. A year later, in 2012, it
expanded its operations to Karnes Trough, Briscoe Ranch and Central Dimmit. The
company is still looking for more expansion opportunities, particularly in the
liquids-rich areas, and in the previous quarter, it made two significant
acquisitions.
Key
Acquisitions
At the end of
Q1-2013, Rosetta agreed to purchase Comstock Resources' (CRK) 53,306 net acres in
Gaines and Reeves Counties, Texas, for $768 million thus making its entry into
the lucrative Permian Basin. The acquisition was completed on 14th
May and was financed through issuance of 5.625% senior notes and common stock
offering. The area holds reserves of 145 million barrels, of which 67% is oil
and 82% liquids, and currently produces ….. read full article at Seeking Alpha
