Resolute Energy Initiated At Buy Given 'Impressive' Permian Basin Potential

Rodman & Renshaw analyst Noel Parks initiated coverage on Resolute Energy Corp REN with a Buy rating and $32 price target.

The bullish rating is based on a risked Net Asset Value (NAV) and optimism regarding Permian Basin wells, specifically in the Delaware Basin, said Parks.

Resolute’s latest five wells in the Delaware Basin, which is part of the larger Permian Basin in West Texas, are expected to boost the company’s proved reserves by 44 percent over end-of-year 2015, according to the analyst.

Related Link: OPEC Deal Indicates Saudi Arabia Is Abandoning Market Share Strategy

“The five wells brought online this year are expected to add 14.5 million barrels of oil equivalent (mmboe) of net proved reserves, including proved undeveloped (PUD) locations,” said Parks.

Moreover, Parks stated the company might drill an additional 21 wells in 2017.

At the time of writing, Resolute shares were trading up over 16 percent at $30.00 on news of a $135 million acquisition agreement with Firewheel Energy, LLC for 3,293 acres in the Delaware Basin.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!