NEW YORK, September 19, 2016 /PRNewswire/ --
Bank of America and Merrill Lynch are very optimistic that oil prices will soon reach a bottom and begin to head towards a bullish move up through June 2017 due to equities branching out, increase in demand, and decrease in production of oil. As noted by the US equity and quantitative strategist at Bank of America Merrill Lynch, Savita Subramanian, said the bank upgraded its rating performance of energy sector from "Market weight" to "Overweight" and that it will outperform the S&P 500. International Western Petroleum, Inc. (OTCQB: INWP), Exxon Mobil Corporation (NYSE: XOM), , Approach Resources Inc. (NASDAQ: AREX), Range Resources Corp. (NYSE: RRC), Marathon Oil Corporation (NYSE: MRO).
What's charming investors back into the energy sector is the decline in capital spending. Subramanian forecasts that West Texas Intermediate oil futures will rally to $54 a barrel (+17%) by the end of the year, and as much as $69 a barrel (+49%) by June of next year.
Texas-based E&P company, International Western Petroleum, Inc. (OTCQB: INWP) has completed an acquisition of an oil producing field in Kilgore, Texas in the heart of the famous Woodbine formation. The deal was made through a joint venture with Marshall Walden, partnering with Odyssey Enterprises, LLC.
The acquisition involves 8 wellbores. Currently, 4 of them are producing, and the other 4 are inactive. All 8 wellbores are to be active in the near future in order to increase the levels of production. The Woodbine Sand formation exists 120 miles east of downtown Dallas in the heart of East Texas. In that area, the Woodbine Sand is typically found at a depth of approximately 6,000 feet and is frequently oil bearing in East Texas.
International Western Petroleum, Inc. (INWP) CEO Ross Ramsey stated, "This is an acquisition that now puts a solid foundation in place for International Western Petroleum in the East Texas region. This area has wellbores that have been producing since the late 1920s. I am honored to have Odyssey teamed up with us for acquisition opportunities with such a deep route of Texas oil history,"
The world's largest publicly traded international oil and gas company, Exxon Mobil Corporation (NYSE: XOM) had recently pulled out of its multi-billion dollar Liquefied Natural Gas Alaska project and refused to continue working on the next phase of the Liquefied Natural Gas terminal. Exxon believes that it's "one of the least competitive" projects worldwide and has close to no economic logic at current Crude oil and Liquefied Natural Gas prices.
Small cap companies such as Approach Resources Inc. (NASDAQ: AREX) has ascended from their 52 week lows in February at $0.60, all the way to this year's high of $4.35 in September. This rebound was a massive 524% increase in a short matter of time.
In Addition, small cap companies are the ones that generally get hit first and are the first to rally back up stronger. Much bigger companies have made volatile moves as well, but on a much smaller percentage scale. Shares of companies such as Range Resources Corp. (NYSE: RRC) have continued to rally since late February, and Marathon Oil Corporation (NYSE: MRO) increased by 10% since August.
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