Drill Capital, an alternative asset manager focused on investments in the North American energy sector, put out a press release today announcing the official launch of Drill Research, their new analytical division. This new research platform is designed to inform Drill Capital’s private and public investments in the O&G sector. Drill Research has also released a 2014 model portfolio including its top pick, Antero Resources Corp (NYSE:AR). Interested parties may download the Drill Report #1 at drillcap.
Drill Capital: North American energy sector overview
Drill Capital is generally positive on the O&G sector in the U.S., and is projecting increased capital investment and continued growth in the sector in 2014. That said, they also believe careful stock selection will be the best way to maximize investment return in the oil and gas sector in the coming year. “Our view is that public market investing will continue to be a stock picker*s environment with a bias towards exploration and production (“E&P”) companies that can grow on a debt adjusted basis and that are positioned in the highest return regions”
Utica and Duverney shale plays
Drill Research’s inaugural report also highlights the Utica and Duverney shale fields. The report suggests investments in selected companies involved in these projects are likely to be profitable as both the Utica shale fields in the northeast U.S. and the Duverney shale fields in Alberta, Canada are further developed and production is ramped up.
Warren Buffett: If You Own A Good Business, Keep It
Buying private businesses is easier than acquiring public firms, and investors should avoid selling good investments at all costs, according to the Oracle of Omaha, Warren Buffett. Q2 2020 hedge fund letters, conferences and more In an interview with CNBC in March 2013, Buffett was asked if he was looking at any businesses, in particular, Read More
Antero Resources is top pick for 2014
Drill Research made Antero Resources Corp (NYSE:AR) their top pick for 2014. “We believe that on the public side Antero Resources Corp (NYSE:AR) screens as a top tier company that will provide the best leverage in the E&P sector.”
In recommending the stock, the report points to the fact that Antero Resources Corp (NYSE:AR) has a strong asset base in both the Marcellus and Utica fields, and the company’s high operating margins and low cost structure. Antero’s midstream assets are also undervalued, and could be worth more than twice the $1.7 billion they are currently valued at. Finally, the report highlights Antero’s strong management team, and points to their “proven track record of execution in the oil and gas industry.”
Full report on stock below.