Global Hunter Securities initiated coverage on Clayton Williams Energy (Nasdaq:CWEI), and started them off with a "Buy" rating, citing shift to resource plays.
"In 2009, Clayton Williams Energy began to shift its focus away from exploration and more toward resource plays with lower-risk repeatability. In addition, the company has focused more of its capital spending on oilier plays. These shifts are just beginning to have an impact on the company’s production, with sequential oil production growth in each of the past three quarters, and sequential declines in gas production, overall production has been flat. With oil output accelerating substantially in the back half of 2010 (and beyond), we should see total production up sequentially in 3Q10, with positive year-over-year comparisons setting in firmly by 2Q11," Global said.
Clayton surged on Wednesday, closing at $53.22, gaining $2.55, or 5.03 percent. Global has a price target of $99 on them.
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