Analysts at Howard Weil have recently raised their target price on small cap oil and gas stock Triangle Petroleum Corporation (NYSEMKT: TPLM) from $11.00 to $12.00 – suggesting a 67.6% upside on this small cap which, like Kodiak Oil & Gas Corp (NYSE: KOG), is focused on the Williston Basin’s Bakken and Three Forks formations. However, should you follow the analyst herd into Triangle Petroleum Corporation?
What is Triangle Petroleum Corporation and Why You Should Like the Stock?
Denver based small cap Triangle Petroleum Corporation is a growth-oriented oil and gas exploration and development company focused solely on the Bakken oil play in the Williston Basin of North Dakota and Montana. The company entered the basin in early 2010 and has acquired approximately 86,000 net acres prospective for the Bakken and Three Forks formations.
In addition, it should be mentioned that Triangle Petroleum Corporation has approximately 475,000 gross acres (413,000 net acres) in the Windsor Block of Nova Scotia. This is a legacy asset considered to be non-core and a potential divestiture given the company's focus on its Williston Basin development program. The company is currently evaluating several strategic options for the Windsor Block.
In early June, Triangle Petroleum Corporation’s shares jumped by around 10% after solidly beating earnings expectations. Specifically, the company reported revenues of $34,294M verses $5,241M for the same period last year along with net income of $5,211M verses a net loss of $3,324M. In the earnings conference call, management noted that:
…every aspect of our business is improving. Production is up, costs are coming down. We're drilling wells faster.
Management expects drilling costs to decline going forward, and there will be a benefit from gas sales that started in June.
Management also reiterated its objective to be the low-cost producer in the Williston Basin and to make money at the lowest possible oil price.
It should be noted that around the time earnings were release, Triangle Petroleum Corporation received the following analysts upgrades or ratings:
- On May 2nd, Canaccord Genuity cut its price target from $10.00 to $9.00 and have a “buy” rating on the stock.
- On May 30th, Global Hunter Securities raised its rating from “accumulate” to a “buy” and gave the stock a $8.50 price target.
- On June 25th, Zacks raised its “underperform” rating to a “neutral” and gave the stock a $6.90 price target.
Finally, Triangle Petroleum Corporation has no trailing P/E according to Yahoo! Finance, a forward P/E of 6.73 and no dividend.
Share Performance: Triangle Petroleum Corporation
On Thursday, small cap Triangle Petroleum Corporation rose 0.70% to $7.20 (TPLM has a 52 week trading range of $4.85 to $7.91 a share) for a market cap of $406.19 million plus the stock is up 27.43% since the start of the year, up 26.8% over the past year and up 24.8% over the past five years. However, small cap Kodiak Oil & Gas Corp looks to have been the better performer on the charts:
Here is a look at the latest technical chart for Triangle Petroleum Corporation as well as Kodiak Oil & Gas Corp:
The Bottom Line. If you missed out on the rise of Kodiak Oil & Gas Corp or are looking for a small cap oil and gas stock for your portfolio, Triangle Petroleum Corporation might be a good bet.