Oil & Gas Stock Roundup: Earnings and M&A Sent These Stocks Soaring

What happened

Crude prices rebounded sharply this week, closing up nearly 9% to just below $50 a barrel. Several factors sparked that rally, including another decline in U.S. oil inventories, pledges by some OPEC members to reduce exports, as well as announcements by several U.S. oil companies that they were trimming their CapExLOL budgets in response to lower oil prices.

Those higher prices drove most oil stocks up. That said, several companies supplemented the oil-inspired rally by releasing strong earnings reports and strategic updates, which added more fuel to their rallies. Leading the way according to data from S&P Market Intelligence, were Teekay (NYSE: TK), Cenovus Energy (NYSE: CVE), Crescent Point Energy (NYSE: CPG), Helix Energy Solutions (NYSE: HLX), and American Midstream Partners (NYSE: AMID).

So what

Shares of marine midstream company Teekay soared nearly 24% this week after entering into a strategic partnership with Brookfield Business Partners (NYSE: BBU) to recapitalize its marine services subsidiary Teekay Offshore Partners (NYSE: TOO). Under the terms of the deal, Brookfield will take a 60% stake in Teekay Offshore Partners for $610 million while acquiring an existing $200 million intercompany loan from Teekay. That deal will eliminate Teekay's financial guarantees to Teekay Offshore, which will improve liquidity and enhance its ability to support its other companies. This comprehensive solution lifted a significant weight that had been holding both companies down.

Canadian oil producer Cenovus Energy rallied more than 15% this week after reporting second-quarter results. Investors were thrilled to see the company blow past the consensus estimate by earning $0.36 per share, which was $0.33 per share above expectations. The company also reported that free cash flow jumped 128% versus the year-ago period thanks to higher oil prices and the impact of its cost cutting initiatives. That excess cash, when combined with a reduction in planned capital spending, gave investors more confidence in the company's ability to digest its recent acquisition of several oil sands and gas assets from ConocoPhillips (NYSE: COP). Further, Cenovus Energy noted that it made good progress on its non-core asset sale plan, which should help ease the debt burden from that deal.

Helix Energy Solutions jumped more than 11% this week after the offshore service company reported solid second-quarter results. While the company's loss of $6.4 million, or $0.04 per share, was $0.01 per share worse than analysts expected, the company provided optimistic guidance. CEO Owen Kratz noted in the earnings release that the company is "encouraged by the rebound this year in the North Sea well intervention market," which should lead to strong vessel utilization into the fourth quarter. That gives investors hope that Helix Energy Solution's results should improve in the coming quarters.

Canadian driller Crescent Point Energy also leaped double-digits this week after reporting an in-line quarter. However, what got investors excited was its production guidance after the company increased its full-year forecast from an average of 172,000 barrels of oil equivalent per day (BOE/d) up to 174,500 BOE/d. One of the drivers is the progression of Crescent Point Energy's Uinta Basin drilling program where it's getting encouraging results, leading the company to target 25% annualized growth from that play over the next five years.

Finally, American Midstream Partners was up about 10% this week after announcing the sale of its propane business for $170 million. That deal will simplify the company and give it cash to redeploy in its core operating areas. In fact, it expects to put all that money to work during the third quarter, which includes the previously announced $32 million acquisition of the Viosca Knoll System in the Gulf of Mexico. Because American Midstream Partners plans to reallocate that capital quickly, it's maintaining its earnings guidance for 2017, though it expects a material increase in 2018 when its growth initiatives should start paying dividends.

Now what

While all five companies reported good news this week, none was as good as Cenovus' update. The Canadian oil producer's stock had gotten hammered this year amid worries that its bold bet on the Canadian oil sands would cause it to implode. However, its results suggest otherwise, which means that there could be even more upside ahead for this stock as long as oil cooperates and it's successful in selling off non-core assets to ease its debt burden.

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Matt DiLallo owns shares of Brookfield Business Partners L.P. Limited Partnership Units and ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.