Energy Prospectus

The Sweet 16 gained 1.5% last week, but it was a wild ride. My Top Picks today are SM, UNT, WLL and DVN.

Oasis Petroleum (OAS) was down for the week as their 2nd quarter production missed the mark because several well completions were pushed into Q3. The company is going to report strong production growth in the next two quarters.

Gulfport Energy (GPOR) is down 11.7% YTD, but they are going to report very strong production growth from Q2 to Q3, so I think it is a great time to buy.

The weather will turn bullish for gas in a couple weeks and I think we will see natural gas prices move over $4.50/mcf by Christmas. RRC and UNT have the most exposure to natural gas.

We will publish an updated profile on Whiting Petroleum (WLL) tomorrow.

Stifel rates GPOR a BUY with a $70 price target.

"We would be buyers of GPOR at current levels since we
believe that the valuation is attractive and, more importantly, that the key
risks/concerns cited in our May downgrade (production growth; well type curves)
have mostly dissipated with the 2Q release last Wednesday. Back in May, well
performance was below type curves, 2Q production was being guided for no
sequential growth, and full year guidance was being reduced. Since then,
sequential growth has resumed, so we see very little risk left to current 2014
guidance (although we do see risk to 2015 consensus numbers, but we believe it is
already discounted in the stock at these levels), new well type curves are
performing better than previous wells, reducing our NAV concerns, and valuation is
much more attractive with the correction in the stock since May. As a result, we
would be buyers of the stock at current levels."