Shares of oil and gas exploration companies higher after Goldman Sachs report

Sector Wrap: Shares of oil, gas companies climb

COLUMBUS, Ohio — Shares of oil and gas exploration companies EXCO Resources, Bucyrus International Inc. and EOG Resources moved higher Wednesday after Goldman Sachs’ added EXCO and Bucyrus to a list of recommended stocks and upgraded EOG Resources.

Goldman analyst Jerry Revich set an $80 price target on Bucyrus and added it to Goldman’s Americas Conviction Buy list, driven by cost reductions on the $1.3 billion purchase of the mining equipment business at Terex Corp. He also cited a recovery in mining equipment orders.

Revich raised his profit outlook to $4 per share for this year and $5.50 per share next year because of the deal with Terex.

Brian Singer of Goldman said EXCO Resources should have updates on some of its resources plays at a series of meetings that five oil and gas companies are holding for analysts in coming weeks. He said the company has a potential 40 percent upside to its share price.

He also upgraded EOG Resources to “Buy” from “Neutral” on the back of an expected 18 percent increase in production in 2011, new resource play announcements and an attractive stock price.

Goldman lowered the rating on Apache to “Neutral” from “Buy,” saying it now sees more upside potential for other companies. It also removed Ultra Petroleum from its Americas Conviction Buy list, but kept a “Buy” rating on the stock.

Anadarko Petroleum, SandRidge Energy, Forest Oil, EnCana and EOG Resources have analyst meetings scheduled from March 2 through April 7.

Shares of Bucyrus rose $1.20, or 2 percent, to close at $60.68, while EXCO Resources climbed 69 cents, or 3.7 percent, to close at $19.28, and EOG Resources gained $2.77, or 3.1 percent, to close at $92.68.

Apache shares fell 19 cents to close at $102.27 and Ultra Petroleum shares added 30 cents to close $46.05.

Forest Oil shares rose 26 cents to close at $26.33, SandRidge shares picked up 2 cents to close at $8.06, Andarko shares rose 46 cents to close at $69.64 and EnCana shares rose 30 cents to close at $32.26.