What Caused Atlas and Frontline to Pop
Apologies to Ayn Rand, but Atlas isn't shrugging today. In fact, it's popping. Shares of Atlas Energy (NYS: ATLS) are up 20%, and its subsidiary Atlas Resource Partners (NYS: ARP) has soared 35% after announcing a big shale gas pickup.
For $190 million, Atlas Resource purchased acres totaling 277 bcfe of natural gas in the prolific Barnett shale region from Carrizo Oil & Gas (NAS: CRZO) . Carrizo is also up 2%, likely because this shows the company's commitment to shift its production mix toward liquids production, and the money raised from this asset sale can help develop those properties. Meanwhile, Atlas gains entry into the Barnett with producing assets and the possibility of future development in a deal that immediately adds value to the bottom line.
This is a true win-win for the two companies.
Another big energy mover is Frontline (NYS: FRO) , which is up 20% after a report that demand for oil tankers is rebounding. Despite some concerns over the Chinese economy, shipments of oil to china have picked up dramatically. Frontline's CEO noted, "It looks very positive right now." With oil (INDEX: ^CL) prices staying firmly above $100 a barrel and a strengthening global economy poised to push them even higher into the summer months, perhaps this is more than just a temporary blip for the sector.
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