Hedge funds have been snapping up shares of QEP Resources Inc. (NYSE:QEP) after the company reported second quarter earnings that beat expectations and announced plans for a major acquisition in the Permian Basin. Hedge fund, Integrated Core Strategies, has increased its stake in the company buoyed by its growth prospects.
Institutional Investors Holdings
Regulatory filings indicate that Integrated Core Strategies owns 11.61 million shares of QEP Resources, representing a 4.8% stake. Their current position includes a recent 4.5% share purchase the hedge fund bought a few weeks back.
BlackRock Inc. leads the pack with a holding of 20.2 million shares in QEP Resources with Vanguard Group coming a close second with a total of $20.1 million shares followed by Wellington Management Group with 13.2 million shares owned.
QEP Growth Prospects
Integrated Core Strategies move to strengthen its position in QEP Resources comes at a time when the company has rolled out a strategy that it says will fuel the next phase of growth. The independent crude and natural gas exploration company has reached an agreement for the acquisition of oil and gas properties in the Midland basin.
QEP Resources will pay $732 million to acquire the oil and gas assets from oil companies JM Cox Resources and Alpine Oil Co all of which are associated with Kelly Cox. According to analysts, the company paid a premium for the assets. QEP Resources paid $51,000 per acre compared to an average price of $40,000 per acre for recent deals in the area.
Q2 Earnings
Solid Q2 earnings have caught the eye of institutional investors after the company’s second quarter earnings report showed net income grew to $45.4 million from a net loss of $197 million the same time last year. During the quarter, the company made significant progress on the drilling front resulting in record net equivalent of 21.2 Mboed.
The company has since announced plans to add $100 million to its capital expenditure budget in a bid to add two drilling rigs before the end of the year.
