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Independent oil producers see stocks rebound in Q4 after enduring horrific 2020

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Independent oil producers see stocks rebound in Q4 after enduring horrific 2020

2020 was a difficult year for stocks of independent oil producers, but a surprising recovery during the fourth quarter allowed most producers to regain some of the losses incurred earlier in the year.

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Like the rest of the industry, no Permian Basin-focused independent would consider 2020 to be a good one for their stocks, but Pioneer Natural Resources Co. suffered less than most of its competitors. The company saw its share price decline by approximately 26.7% from Dec. 30, 2019 to Dec. 29, a drop from $150.87 to $110.64. Pioneer's stock bottomed out at $56.77 per share on March 18, but started a slow recovery since. The company's October announcement that it planned to acquire Parsley Energy Inc. in a $7.6 billion, all-stock deal appeared to push Pioneer shares down slightly for a short time, but shares moved back above $100 on Nov. 23 and have stayed above since.

Concho Resources Inc. had the benefit of finding a buyer during the fourth quarter, with ConocoPhillips announcing in mid-October it would acquire the Midland, Texas-based independent for more than $13 billion. That agreement, along with West Texas Intermediate crude oil prices pushing above $40 per barrel in November, allowed the company to regain some of its losses from earlier in the year. Still, Concho's stock on the New York Stock Exchange stood at $56.89 per share at the Dec. 29 close, down more than one-third from its levels earlier this year.

Concho's shares peaked on Jan. 7, when they closed at $93.11. On March 18 — a bloody day for oil and gas stocks — shares closed at $36.00. Concho's stock pushed back above $70 per share for a short time in June before sliding back, but reached as high as $64.53 per share as recently as Nov. 24.

Another Midland, Texas-based independent, Diamondback Energy Inc., saw its stock lose nearly half its value in 2020 — and that is a great improvement over where things stood at the end of the first quarter. Diamondback shares on the NASDAQ peaked at $96.42 on Jan. 7 before starting a steady decline. That decline became a full-scale rout as oil prices collapsed in March, with Diamondback shares falling to $15.56 on March 18. Helped by improved commodity prices in November, Diamondback's stock rebounded to close at $47.00 per share on Dec. 29.

Apache Corp. has turned away from the Permian in favor of its new oil finds off the coast of Suriname, but Apache's stock suffered the same fate as its counterparts. After a sizable jump in price at the start of the year thanks in part to its Suriname operations, Apache's stock on the NASDAQ closed Jan. 14 at $33.59 per share. Then the bottom fell out, with shares falling to $4.02 by April 1. The company share price recovered more than $10 by Dec. 29, closing at $14.15, but that still constituted an overall loss of more than 44% of its value year on year.

EOG Resources Inc., which has long boasted of being an investment-grade independent, had the value of its shares drop by nearly 41% from the end of December 2019 to Dec. 29, 2020. The company has stayed on the sidelines during the current M&A spree and has preached both efficiency and fiscal discipline, but that has not been enough to convince investors. EOG shares hit their 2020 peak on Jan. 7, when they reached $89.29, but had lost nearly $60 per share by March 18. Shares regained nearly $20 by Dec. 29, closing at $48.67 on the NYSE on Dec. 29.

One independent lost more than half its share value over the course of the year and has seen a limited rebound: Occidental Petroleum Corp., which has seen its stock fall nearly 58% over the past 52 weeks. Plagued by debt issues and the inability to find buyers for its assets in a weak market, Occidental's shares on the NYSE topped out at $47.26 on Jan. 15, then fell to $9.69 by March 23. The company has seen a very tepid recovery, reaching $17.24 at the close of the markets Dec. 29.