Jagged Peak Energy (JAG) could struggle with weak earnings and may burn cash flows if oil prices stay low. The Permian Basin-focused oil producer, however, has a high-quality asset base and will benefit from double-digit growth in production. Its cash flows will come under pressure but the company has also reduced its capital expenditure and has a solid hedge book which should provide crucial support to its cash flows. Jagged Peak also has ample liquidity and an under-levered balance sheet. It is, therefore, well-positioned to withstand weak oil prices.
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