Petrohawk Energy has an eye on increased production

Analysts really like Petrohawk's better-than-expected production and lower costs. Further, analysts see Petrohawk's Haynesville Shale zone in Arkansas as a major driver of increased production, revenue, and share price in the immediate years ahead.

The above is in addition to established development programs in the Elm Grove and Terryville fields in North Louisiana, at Fayetteville, Arkansas, and at other locations. The Reuters FY 2008/FY 2009 EPS consensus estimates for HK are 88 cents to $1.08.

The risks? A sustained, substantial decline in natural gas/oil prices would (obviously) hurt Petrohawk's results. Analysts are also keeping an eye on HK's skilled labor costs.

The First Call mean rating for HK is: Buy [17 firms]. Mean 2008 target: $35 [high: $54, low: $27].

Stock Analysis: Petrohawk Energy is a moderate-risk stock not suitable for low-risk investors. Note: More-cautious investors may wish to wait until Petrohawk pulls back to $28-$31, but keep in mind that HK may not retreat to that level. Investors with an investment horizon longer than 2 years should be rewarded from HK shares. Sell/Stop Loss if you were to purchase shares in this company: $18.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.