Heckmann Corporation (HEK): Why Does the Market Hate This Energy Company?

In fact, because of its size and scale, it’s more attractive to customers as it offers a complete system to them across almost all of the basins in which they operate. That’s one reason the company can attract multi-basin customers such as Chesapeake Energy Corporation (NYSE:CHK) and EOG Resources Inc (NYSE:EOG). Chesapeake might be the second largest natural gas producer, but it has acreage in 10 of the core shale plays where it can focus its capital on drilling liquids-rich opportunities. EOG is also spread across many of the best liquids plays, including the Bakken, which is one of the few prime locations that Chesapeake lacks. As Heckmann becomes more deeply embedded into its customers’ operations, it can really clean up as they keep fracking.

My Foolish take
I think Heckmann is a dangerous short. Sure, the financials are a bit tough to decipher thanks to its recent acquisitions, and it has its share of debt, but the long-term growth story is refreshing. Heckmann is one to watch as it continues to solidify its customer relationships through smart acquisitions and builds one of the more intriguing water plays on the market.

The article Why Does the Market Hate This Energy Company? originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool owns shares of Heckmann and has options on Chesapeake Energy and Heckmann.

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