EOG Resources shares up as analyst upgrades stock

Shares of EOG Resources Inc. jumped Wednesday, as an analyst upgraded the oil and natural gas company's stock on expectations that it will climb in tandem with oil prices.

EOG shares rose $2.30, or 2.8 percent, to close at $85.30, having climbed as high as $87.15 earlier in the session.

Deutsche Bank analyst Shannon Nome raised her rating on the stock to "Buy" from "Hold" and boosted her price target to $110 from $78.

Nome cited a recent Deutsche Bank report that predicts crude oil prices will climb as high as $175 per barrel until about 2016. She believes EOG's unique focus on horizontal oil drilling will boost growth and attract wider investor interest into 2010.

"Over the past three years, EOG has been quietly building a stronghold of unconventional oil acreage throughout the U.S., capitalizing on the competition's lack of capital and a general disinterest in oil projects, given conventional wisdom that crude oil is difficult if not impossible to produce from shale rock," said Nome.

Nome sees challenges ahead, but noted that EOG is known to have large-scale reserves in these plays, and is positioned benefit significantly from these projects.