Small and nimble, wildcat E&P firms serve as some of the main providers of new supplies. These companies find new deposits and bring them into production, often on a shoestring budget. Major producers see these junior corporations as a way to add to their overall reserves and often will partner with or buy out these mid-tier producers. And for investors, these junior E&P firms might provide a portfolio boost. After all, it only takes one gusher to turn a small company into a superstar and send its stock rising.
However, the bulk of the ETF’s holdings — such as Rosetta Resources (NASDAQ:ROSE), EXCO Resources (NYSE:XCO) and Gran Tierra Energy (NYSE:GTE) — still can be had for a song relative to their future prospects and read like a who’s who of buyout targets and upcoming players.