Energy - Oil & Gas. Crude Thoughts for a New Year. Summary. Industry Rating: Senior Oil & Gas Market Perform Small/Mid Oil & Gas Market Perform
|
|
- Jewel Grant
- 6 years ago
- Views:
Transcription
1 Industry Rating: Senior Oil & Gas Market Perform Small/Mid Oil & Gas Market Perform Crude Thoughts for a New Year Crude oil prices were relatively stable in 2013 with Brent crude oil prices averaging roughly $109/bbl while West Texas Intermediate (WTI) prices were somewhat more volatile due to the mismatch in U.S. supply growth and pipeline expansions, averaging roughly $98/bbl. For natural gas enthusiasts, 2013 was a much better year than 2012 but prices still fell short of prior years as the Marcellus juggernaut continued to push more gas into the North American market. As we think about 2014, many fundamental factors argue for lower crude oil prices, which is largely what the forward markets are predicting: U.S. supply is continuing to grow, the global economy is still expanding relatively slowly and the U.S. Fed will be winding down its bond buying program. On the other hand, Libyan and Iranian production largely remains off the market. If this continues, we expect crude oil prices to remain where they are; if Libyan production returns to historical levels and there are no offsetting losses elsewhere, we would expect crude oil prices to trade roughly $10/bbl lower. We are forecasting Brent prices of $105/bbl in 2014 and a WTI price of $94/bbl. On the natural gas front, we believe that 2014 will look very similar to 2013; cold weather will support prices through the winter but then prices will ease back with growing Marcellus production. This will also sustain wider basis spreads between Henry Hub and AECO. We are forecasting a Henry Hub price of $3.85/Mcf in 2014 and an AECO price of $3.07/Mcf. In our 2013 outlook we recommended that investors slightly underweight North American oil and gas equities but favour U.S. over Canadian oil and gas equities. For 2014, we are recommending a more balanced positioning and see opportunity for a relative re-rating of Canadian oil-weighted equities. We are also growing more constructive on the overall group and recommend that investors increase exposure to market weight. We believe that the global economy is more stable than it was 12 months ago and that the U.S. Fed s decision to begin tapering its bond purchasing program is a positive signal that could lead to a flatter oil futures curve or perhaps even one that shifts into contango. This would present a more compelling investment backdrop for oil and gas equities, especially Canadian oil sands companies. January 6, 2014 Research Comment Calgary, Alberta Randy Ollenberger (403) BMO Nesbitt Burns Inc. (Canada) Jim Byrne, P.Eng., CFA (403) BMO Nesbitt Burns Inc. (Canada) Dan McSpirit (303) BMO Capital Markets Corp. (U.S.) Gordon Tait, CFA (403) BMO Nesbitt Burns Inc. (Canada) Phillip Jungwirth, CFA (303) BMO Capital Markets Corp. (U.S.) Jared Dziuba, CFA (403) BMO Nesbitt Burns Inc. (Canada) Summary We expect Brent crude oil prices to continue trading in a $ /bbl range and that location discounts will remain relatively wide due to growing inland production. West Texas Intermediate prices are projected to generally trade in a $90 100/bbl range. For natural gas, we think 2014 will largely be a replay of 2013 with Henry Hub prices trading in a $ /Mcf range. We think 2014 looks slightly more favourable than 2013 for oil and gas stocks. The global economy is in better shape than it was 12 months ago, which should translate to fundamental support for crude oil prices. We recommend that investors move to a market weight or slightly overweight exposure to oil and gas equities. We believe that Canadian oil and gas equities could be positively re-rated relative to U.S. equities if the forward curve for oil begins to flatten. Our top three oil and gas investment recommendations are Cimarex Energy, MEG Energy and Ranging River. Please see our in depth 2014 outlook report for full details regarding our investment themes and commodity price outlook. This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 19 to 20.
2 2014 Outlook Crude oil prices were remarkably stable in 2013 given the uncertain economic backdrop. Brent crude oil prices averaged approximately $109/bbl in 2013 and have averaged roughly $110/bbl over the last three years with relatively small variations around the average. West Texas Intermediate (WTI) prices have been somewhat more volatile due to the mismatch between growing production and transportation infrastructure but have averaged a relatively steady $96/bbl over the last three years including $98/bbl in Widening location and quality differentials were a prominent theme in 2013 as transportation bottlenecks resulted in oil-on-oil competition in various inland markets due to growing crude oil production (Bakken, Permian, Eagle Ford, Western Canada). North American natural gas prices traded in a wider range than crude oil prices in Henry Hub prices started the year on a strong note as colder weather arrived and ended the year driven by the same influence. However, much like crude oil, growing inland production (Marcellus) resulted in wider location differentials over the course of the year. To us the outlook for 2014 looks better than it did for One year ago the global economic outlook was clouded by the seemingly never ending debt crisis in Europe, slower growth in China and self-inflicted, politically motivated turmoil in the United States. One year later Europe seems to be regaining its feet, China appears to be recovering and despite the best efforts of U.S. politicians the U.S. economy appears poised to deliver stronger economic growth. This is a much better backdrop for crude oil prices. We expect Brent crude oil prices to continue trading in a $ /bbl range and that location discounts will remain relatively wide due to growing inland production. For natural gas, we think 2014 will largely be a replay of 2013 with Henry Hub prices trading in a $ /Mcf range. We are recommending that investors modestly increase exposure to oil and gas equities in While we expect commodity prices to trade relatively flat with 2013, the economic backdrop appears to be improving and that should lead investors to begin discounting additional future opportunities into company valuations. We are maintaining our Market Perform ratings for the Large and Small Cap Oil & Gas Producers. Our top three investment recommendations are Cimarex Energy, MEG Energy and Raging River. We are maintaining our Outperform rating and target price of $120 for Cimarex Energy. We believe that the company s resource potential in the Permian remains undervalued and that the shares could be positively re-rated to trade more in line with Permian peers with addition success in the Wolfcamp. In our opinion, returns achieved by Cimarex in the Wolfcamp could improve significantly in 2014 with longer laterals, increased stages, higher liquids yields from targeting separate Wolfcamp benches and new areas. De-risking of the Wolfcamp in Reeves and Ward/Winkler Counties should also drive resource potential and net asset value higher. The company s recent A Bench results in Culberson were very encouraging and provide a glimpse of the potential improvement in capital efficiency and returns. We believe that Cimarex can sustain mid-teens production growth (+20% liquids) with minimal cash flow outspend. Our $120 target price implies a 2014E EV/EBITDA multiple of 6.7x We are maintaining our Outperform rating and $44 target price for MEG Energy. We expect 2014 to be pivotal year for MEG as it ramps up production and cash flow from its recently completed Phase 2B expansion at Christina Lake, supplemented by incremental production Page 2 January 6, 2014
3 from the company s RISER initiative. MEG s financial results should also be positively impacted by the company s rail-to-barge strategy that will be fully implemented in 2014, which should drive up realized netbacks relative to historical levels and the company s peers. Taken together these initiatives should result in a tripling of cash flow in 2014E compared to 2013E. MEG also provides investors with exposure to improving pricing dynamics for Western Canadian heavy oil. We expect Western Canada Select (WCS) prices to be positively impacted by the much anticipated (and delayed) ramp up of BP s Whiting refinery conversion as well as the start up of the Flanagan South pipeline. We believe that these events should start to shrink the significant discount to underlying net asset value. Our $44 target price implies a 2014E EV/EBITDA multiple of 12.2x and a 29% discount to estimated 2014E net asset value. We are maintaining our Outperform rating and $7.50 target price for Raging River. The company delivered outstanding share price performance in 2013 that we believe will continue in 2014 as the company delivers more than 50% per share growth (~40% exit to exit). Raging River has achieved the highest netbacks among its peers at ~$60/boe and cash flow of ~$54/boe on our price deck. The company has a very strong balance sheet and will spend ~110% of cash flow in 2014 and exit with D/CF of just x trailing cash flow. Raging River has established a track record of under promising and over delivering (raised guidance five times in 2013) and we expect similar performance in In our opinion, the valuation remains attractive at 6.4x 2014E EV/EBITDA compared to its peers, which are trading in the x range. Our $7.50 target price implies a 2014E EV/EBITDA multiple of 7.0x and an 8% discount to estimated 2014E net asset value. Commodity Price Update We are revising our commodity price estimates for crude oil and natural gas to reflect our updated expectations. We are raising our Brent crude oil estimate in 2014 to $105/bbl from $98/bbl and our 2015 estimate to $100/bbl from $95/bbl. Our long-term estimate of $97/bbl is unchanged. We are modestly lowering our WTI estimates from $95/bbl to $93.58/bbl for 2014E, maintaining our $90/bbl for 2015E, which matches our long-term assumption of $90/bbl. For Henry Hub natural gas, we are maintaining our 2014E estimate of $3.85/Mcf. Our 2015 forward estimates are unchanged at $4.00/Mcf with long-term prices of $4.50/Mcf. We are revising our outlook for select North American refining margins and regional basis differentials. We generally expect a continuation of strong refining margins through 2014; however, we see headwinds in the AECO basis to Henry Hub and expect Canadian gas producers to receive a steep $1.00/Mcf discount through Our commodity price revisions are shown in Table 1. Page 3 January 6, 2014
4 Table 1: Commodity Price Revisions Revised Previous 1Q14e 2Q14e 3Q14e 4Q14e 2014e 2015e 2016e 2017e+ 1Q14e 2Q14e 3Q14e 4Q14e 2014e 2015e 2016e 2017e+ Crude Oil WTI (US$/bbl) Brent (US$/bbl) LLS (US$/bbl) OPEC Basket ( /bbl) Bakken (US$/bbl) Permian (US$/bbl) Maya (US$/bbl) Edmonton Light (C$/bbl) Syncrude (C$/bbl) Western Canada Select (C$/bbl) Bitumen Field Price (C$/bbl) Refining Margins Eastern Canada (C$/bbl) Western Canada (C$/bbl) US East Coast (US$/bbl) US Midwest (US$/bbl) US Gulf Coast (US$/bbl) US West Coast (US$/bbl) Natural Gas Henry Hub (US$/Mcf) AECO (C$/Mcf) AECO-Henry Hub Basis (US$/Mcf) (0.75) (1.00) (1.00) (1.00) (0.94) (1.00) (1.00) (1.00) (1.00) (1.00) (0.75) (0.65) (0.85) (0.50) (0.50) (0.50) Exchange Rate US$/C$ Exchange Rate US$/ Exchange Rate Estimate Revisions Table 2: Canadian Integrated Oils Earnings and NAV Revisions We are updating our financial estimates to reflect our revised commodity price assumptions. Table 2 provides our earnings revisions for the Canadian Integrateds. Our earnings estimates for 2014E and 2015E are buoyed by a combination of stronger refining margins in Canada and improved heavy oil pricing. On average, our earnings estimates increased by 2% in 2014E and by 6% in 2015E. Our net asset value estimates remain largely unchanged on average, decreasing a modest 1% for 2013E with no change for 2014E as the more favourable price deck is offset by our revised company specific assumptions. We have revised our target prices for each of the Canadian Integrateds to reflect the changes to our net asset value estimates. Old New Price Old New EPS (New) EPS (Old) %Change NAV (New) NAV (Old) %Change Ticker Analyst Rating Rating Jan-03 Target Target Cenovus CVE RO OP OP % 25% % -7% Husky Energy HSE RO Mkt Mkt % 9% % 7% Imperial Oil IMO RO Mkt Mkt % -4% % 4% Suncor Energy SU RO OP OP % -4% % -4% Integrated Average 2% 6% -1% 0% RO = Randy Ollenberger, BMO Nesbitt Burns Inc. Table 3 provides our target price, cash flow and net asset value revisions for the Senior Producers. On average, the revisions to our commodity price outlook result in no change to our 2014E or 2015E cash flow per share estimates. Our average 2013E and 2014E net asset value estimates have each increased by 3%, largely reflecting our assumption for stronger Canadian crude prices. Page 4 January 6, 2014
5 Table 3: North American Senior E&P Cash Flow and NAV Revisions Old New Price Old New CFPS (New) CFPS (Old) %Change NAV (New) NAV (Old) %Change Ticker Analyst Rating Rating Jan-03 Target Target Antero AR PJ OP OP % -1% % -2% ARC Resources ARX GT OP OP % -3% % -8% Athabasca Oil ATH JD OP(S) OP(S) (0.03) 0.45 (0.02) 0.44 na 2% % 8% Baytex BTE GT OP OP % 4% % 7% Cabot AR PJ OP OP % 2% % 19% Canadian Natural CNQ RO R R R R R R R R R R R R R R R R R Canadian Oil Sands COS RO Mkt Mkt % 15% % 13% Chesapeake CHK DM Mkt Mkt % -4% % 17% Cimarex Energy XEC PJ OP OP % -1% % 5% Concho CXO PJ OP OP % 9% % -3% Crescent Point CPG GT OP OP % -1% % 0% Encana ECA RO OP OP % -11% % -10% Enerplus ERF GT OP OP % 1% % 1% EQT EQT PJ OP OP % 0% % 1% MEG Energy MEG RO OP OP % -1% % -7% Newfield Exploration NFX DM Mkt Mkt % 0% % -6% Noble NBL DM Mkt Mkt % -4% % 3% Pacific Rubiales PRE JD OP OP % 7% % 1% Pengrowth PGF GT Mkt Mkt % -5% % 4% Penn West PWT GT Mkt Mkt % -2% % -1% QEP Resources QEP DM OP OP % -1% % -3% Range Resources RRC DM OP OP % 1% % 15% Southwestern SWN DM Mkt Mkt % 0% % 22% Talisman TLM RO Mkt Mkt % 1% % 1% Vermilion VET GT OP OP % 6% % 4% Whiting Petroleum WLL PJ OP OP % -5% % 3% Seniors Average 0% 0% 3% 3% RO = Randy Ollenberger, BMO Nesbitt Burns Inc. GT = Gordon Tait, BMO Nesbitt Burns Inc. JD = Jared Dziuba, BMO Nesbitt Burns Inc. DM = Dan McSpirit, BMO Capital Markets Corp. PJ = Phillip Jungwirth, BMO Capital Markets Corp. Table 4 provides our target price, cash flow and net asset value revisions for the Intermediate oil and gas producers. On average, the changes to our commodity price outlook have resulted in a decrease of 2% for our cash flow per share estimates in 2014E and a decrease of 3% in 2015E. Our average net asset value estimates for the group remain unchanged in both 2013E and 2014E as the boost to the Canadian producers of stronger Canadian crude pricing is offset by slightly weaker Canadian gas price realizations, while our long term U.S. pricing assumptions remain largely unchanged. Page 5 January 6, 2014
6 Table 4: Intermediate Oil & Gas Producers Cash Flow and NAV Revisions Old New Price Old New CFPS (New) CFPS (Old) %Change NAV (New) NAV (Old) %Change Ticker Analyst Rating Rating Jan-03 Target Target Advantage AAV GT Und Und % -3% % 5% Bill Barrett BBG DM Und Und % -26% % 11% Bonterra BNE GT OP OP % -9% % 0% Bonavista BNP GT Mkt Mkt % -6% % -3% Comstock CRK DM Mkt Mkt % -1% % -17% Crew CR JB Mkt Mkt % 1% % 7% Denbury Resources DNR PJ Mkt Mkt % 8% % 17% Energen EGN PJ OP OP % -24% na na EPL Oil & Gas EPL DM OP OP % -19% % -32% EXCO Resources XCO PJ Mkt Mkt % -14% nm nm Forest Oil FST DM Mkt Mkt % 4% % -20% Laredo Petroleum LPI DM OP OP % 0% % -13% Legacy LEG JB OP OP % 2% % -6% Lightstream LTS JB Mkt Mkt % -2% % -12% Long Run LRE JB Mkt Mkt % -2% % 8% Niko Resources NKO JD Mkt (S) Mkt (S) % 2% % 11% NuVista NVA JB OP OP % -10% % -8% Oasis Petroleum OAS DM Mkt Mkt % 0% % -4% Oryx Petroleum OXC JD OP(S) OP(S) nm nm % 7% Paramount POU JB Mkt Mkt % -10% % 5% Penn Virginia PVA PJ Mkt Mkt % 14% na na Peyto PEY JB OP OP % -9% % 0% Quicksilver KWK DM Mkt Mkt (0.07) nm nm % 0% Rosetta ROSE DM Mkt Mkt % 0% % 15% SandRidge Energy SD PJ Und Und % 16% % 11% SM Energy SM PJ Mkt Mkt % -1% % 0% Trilogy TET GT Mkt Mkt % -2% % -1% Twin Butte TBE GT Mkt Mkt % 4% % 5% Unit UNT PJ Mkt Mkt % 0% % 2% Whitecap WCP JB OP OP % -2% % -2% WPX Energy WPXUS PJ Mkt Mkt % 8% % 7% W&T Offshore WTI DM Mkt Mkt % 1% % 0% Intermediate Average -2% -3% 0% 0% RO = Randy Ollenberger, BMO Nesbitt Burns Inc. GT = Gordon Tait, BMO Nesbitt Burns Inc. JD = Jared Dziuba, BMO Nesbitt Burns Inc. DM = Dan McSpirit, BMO Capital Markets Corp. PJ = Phillip Jungwirth, BMO Capital Markets Corp. Table 5 provides our target price, cash flow and net asset value revisions for the Junior oil and gas producers. On average, the changes to our commodity price outlook have resulted in cash flow per share estimates decreasing 2% in 2014E while our 2015E estimates are unchanged. Our 2013E and 2014E net asset value estimates also remain unchanged, on average. Page 6 January 6, 2014
7 Table 5: Junior Oil & Gas Producers Cash Flow and NAV Revisions Old New Price Old New CFPS (New) CFPS (Old) %Change NAV (New) NAV (Old) %Change Ticker Analyst Rating Rating Jan-03 Target Target Approach Resources AREX PJ Mkt Mkt % 11% % -30% Arcan ARN JB Und Und 0.38 na na % 4% % -32% BlackPearl PXX JD OP OP % 3% % 10% Bonanza Creek BCEI PJ OP OP % 14% % 10% Carrizo CRZO DM Mkt Mkt % -12% % -7% Connacher CLL JD Mkt Mkt 0.17 na na nm nm % 27% Freehold FRU GT Mkt Mkt % -4% % 0% Gastar GST PJ Mkt Mkt % -2% nm nm Goodrich GDP DM OP OP % 0% % -12% Halcon Resources HK DM OP OP % -24% % -17% Kodiak Oil & Gas KOG DM OP OP % 0% % 0% Magnum Hunter MHR DM Mkt Mkt % 0% % 0% Northern Oil & Gas NOG PJ Mkt Mkt % 9% % 8% PDC Energy PDCE PJ OP OP % -6% % -3% Perpetual PMT GT Mkt Mkt % -8% % -6% Raging River RRX JB OP OP % -2% % -1% Resolute Energy REN PJ Mkt Mkt % -15% % 0% REX Energy REXX PJ OP OP % 2% % 0% Southern Pacific STP JD Mkt(S) Mkt(S) 0.20 na na nm nm % 7% Surge SGY JB Mkt Mkt % -2% % 2% TORC TOG JB OP OP % 4% % 11% Triangle Petroleum TPLM DM Mkt Mkt % 29% % 20% Warren Resources WRES PJ Mkt Mkt % 10% % 25% Zargon ZAR GT Mkt Mkt % 1% % 3% Junior Median -2% 0% 0% 0% RO = Randy Ollenberger, BMO Nesbitt Burns Inc. GT = Gordon Tait, BMO Nesbitt Burns Inc. JD = Jared Dziuba, BMO Nesbitt Burns Inc. DM = Dan McSpirit, BMO Capital Markets Corp. PJ = Phillip Jungwirth, BMO Capital Markets Corp. Page 7 January 6, 2014
8 Sector Outlook We are maintaining rating of Market Perform for the Large Cap and Small Cap Oil and Gas Producers. Within the Large Cap group, we continue to favour the Integrated Oils due to their natural hedge against the volatile crude differentials and infrastructure constraints. Integrated Oils Outlook We continue recommend that investors overweight the group. The North American Integrateds are trading at P/E multiples of 13.7x 2014E earnings, a slight discount to the historical multiple of roughly 15x. Our top recommendation in the group is Suncor. We are maintaining our Outperform rating and $46 target price for Suncor Energy. Suncor has evolved into a different company than it was as little as five years ago. The company has adopted a new strategy that is focused on profitably growing the company and returning surplus cash to shareholders through a growing dividend and share buyback program. The company s growth strategy is focused both on growth from the existing assets through a debottlenecking program and new projects in its vast portfolio that together should drive ~6% compound annual growth in production through 2020 as well as rising returns on capital. At the same time, we believe that Suncor could generate roughly $8 billion in surplus cash (cash flow leftover after capital spending and dividends) over the next four years that can be used to buyback shares; this is the highest in its peer group. The shares are trading at a material discount to Canadian and Supermajor peers. Our $46 target price implies a 2014E EV/EBITDA multiple of 5.6x and is roughly in line with our 2014E net asset value estimate of $46.31 per share. Page 8 January 6, 2014
9 Table 6: North American Integrateds and Multi-National Valuation and Operating Comparables Price EPS (diluted) P/E EPS Growth CFPS (diluted) P/CF Ticker Analyst Rating 03-Jan Target Return e 2014e 2013e 2014e 2013/ / e 2014e 2013e 2014e Cenovus CVE RO OP % % -2% Hess HES NR NR NR NR % -4% Husky Energy HSE RO Mkt % % 9% Imperial Oil IMO RO Mkt % % -4% Suncor SU RO OP % % 2% North American Integrateds 17% % 0% BP PLC BP NR NR NR NR % -6% ConocoPhillips COP NR NR NR NR % 18% Chevron CVX NR NR NR NR % -6% Exxon Mobil XOM NR NR NR NR % 4% Royal Dutch RDS.A NR NR NR NR % -3% Total TOT NR NR NR NR % -13% Multi-Nationals na % -1% Shares Mkt Cap Net Debt Ent Val EV/EBITDA Lt Liab D/CF ROCE DPS Yield NAV P/NAV Ticker (mm) ($bn) ($bn) ($bn) 2013e 2014e 2012e 2013e 2014e 2013e 2014e 2013e 2013e 2013e Strip* 2013e Strip* Cenovus CVE % % 11% % Hess HES na 1.4 nm na na % na na na na Husky Energy HSE % % 11% % Imperial Oil IMO % % 12% % Suncor SU 1, % % 11% % North American Integrateds % % 11% 2.1% BP PLC BP 3, na na na % na na na na ConocoPhillips COP 1, na na na % na na na na Chevron CVX 1, (9.0) na nm nm na na % na na na na Exxon Mobil XOM 4, na na na % na na na na Royal Dutch RDS.A 1, na na na % na na na na Total TOT 2, na na na % na na na na Multi-Nationals na na na 4.0% na na Nat. Gas (Mmcf/d) Crude & Liquids (000 b/d) Corporate (000 boe/d) Growth %Oil Proven Resource RLI Ticker e 2014e e 2014e e 2014e e mmboe mmboe Proven Cenovus CVE % 67% 2,175 12, Hess HES na na na na na na na na 1,553 na 10.5 Husky Energy HSE % 73% 1,192 14, Imperial Oil IMO % 89% 3,574 15, Suncor SU % 95% 4,099 30, North American Integrateds 2,598 2,246 1,434 1,320 1,337 1,425 1,224 1,355 1,770 1,799 1,463 1,575 7% 81% 2,519 18, BP PLC BP 6,807 6,609 na na 1,285 1,179 na na 2,420 2,281 na na 2% 52% 11,685 68, ConocoPhillips COP 4,516 4,245 na na na na 1,619 1,579 1,626 1,675 4% 55% 8,642 40, Chevron CVX 4,941 5,074 na na 1,849 1,764 na na 2,673 2,610 na na 3% 68% 11,347 62, Exxon Mobil XOM 13,162 12,322 na na 2,312 2,185 na na 4,506 4,239 na na 2% 52% 25,164 87, Royal Dutch RDS.A 8,986 9,449 na na 1,666 1,633 na na 3,164 3,208 3,311 3,401 3% 51% 13,556 60, Total TOT 6,098 5,880 na na 1,226 1,220 na na 2,242 2,200 2,255 2,311 3% 55% 11,400 40, Multi-Nationals 44,510 43,579 na na 9,204 8,852 na na 16,622 16,115 7,191 7,387 3% 55% 81, , , First Call RO = Randy Ollenberger, BMO Nesbitt Burns Inc. Large Cap Producers Outlook In addition to the Integrated Oils, we continue to favour companies within the Large Cap Producers group that are exposed to unconventional assets because of their lower full-cycle cost structures. The North American Senior Producer group is currently trading at roughly 5.7x 2014E cash flow and 0.8x 2013E estimated net asset value. Our top recommendations in the group are Cimarex Energy, EQT, MEG Energy, Range Resources and Vermilion. We are maintaining our Outperform rating and target price of $120 for Cimarex Energy. We believe that the company s resource potential in the Permian remains undervalued and that the shares could be positively re-rated to trade more in line with Permian peers with additional success in the Wolfcamp. In our opinion, returns achieved by Cimarex in the Wolfcamp could improve significantly in 2014 with longer laterals, increased stages, higher liquids yields from targeting separate Wolfcamp benches and new areas. De-risking of the Wolfcamp in Reeves and Ward/Winkler Counties should also drive resource potential and net asset value higher. The company s recent A Bench results in Culberson were very encouraging and provide a glimpse of the potential improvement in capital efficiency and returns. We believe that Page 9 January 6, 2014
10 Cimarex can sustain mid-teens production growth (+20% liquids) with minimal cash flow outspend. Our $120 target price implies a 2014E EV/EBITDA multiple of 6.7x. We are maintaining our Outperform rating and modestly lowering our target price to $115 from $120 for EQT. In our opinion the shares are undervalued on a sum-of-the-parts basis and we believe that the Street is missing the value of its general partner interest in EQM, which we estimate is worth ~$10 15/share. We expect midstream drop downs to accelerate in 2014 and for the value of the General Partner to be better realized. EQT is positioned to deliver ~30% per year production growth over the next three years and we view 2014 guidance as conservative. We believe that the company should begin generating free cash flow in 2017E. Our $115 target price implies a 2014E EV/EBITDA multiple of 11.8x. We are maintaining our Outperform rating and $44 target price for MEG Energy. We expect 2014 to be pivotal year for MEG as it ramps up production and cash flow from its recently completed Phase 2B expansion at Christina Lake, supplemented by incremental production from the company s RISER initiative. MEG s financial results should also be positively impacted by the company s rail-to-barge strategy that will be fully implemented in 2014, which should drive up realized netbacks relative to historical levels and the company s peers. Taken together these initiatives should result in a tripling of cash flow in 2014E compared to 2013E. MEG also provides investors with exposure to improving pricing dynamics for western Canadian heavy oil. We expect Western Canada Select (WCS) prices to be positively impacted by the much anticipated (and delayed) ramp up of BP s Whiting refinery conversion as well as the start up of the Flanagan South pipeline. We believe that these events should start to shrink the significant discount to underlying net asset value. Our $44 target price implies a 2014E EV/EBITDA multiple of 12.2x and a 29% discount to estimated 2014E net asset value. We are maintaining our Outperform rating and raising our target price to $90 from $84 for Range Resources. The company holds a very high quality asset base concentrated in the liquids rich areas of the prolific Marcellus shale. We believe that Range can deliver production growth of roughly 25% per year over the next several years and see the company positioned to achieve a near cash flow neutral state by late 2014 (liquidity will be enhanced with proceeds from sale of Permian Basin properties expected H1/14). In our view, the biggest point of distinction is how the company prices its wet gas production. Range has three ethane solutions in place today, one of which is unique to the company: export of ethane (and propane) from Marcus Hook near Philadelphia (contracted sales volumes increase to 20,000 b/d under a 15-year ethane sales agreement with INEOS Europe AG). These arrangements could take on greater importance in 2014 if Appalachian Basin producers are challenged by potentially wider basis differentials. Range trades at a premium to its gas-leveraged peers that we believe is warranted because of the quality of the asset base, reliable growth and liquids pricing strategy. Our $90 target price implies a 2014E EV/EBITDA multiple of 12.4x and in line with our 2014E net asset value estimate. We are maintaining our Outperform rating and $66 target price for Vermilion Energy. Vermilion provides investors with leverage to global crude oil and natural gas prices. Approximately 60% of the company s oil production is priced directly off of Brent crude oil prices while 80% of its natural gas production is in Europe (Netherlands and Germany) and receives global natural gas prices. Vermilion recently announced a natural gas acquisition in Germany, establishing a new core area for the company. We believe that the company will look for opportunities to expand its operations in Germany similar to the way it has in France Page 10 January 6, 2014
11 and the Netherlands (it is worth noting that Germany s oil and gas industry is roughly five times the larger than that of France). In North America, we expect to see drilling results from the company s Duvernay exploration program in 2014 of which we believe very little is priced into the shares. Vermilion s Corrib Project has been materially delayed, largely for regulatory reasons; however, it is now well under way and as the project moves closer to completion, we believe it will begin to factor into the company s valuation. Corrib is expected boost Vermilion s cash flow by ~20 25% when it is operational in mid-2015 and we would not rule out a dividend increase if Corrib is still on track in mid Our $66 target price implies a 2014E EV/EBITDA multiple of 8.8x and a 6% discount to estimated 2014E net asset value. Page 11 January 6, 2014
12 Table 7: North American Senior Producers Valuation Comparables Price EPS (diluted) P/E CFPS (diluted) P/CF CFPS Growth Ticker Analyst Rating 03-Jan Target Return e 2014e 2013e 2014e e 2014e 2013e 2014e 2013e 2014e Anadarko APC NR NR NR NR % 11% Antero Resources AR PJ OP % (1.09) % 106% Apache APA NR NR NR NR % 3% ARC Resources ARX GT OP % % 10% Baytex BTE GT OP % nm % 11% Cabot COG PJ OP % % 62% Canadian Natural CNQ RO R R R R R R R R R R R R R R R R Canadian Oil Sands COS RO Mkt % % -16% Chesapeake CHK DM Mkt % % 19% Cimarex Energy XEC PJ OP % % 21% Concho Resources CXO PJ OP % % 18% Crescent Point CPG GT OP % % 4% Devon DVN NR NR NR NR % 17% Encana ECA RO OP % % -19% EOG EOG NR NR NR NR % 18% EQT EQT PJ OP % % 38% Marathon MRO NR NR NR NR % 17% MEG Energy MEG RO OP % nm % 104% Murphy MUR NR NR NR NR % 6% Newfield Exploration NFX DM Mkt % % -9% Noble Energy NBL DM Mkt % % -19% Occidental OXY NR NR NR NR % 2% Pacific Rubiales PRE JD OP % % 29% Pengrowth PGF GT Mkt % 0.03 (0.44) 0.12 (14.8) % -7% Penn West PWT GT Mkt % 0.37 (0.31) (0.02) nm nm % -14% Pioneer PXD NR NR NR NR % 10% QEP Resources QEP DM OP % % 11% Range Resources RRC DM OP % % 26% Southwestern SWN DM Mkt % % 16% Talisman TLM RO Mkt % 0.09 (0.17) (0.05) (66.7) (216.3) % -8% Ultra Petroleum UPL NR NR NR NR % -6% Vermilion VET GT OP % nm nm % 7% Whiting Petroleum WLL PJ OP % % 19% Senior Producers 22% % 11% Shares Mkt Cap Net Debt Ent Val EV/EBITDA EV/Boe/d EV/Boe D/CF DPS Yield NAV P/NAV Ticker (mm) ($bn) ($bn) ($bn) 2013e 2014e 2013e 2014e 2012e 2013e 2014e 2013e 2013e 2013e Strip* 2013e Strip* Anadarko APC ,811 60, % na na na na Antero Resources AR , , na na Apache APA ,850 66, % na na na na ARC Resources ARX ,850 88, % na 0.9 na Baytex BTE ,559 94, % na 0.8 na Cabot COG ,024 61, % Canadian Natural CNQ R R R R R R R R R R R R R R R R R Canadian Oil Sands COS ,266 97, % Chesapeake CHK ,471 60, % na Cimarex Energy XEC ,900 73, % Concho Resources CXO , , % Crescent Point CPG , , % na 0.7 na Devon DVN ,170 na % na na na na Encana ECA ,423 33, % EOG EOG ,867 88, % na na na na EQT EQT ,846 67, % Marathon MRO na na % na na na na MEG Energy MEG , , na Murphy MUR ,815 53, % na na na na Newfield Exploration NFX ,133 57, na na Noble Energy NBL ,419 77, % na Occidental OXY na na % na na na na Pacific Rubiales PRE ,495 41, % Pengrowth PGF ,691 69, % 7.47 na 0.9 na Penn West PWT ,703 66, % na 0.5 na Pioneer PXD na na % na na na na QEP Resources QEP ,040 56, % na Range Resources RRC ,684 80, % na Southwestern SWN ,798 45, na na Talisman TLM 1, ,324 46, % Ultra Petroleum UPL ,924 45, na na na na na Vermilion VET , , % na 0.9 na Whiting Petroleum WLL ,952 81, na na 0.9 na Senior Producers ,900 68, % RO = Randy Ollenberger, BMO Nesbitt Burns Inc. DM = Dan McSpirit, BMO Capital Markets Corp. PJ = Phillip Jungwirth, BMO Capital Markets JB = Jim Byrne, BMO Nesbitt Burns Inc. JD = Jared Dziuba, BMO Nesbitt Burns Inc. GT = Gord Tait, BMO Nesbitt Burns Inc. Page 12 January 6, 2014
13 Table 8: North American Senior Producers Operating Comparables Nat. Gas (Mmcf/d) Crude & Liquids (000 b/d) Corporate (000 boe/d) Growth %Gas Reserves (mmboe) RLI Ticker e 2014e e 2014e e 2014e e Proven Anadarko APC 2,334 2,495 2,325 2, % 50% 2,539 2, Antero Resources AR % 92% Apache APA 2,262 2,293 na na na na % 49% 2,990 2, ARC Resources ARX % 60% Baytex BTE % 12% Cabot COG ,084 1, % 96% Canadian Natural CNQ R R R R R R R R R R R R R R R R R Canadian Oil Sands COS % na Chesapeake CHK 2,750 3,315 3,217 2, % 76% 3,131 2, Cimarex Energy XEC % 49% Concho Resources CXO % 38% Crescent Point CPG % 9% Devon DVN 2,610 2,563 2,340 na na na na 57% 3,005 2, Encana ECA 3,333 2,981 2,775 2, % 90% 2,273 1, EOG EOG 1,602 1,516 1,329 na na na 46% 2,054 1, EQT EQT , % 92% 894 1, Marathon MRO na na na na 65% 1,800 2, MEG Energy MEG % 0% 708 1, Murphy MUR na na na na % 42% Newfield Exploration NFX % 43% Noble Energy NBL ,068 1, % 55% 1,210 1, Occidental OXY 1,223 1,286 na na na na na 9% 28% 3,176 3, Pacific Rubiales PRE % 7% Pengrowth PGF % 45% Penn West PWT % 37% Pioneer PXD na na na na 41% 1,063 1, QEP Resources QEP % 72% Range Resources RRC % 77% 842 1, Southwestern SWN 1,368 1,547 1,798 2, % 100% Talisman TLM 1,491 1,577 1,455 1, % 65% 1,488 1, Ultra Petroleum UPL na na 4 4 na na na 97% Vermilion VET % 33% Whiting Petroleum WLL % 13% Senior Producers 26,410 27,993 23,644 19,485 3,050 3,571 2,796 2,138 7,452 8,237 8,713 7,065 10% 49% 10.6 See table above for analyst coverage Mid-Cap/Small-Cap Producers Outlook The Intermediate Oil & Gas Producers and Junior Oil & Gas Producers currently trade at 3.9x and 4.4x 2014 P/CF, respectively. Our top recommendations include Goodrich Petroleum and Raging River. We are maintaining our Outperform rating and lowering our target price to $30 from $34 for Goodrich Petroleum. In our view Goodrich is a risk curve trade on the Tuscaloosa Marine Shale (TMS). There has been a lot of positive and negative speculation about the resource potential of the TMS; however, there is not enough data points yet to confirm views. We believe that will change in 2014 as more capital from more operators is invested to explore the play. Goodrich affords the greatest torque to the TMS with more than 300,000 net acres in the play, an aggressive 2014 capital program that s make or break (~$300 million to drill the TMS out of $375 million total and more than 20 net completions planned. Potential upcoming catalysts include results on the Huff 18-7H 1 well expected second week of January followed by the Weyerhaeuser 51H 1 well in late January. Our $30 target price implies a 2014E EV/EBITDA multiple of 9.2x and is in line with our 2014E net asset value estimate. We are maintaining our Outperform rating and $7.50 target price for Raging River. The company delivered outstanding share price performance in 2013 that we believe will continue in 2014 as the company delivers production growth of more than 50% per share (~40% exit to exit). Raging River has achieved the highest netbacks among its peers at ~$60/boe and cash flow of ~$54/boe on our price deck. The company has a very strong balance sheet and will Page 13 January 6, 2014
14 spend ~110% of cash flow in 2014 and exit with D/CF of just x trailing cash flow. Raging River has established a track record of under promising and over delivering (raised guidance five times in 2013) and we expect similar performance in In our opinion, the valuation remains attractive at 6.1x 2014E EV/EBITDA compared to its peers, which are trading in the x range. Our $7.50 target price implies a 2014E EV/EBITDA multiple of 7x and an 8% discount to estimated 2014E net asset value. Page 14 January 6, 2014
U.S. Research Published by Raymond James & Associates
Energy John Freeman, CFA, (713) 278-5251, John.Freeman@RaymondJames.com Andrew Coleman, (713) 278-5261, Andrew.Coleman@RaymondJames.com Porter Pursley, Res. Assoc., (713) 278-5276, Porter.Pursley@RaymondJames.com
More informationOil & Gas Exploration and Production
Oil & Gas Exploration and Production Weekly Comp Tables Stocks up 0.3% over the past week. Our E&P coverage universe was up 0.3% over the past week versus the EPX, which rose 0.1%, and the S&P, which increased
More informationOil & Gas Exploration and Production
Oil & Gas Exploration and Production Weekly Comp Tables Stocks down 1.0% over the past week. Our E&P coverage universe was down 1.0% over the past week versus the EPX, which fell 1.7%, and the S&P 500,
More informationBuy Canadian Oil and Gas
Buy Canadian Oil and Gas Summary and Recommendation Buy-recommended (B1) Encana (ECA) and buy-rated (B3) Petro-Canada (PCZ), Suncor (SU) and Imperial Oil (IMO) offer high potential return, low McDep Ratio
More informationOperational Efficiency. Size Matters: Surviving a Pricing Downturn
Operational Efficiency Size Matters: Surviving a Pricing Downturn Size Matters: Surviving a Pricing Downturn As crude oil prices have fallen and North American natural gas prices remain weak, hedging will
More informationKey Crude Oil Production Commentary
CONTACT US John Best Managing Director jbest@criterionrsch.com James Bevan Editor jbevan@criterionrsch.com Key Crude Oil Production Commentary Contango Oil & Gas reported that they were able to accelerate
More informationUS oil and gas reserves study
US oil and gas reserves study 2014 Table of contents Study overview 1 Industry backdrop and study highlights 3 Capital expenditures 4 Revenues and results of operations 5 Oil reserves 6 Gas reserves 7
More informationIs Oil Price Too High?
Is Oil Price Too High? Summary and Recommendation The $39 a barrel price indicated for light sweet crude oil in May 2004 implies a gain of 39% over cash price in May 2003, less than the 70% gain that might
More informationUS E&P benchmark study. June 2012
US E&P benchmark study June 2012 Table of contents Study overview 1 Industry backdrop and study highlights 3 Capital expenditures 4 Revenues and results of operations 5 Oil reserves 6 Gas reserves 7 Performance
More informationEnergy - Oil & Gas. Crude Thoughts for a New Year
Industry Rating: Integrated Oils Outperform Oil & Gas Producers Market Perform January 6, 213 Research Comment Calgary, Alberta Randy Ollenberger (43) 515-152 BMO Nesbitt Burns Inc. (Canada) Jim Byrne,
More informationMeter Reader A Weekly Analysis of Energy Stocks Using the McDep Ratio April 13, More Ratings Ahead
More Ratings Ahead Summary and Recommendation More of the energy stocks in our coverage are likely to be rated buy, sell, or neutral over the next several weeks as we communicate our research in a manner
More informationCFA Society of Houston. April 23, 2014
CFA Society of Houston April 23, 2014 Important Notice This notice is issued with and forms an integral part of information supplied in the form of either a printed document or in an audio visual presentation
More informationIndependent Stock Idea November 12, 2017
Birchcliff Energy Ltd. (BIREF) Downward Price Pressure Lifting Independent Stock Idea Symbol BIREF Ebitda Next Twelve Months ending 9/30/18 (US$mm) 297 Rating Buy North American Natural Gas/Ebitda (%)
More informationPiranha! The Piranhaization of U.S. E&P
Copyright 2017 RBN Energy Piranha! The Piranhaization of U.S. E&P Concentration of Assets, Targeted Acquisitions, and Strategic Divestitures Separate the Winners from the Losers in a $50/bbl Crude Oil
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks March 8, 2011
Favor COSWF on Price Blowout, End Buy on CNQ Summary and Recommendation A widening of the price difference between Syncrude and West Texas Intermediate (WTI) to US$12 a barrel, which when added to US$105
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks May 18, 2010
European Oil for Contrarians Summary and Recommendation We classify buy recommendations Royal Dutch Shell, plc (RDS-A), Statoil ASA (STO), and Total S.A. (TOT) as Contrarian Buys to acknowledge that the
More informationMore Red Flags on Fracking: Weak Third-Quarter Results as Cash Losses Persist Even With Production and Price Increases
More Red Flags on Fracking: Weak Third-Quarter Results as Cash Losses Persist Even With Production and Price Increases Kathy Hipple, IEEFA Financial Analyst; Tom Sanzillo, IEEFA Director of Finance and
More informationIndependent Stock Idea May 18, 2017 Intraday
Dorchester Minerals, L.P. (DMLP) Midland Basin Spotlight Symbol DMLP Ebitda Next Twelve Months ending 3/31/18 (US$mm) 40 Rating North American Natural Gas/Ebitda (%) 46 Price (US$/sh) 16.50 Natural Gas
More informationEnergy Industry Data and Trends Supplemental Slides: The Art of the Share Buyback. October 2017
Energy Industry Data and Trends Supplemental Slides: The Art of the Share Buyback October 2017 Table of Contents Share Buyback Slides Pg. 3 Supplemental Market Slides Pg. 15 The Art of the Share Buyback
More informationGlobal oil and gas reserves study
Global oil and gas reserves study 2012 Table of contents Study overview 1 Worldwide study results Capital expenditures 4 Revenues and results of operations 6 Oil reserves 8 Gas reserves 10 Performance
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks March 2, 2010 Oil Growth of 70% to 2020 for COSWF
Oil Growth of 70% to 2020 for COSWF Summary and Recommendation Buy-recommended Canadian Oil Sands Trust (COSWF) confirmed last week that preliminary design work is underway to expand oil sands capacity
More informationIndependent Stock Idea Intraday November 2, 2017
Marathon Oil (MRO) Shale Oil Value Symbol MRO Ebitda Next Twelve Months ending 9/30/18 (US$mm) 2,570 Rating Buy North American Natural Gas/Ebitda (%) 8 Price (US$/sh) 14.99 Natural Gas and Oil Production/Ebitda
More informationIndependent Stock Idea Intraday October 24, 2017
Cross Timbers Royalty Trust (CRT) Free Cash Flow Independent Stock Idea Symbol CRT Ebitda Next Twelve Months ending 9/30/18 (US$mm) 9 Rating Buy North American Natural Gas/Ebitda (%) 48 Price (US$/sh)
More informationOil Price Scenario for the Decade
Oil Scenario for the Decade Summary and Recommendation During the 2010s the price of Light Sweet Crude Oil quoted on the New York Mercantile Exchange might settle near $40 a barrel, in 2003 dollars, following
More informationSector strategy: improving confidence in recovery
Sector strategy: improving confidence in recovery Price Objective Change Equity United States Oils 13 April 2015 Sector strategy: improving confidence in a recovery The US energy sector outlook continues
More informationEQUITY RESEARCH. $50/bbl (WTI) Stress Test & Valuation Trends. For Required Conflicts Disclosures, see Page 8.
EQUITY RESEARCH January 22, 2015 Looking for an E&P Entry Point $50/bbl (WTI) Stress Test & Valuation Trends RBC Energy & Utilities Equity Team Click here for contributing analysts' contact information
More informationBuilt to Grow through Cycles
XTO Energy: A Long Term Investment 1 Built to Grow through Cycles Confidence Consistency Competitive Advantage Sustainability The Cycle of XTO s Proven Strategy 2 Strong Balance Sheet Increasing ROR, Optimize
More informationOil & Gas Outlook. Brian M. Gibbons, Jr., CFA
Oil & Gas Outlook Brian M. Gibbons, Jr., CFA bgibbons@creditsights.com Presentation Overview Oil market trends and outlook Natural gas market trends and outlook Key industry themes Credit trends and outlook
More informationIndustry Observations September 30, 2018 Oil and Gas Industry
f Industry Observations September 30, 2018 Oil and Gas Industry Select Oil and Gas Public Company Industry Data (USD in millions, except per share data) Company Name Ticker Price at 09/30/18 % of 52 Week
More informationIndustry Idea Analysis of Oil and Gas Stocks September 25, 2017
Cash, Fracking and Inflation CRT, DMLP, PBT, SBR, SJT Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 22-Sep Cap Value Market Ebitda Ebitda PV NTM Ratio 2017 (US$mm)
More informationMeter Reader A Monthly Analysis of Oil and Gas Stocks December 12, 2017
Oil and Gas Gains in 2018 Summary and Recommendation Meter Reader Renewed optimism for global growth promises rising demand for oil and gas at the same time surplus fuel inventories are dwindling. U.S.
More informationIndependent Stock Idea Intraday August 8, 2017
San Juan Basin Royalty Trust (SJT) BP Tests Best San Juan Well in 14 Years Independent Stock Idea Symbol SJT Ebitda Next Twelve Months ending 6/30/18 (US$mm) 24 Rating North American Natural Gas/Ebitda
More informationGlobal oil and gas reserves study
Global oil and gas reserves study 2012 Table of contents Study overview 1 Worldwide study results Capital expenditures 4 Revenues and results of operations 6 Oil reserves 8 Gas reserves 10 Performance
More informationNARUC 2015 Summer Committee Meetings. Natural Gas for BaseLoad Power A Natural Gas Producers Perspective. New York City.
NARUC 2015 Summer Committee Meetings New York City July 13, 2015 Natural Gas for BaseLoad Power A Natural Gas Producers Perspective Jim Tramuto Vice President Governmental & Regulatory Strategies XOM CHK
More informationMeter Reader A Monthly Analysis of Oil and Gas Stocks June 13, 2017
Value Beckoning Meter Reader Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 12-Jun Cap Value Market Ebitda Ebitda PV NTM Ratio 2017 (US$mm) ($mm) Cap NTM NTM (%)
More informationIndustry Idea Analysis of Oil and Gas Stocks January 22, 2016
Income Payer Surprises CRT, PBT, SBR, SJT, DMLP Present Value by Segment (%) Price North Rest of Dist. (US$/sh) EV/ Enterprise Amer. World Yield Symbol/Rating 21-Jan Market Value Natural Natural Oil Down-
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks June 19, 2012
Cenovus Energy (CVE - Contrarian Buy) Deep Oil Sands Growth at Lower Price Symbol CVE Ebitda Next Twelve Months ending 6/30/13 (US$mm) 4,500 Rating Contrarian Buy North American Natural Gas/Ebitda (%)
More informationCIBC Oil & Gas Weekly
I N S T I T U T I O N A L E Q U I T Y R E S E A R C H Jon Morrison 1 (403) 216-3400 Jon.Morrison@cibc.com John Gibson 1 (403) 260-8668 John.Gibson@cibc.com Scott Reid, CFA 1 (403) 216-3402 Scott.Reid@cibc.com
More informationIndustry Idea Analysis of Oil and Gas Stocks July 19, 2017
Large Cap Independent Producers Potential to Prosper Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 18-Jul Cap Value Market Ebitda Ebitda PV NTM Ratio 2017 (US$mm)
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks October 28, 2014
Cenovus Energy (CVE) Same Stock Price, Twice the Production Symbol CVE Ebitda Next Twelve Months ending 9/30/15 (US$mm) 3,500 Rating North American Natural Gas/Ebitda (%) 10 Price (US$/sh) 24.14 Natural
More informationIndependent Stock Idea September 22, 2015
Cross Timbers Royalty Trust (CRT) Low Risk 7.5% Income Independent Stock Idea Symbol CRT Ebitda Next Twelve Months ending 9/30/16 (US$mm) 10 Rating Buy North American Natural Gas/Ebitda (%) 50 Price (US$/sh)
More informationIndustry Idea Analysis of Oil and Gas Stocks September 1, 2015
MRO, DVN, COP, OXY, EOG Resilient Large Cap Independent Producers Present Value by Segment (%) Price North Rest of Dist. (US$/sh) EV/ Enterprise Amer. World Yield Symbol/Rating 31-Aug Market Value Natural
More informationIndustry Idea Analysis of Oil and Gas Stocks December 20, 2017
Top Line Premium and Bottom Line Upside CRT, DMLP, PBT, SBR, SJT Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 19-Dec Cap Value Market Ebitda Ebitda PV NTM Ratio
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks September 20, 2011
20% More Oil for the Buck Summary and Recommendation The long-term investment appeal of oil and gas stocks in a growing global economy is better today than five months ago when measured by the future physical
More informationFinancial Research & Analysis
Financial Research & Analysis Oil and Gas Accounting Hot Topics 2009 Webcast March 12, 2009 Julie Hilt Hannink julie.hannink@riskmetrics.com + 301.354.9919 Today s Agenda Commodity Price Drives Impairment
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks October 16, 2012
Royal Dutch Shell (RDS) Clean Energy for Global Growth Meter Reader Symbol RDS-A Ebitda Next Twelve Months ending 9/30/13 (US$mm) 54,400 Rating Buy North American Natural Gas/Ebitda (%) 2 Price (US$/sh)
More informationMeter Reader A Monthly Analysis of Oil and Gas Stocks Intraday November 16, 2017
Buy ETF or Global Integrated Stock Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 16-Nov Cap Value Market Ebitda Ebitda PV NTM Ratio 2017 (US$mm) ($mm) Cap NTM
More informationIndependent Stock Idea October 18, 2016
California Resources Corporation (CRC) Option on Oil Price Independent Stock Idea Symbol CRC Ebitda Next Twelve Months ending 9/30/17 (US$mm) 713 Rating North American Natural Gas/Ebitda (%) 11 Price ($/sh)
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks February 15, 2011
Euro Oils Pay High Dividends from Global Profits Summary and Recommendation Buy recommendations Total (TOT), Statoil (STO) and Royal Dutch Shell (RDS) offer the highest current dividend yields in our large
More informationInvestor Presentation January 2017
Investor Presentation January 2017 FORWARD-LOOKING STATEMENTS AND OTHER DISCLAIMERS This presentation includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933,
More informationIndependent Stock Idea Intraday September 4, 2018
Suncor Energy (SU) Oil Value Upside Symbol SU Ebitda Next Twelve Months ending 9/30/19 (US$mm) 12,600 Rating Natural Gas/Ebitda (%) 0 Price (US$/sh) 40.35 Natural Gas and Oil Production/Ebitda (%) 78 Pricing
More informationIndustry Idea Analysis of Oil and Gas Stocks October 17, 2017
Large Cap Frackers Oil Price Moderators Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 16-Oct Cap Value Market Ebitda Ebitda PV NTM Ratio 2017 (US$mm) ($mm) Cap
More informationIndustry Idea Analysis of Oil and Gas Stocks November 22, 2016
Income Payers Sparkle CRT, DMLP, PBT, SBR, SJT Present Value by Segment (%) Price North Rest of Dist. (US$/sh) EV/ Enterprise Amer. World Yield Symbol/Rating 21-Nov Market Value Natural Natural Oil Down-
More informationU.S./China Currency Devaluation Accelerates
Meter Reader Page 1 U.S./China Currency Devaluation Accelerates Summary and Recommendation Some of the recent action in stock price for buy-recommended PetroChina (PTR) and CNOOC Ltd. (CEO) seems to validate
More informationScotia Howard Weil Energy Conference. March 25-26, 2019
Scotia Howard Weil Energy Conference March 25-26, 2019 Forward-Looking Statements and Other Disclosures This presentation includes forward looking statements within the meaning of Section 27A of the Securities
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks February 10, 2009
Optimism Creeping Back Summary and Recommendation With oil and gas stock prices gradually tracing a more positive price trend since the stock market low in October 2008, the three buy recommendations that
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks April 5, 2011
Chevron Corporation (CVX) Raise NPV to $154 a Share from $146 Symbol CVX Ebitda Next Twelve Months ending 3/31/12 (US$mm) 56,900 Rating Buy North American Natural Gas/Ebitda (%) 2 Price ($/sh) 108.23 Natural
More informationU.S. Independent E&Ps
Americas/United States Equity Research Oil & Gas Exploration & Production Research Analysts Mark Lear, CFA 212 538 0239 mark.lear@credit-suisse.com Edward Westlake 212 325 6751 edward.westlake@credit-suisse.com
More informationRigs N' Reserves: The Week Ahead In North American Energy
I N S T I T U T I O N A L E Q U I T Y R E S E A R C H Jon Morrison 1 (403) 216-3400 Jon.Morrison@cibc.com Daine Biluk 1 (403) 260-8675 Daine.Biluk@cibc.com Jefferson Campbell 1 (403) 260-8660 Jefferson.Campbell@cibc.com
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks January 7, 2014
Six-Year Futures in 2014 Oil Up, Natural Gas Up More Summary and Recommendation Meter Reader We call six-year futures of oil to increase to $90 a barrel in 2014 from $82 today and six-year futures for
More informationEnhance Performance with McDep Ratio
Meter Reader Page 1 Enhance Performance with McDep Ratio Summary and Recommendation The McDep Energy Portfolio differentiates among buy recommendations in an attempt to be more represented in lowest McDep
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks January 29, 2013
Improved Crude Oil Price Outlook North American Advantage Summary and Recommendation An uptrend in long-term oil price and reduced geographic differences may benefit oil and gas producers in 2013, including
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks October 21, 2014
Cimarex Energy (XEC) Strong Independent Producer Meter Reader Symbol XEC Ebitda Next Twelve Months ending 9/30/15 (US$mm) 1,646 Rating Contrarian Buy North American Natural Gas/Ebitda (%) 30 Price ($/sh)
More informationIndependent Stock Idea Intraday March 1, 2018
EOG Resources (EOG) Raise NPV to $130 on Production Independent Stock Idea Symbol EOG Ebitda Next Twelve Months ending 3/31/19 (US$mm) 8,500 Rating Natural Gas/Ebitda (%) 9 Price ($/sh) 100.82 Natural
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks July 15, 2014
Whiting Petroleum (WLL) Agrees to Acquire Kodiak Oil & Gas Symbol WLL Ebitda Next Twelve Months ending 6/30/15 (US$mm) 2,552 Rating Buy North American Natural Gas/Ebitda (%) 4 Price ($/sh) 84.58 Natural
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks November 12, 2013
Cimarex Energy (XEC) Raise NPV to $125 on Permian Productivity Symbol XEC Ebitda Next Twelve Months ending 9/30/14 (US$mm) 1,509 Rating Buy North American Natural Gas/Ebitda (%) 24 Price ($/sh) 105.10
More informationIndependent Stock Idea Intraday August 7, 2018
Dorchester Minerals, L.P. (DMLP) Q2 on Trend Independent Stock Idea Symbol DMLP Ebitda Next Twelve Months ending 6/30/19 (US$mm) 66 Rating Natural Gas/Ebitda (%) 43 Price (US$/sh) 18.45 Natural Gas and
More informationOil Services & Equipment When Flat Is Only OK; 2Q13 U.S. Upstream Capex Update
INDUSTRY NOTE USA Energy When Flat Is Only OK; 2Q13 U.S. Upstream Capex Update Key Takeaway We are updating our 2013 upstream capex review from last week. 40 U.S. focused E&P companies, with $66.4B in
More informationMeter Reader A Weekly Analysis of Energy Stocks Using the McDep Ratio February 15, Crude Awakening
Crude Awakening Summary and Recommendation Declining production from Mexico s largest oil field, Cantarell, fortifies concerns about future oil supply. A timely discussion in the Wall Street Journal on
More informationIndustry Idea Analysis of Oil and Gas Stocks January 13, 2016, Intraday
Large Cap Independent Producers Wild Markets in Oil and Securities Present Value by Segment (%) Price North Rest of Dist. (US$/sh) EV/ Enterprise Amer. World Yield Symbol/Rating 13-Jan Market Value Natural
More informationwhere we stand where we are going
where we stand where we are going J.P. Morgan 2018 Energy Conference June 18-19, 2018 Forward-Looking Statements and Other Disclaimers This presentation includes forward looking statements within the meaning
More informationElizabeth May - - Do not forward
OIL AND GAS Mid & Small Cap E&P Market Weight 3Q preview: Prisoner s dilemma for SMID-Cap E&P? Delicate balancing act between positive OPEC commentary and a litany of risks We have noticed that the tug
More informationRaise Present Value for Independent Producers
Raise Present Value for Independent Producers Summary and Recommendation Recommended Encana Corporation (ECA), Burlington Resources (BR) and Anadarko (APC) appear to be among the most attractive of large
More informationInvestor Update Hunt Acquisition
Investor Update Hunt Acquisition January 2, 2018 Investor Presentation November 2016 Nasdaq Ticker: PVAC Forward Looking and Cautionary Statements Certain statements contained herein that are not descriptions
More informationPREVIEW FundamentalEdge Report April 2018
THE PERMIAN BASIN PREVIEW FundamentalEdge Report April 2018 learn more at drillinginfo.com Contents This is a PREVIEW of a 40+ Page Report INTRODUCTION AND KEY TAKEAWAYS 03 UPSTREAM ANALYSIS 04 Rig Count
More informationOil & Gas - Integrated and E&P
Oil & Gas - Integrated and E&P Crude Oil Rally Implications: Integrateds, Large Caps, and Dividend-Paying E&Ps OUR TAKE: This report includes a preliminary analysis of the potential impact of strengthened
More informationIndustry Idea Analysis of Oil and Gas Stocks August 20, 2018
Small Independents Strategic Value, Uncertain Price BIREF, CRC, RRC, WLL Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 20-Aug Cap Value Market Ebitda Ebitda Ebitda
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks May 14, 2013
EOG Resources (EOG) Raise NPV to $180 on More Big Wells Symbol EOG Ebitda Next Twelve Months ending 3/31/14 (US$mm) 7,400 Rating Hold North American Natural Gas/Ebitda (%) 12 Price ($/sh) 133.66 Natural
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks April 17, 2012
ConocoPhillips (COP-W) Largest North American Independent Producer Debut Symbol COP-W Ebitda Next Twelve Months ending 3/31/13 (US$mm) 22,500 Rating Buy North American Natural Gas/Ebitda (%) 5 Price (US$/sh)
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks December 29, 2009
Woodside Petroleum Ltd. (WOPEY) Australian Liquefied Natural Gas (LNG) Symbol WOPEY Ebitda Next Twelve Months ending 12/31/10 (US$mm) 2,900 Rating Buy North American Natural Gas/Ebitda (%) 2 Price (US$/sh)
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks May 1, 2012
Royal Dutch Shell (RDS/A) LNG and GTL Profit Gains Meter Reader Symbol RDS-A Ebitda Next Twelve Months ending 3/31/13 (US$mm) 58,500 Rating Buy North American Natural Gas/Ebitda (%) 2 Price (US$/sh) 71.54
More informationInvestor Update. June 2015
Investor Update June 2015 Cautionary Statement Regarding Forward-Looking Statements This presentation includes certain forward-looking statements and projections of EP Energy. EP Energy has made every
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks December 20, 2011
Centenarians Win Large Cap Race in 2011 Summary and Recommendation In the 100 th anniversary year of the breakup of the Standard Oil Trust, the separate companies and their Anglo-Dutch rival delivered
More informationIndependent Stock Idea February 2, 2018
ConocoPhillips (COP) Raise NPV to $80 on Higher Cash Flow Independent Stock Idea Symbol COP Ebitda Next Twelve Months ending 12/31/18 (US$mm) 14,200 Rating Natural Gas/Ebitda (%) 23 Price (US$/sh) 59.35
More informationIndependent Stock Idea June 6, 2018
Royal Dutch Shell (RDS) Bright Future in Integrated Gas Independent Stock Idea Symbol RDS-B Ebitda Next Twelve Months ending 6/30/19 (US$mm) 58,200 Rating Natural Gas/Ebitda (%) 24 Price (US$/sh) 71.79
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks January 3, 2012
Shale Deals for DVN/Sinopec and TOT/CHK Summary and Recommendation Buy-recommended Devon Energy (DVN) will receive $2.2 billion from China oil company Sinopec and Buy-recommended Total (TOT) will pay $2.3
More informationMeter Reader Page 1 A Weekly Analysis of Energy Stocks Using the McDep Ratio August 15, Unchanged Thesis
Meter Reader Page 1 Unchanged Thesis Summary and Recommendation Despite a momentous oil shutdown in Alaska and a Hezbollah-Israeli war in the Middle East, our oil and gas investment thesis is unchanged.
More informationUS oil and gas reserves study
US oil and gas reserves study 2016 Table of contents Study overview 1 Industry backdrop and study highlights 2 Capital expenditures 3 Revenues and results of operations 4 Oil reserves 6 Gas reserves 7
More informationOwn More Norsk Hydro, Less BP
Meter Reader Page 1 Own More Norsk Hydro, Less BP Summary and Recommendation Among European buy recommendations we raise our suggested weighting for Norsk Hydro (NHY) to 2.9% from 1.4% and lower it for
More informationMeter Reader A Weekly Analysis of Oil and Gas Stocks September 16, 2014
Royal Dutch Shell plc (RDSA) Ben s Growth Strategy Symbol RDS-A Ebitda Next Twelve Months ending 6/30/15 (US$mm) 54,400 Rating North American Natural Gas/Ebitda (%) 3 Price (US$/sh) 77.69 Natural Gas and
More informationOil & Gas Industry & Market Statistics
Oil & Gas Industry & Market Statistics RIVINGTON HOLDINGS, LLC HOUSTON, TEXAS Market information presented herein is based on 1/13/2017 closing prices. The information provided herein is believed to be
More informationMeter Reader Page 1 A Weekly Analysis of Energy Stocks Using the McDep Ratio August 7, Buy Something
Meter Reader Page 1 Buy Something Summary and Recommendation Because nothing has happened to change our long-term fundamental outlook from three weeks ago when the median buy recommendation was priced
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks April 16, 2013
Chevron (CVX) Deflation Resistance Symbol CVX Ebitda Next Twelve Months ending 3/31/14 (US$mm) 50,800 Rating Hold North American Natural Gas/Ebitda (%) 2 Price ($/sh) 116.57 Natural Gas and Oil Production/Ebitda
More informationOccidental Petroleum California Oil Story Could Get More Interesting
EQUITY RESEARCH COMPANY UPDATE April 30, 2012 Stock Rating: OUTPERFORM 12-18 mo. Price Target $125.00 OXY - NYSE $91.22 3-5 Yr. EPS Gr. Rate NA 52-Wk Range $117.89-$66.36 Shares Outstanding 811.1M Float
More informationQuarterly Results and the Correlation
Quarterly Results and the Correlation Summary and Recommendation During this cycle of quarterly earnings disclosures, we have referred to a correlation in our quick analyses for most rated stocks. Specifically,
More informationIndustry Idea Analysis of Oil and Gas Stocks October 23, 2018
Rising Distributions CRT, DMLP, PBT, SBR, SJT Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 22-Oct Cap Value Market Ebitda Ebitda Ebitda NTM Ratio 2018 (US$mm)
More informationIndustry Idea Analysis of Oil and Gas Stocks Intraday August 28, 2018
Roll Forward and Simplify CRT, DMLP, PBT, SBR, SJT Price Oil Dist. (US$/sh) Market Enterprise EV/ EV/ PV/ Prod'n/ Yield McDep Symbol/Rating 28-Aug Cap Value Market Ebitda Ebitda Ebitda NTM Ratio 2018 (US$mm)
More informationMeter Reader Special Mid-Year Ranking of Oil and Gas Stocks July 2, 2018
Outperformance in First Half 2018 Attractive Value, Auspicious Momentum Summary and Recommendation After outperforming in the first half of 2018, oil and gas stocks stay at attractive value with the median
More informationRevisiting U.S. Crude Oil Production Economics Crude Oil Going to $60? Sell E&Ps! December 2, 2016
Macro/Thematic Report Revisiting U.S. Crude Oil Production Economics Crude Oil Going to $60? Sell E&Ps! Contents Production Economics 2 Investment Themes 17 Appendix A: E&P Slides 31 Appendix B: Bankruptcies
More informationMeter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks February 28, 2012
ConocoPhillips (COP Buy) Shale Oil Growth with Alaska Upside Symbol COP Ebitda Next Twelve Months ending 12/31/12 (US$mm) 28,100 Rating Buy North American Natural Gas/Ebitda (%) 5 Price (US$/sh) 76.43
More information