OXY: Occidental Petroleum Corp Message Board

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Gold/Mining/Energy : OXY: Occidental Petroleum Corp

OXY 40.26

-0.8%

10:15 AM EDT

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From: Dennis Roth	1/11/2008 5:06:37 AM
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Occidental Petroleum Corp. (OXY): Oxy no longer in running for Shah sour gas project in UAE - Goldman Sachs - 01-10-08 News Occidental Petroleum has confirmed reports that it is no longer in the running for the Shah sour gas project in the United Arab Emirates. Analysis We believe investors have been waiting for Oxy to announce 1-2 new projects in the Middle East, with the Shah sour gas project a particularly visible potential addition to its portfolio. As such, we think there will likely to be some near-term disappointment that it was not awarded this development. We note that Oxy continues to have a leading position in the Middle East and we believe will gain its share of projects in the region in the future. Implications We continue to have a favorable fundamental view of Oxy's long-term outlook but see near-term risk/reward for its shares as less favorable given the generally strong performance of Oxy shares and the integrated oil sector in recent months. There is no change to our Neutral rating, $71 12-month price target, nor our 2007-2012 EPS estimates for Oxy, as we had not previously explicitly included any value for this project. With that said, there is also now no reason to raise our price target to the extent this project is no longer likely to be added to its portfolio. Our price target is based on asset value, P/E, and cash-flow valuation analyses, with the key risk being sustained lower commodity prices.

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