EXXI...returning to my focus watchlist as of this evening
Why Energy XXI Could Pump Up
Oil stocks have dropped as the price per barrel has retreated. Among the big losers: shares of small oil and gas explorers, such as Energy XXI (Bermuda) (EXXI), whose assets are concentrated in the Gulf of Mexico and Southern Louisiana. On Aug. 13, Energy's stock sank to 4.58, down from nearly 8 in May. Even so, David Adams of investment firm Jefferies (it has done business with Energy )rates it a buy, with a target of 8.50, based on Energy's proved and probable reserves. "EXXI offers an attractive valuation with substantial upside via exploration," says Adams.
Kelli Francis of researcher John S. Herold puts Energy's total proved reserves at 55.6 million barrels of oil equivalents as of June 30, 2007. She sees production rising to 9.5 million bbl. in 2008 and 10.5 million in 2009, up from 2007's 5.9 million. Francis forecasts earnings of 51 cents a share in 2008, vs. 29 cents in 2007.
Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
Marcial writes the Inside Wall Street column for BusinessWeek. In 2008, FT Press published the book Gene Marcial's 7 Commandments of Stock Investing.
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