Oil and Gas Ideas. Stolen from one sharp "SheShark" on the AOL board.
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VL update from last week
PBR - Long term profit prospects look bright and they should boost production 8 to 10% this year. Global prices are on the rise. They are looking for acquisitions to boost refining capacity and develop its exploration presence overseas. It is targeting the GOM and West Africa and expanding in South America. VL believes PBR is trading at a bargain valuation. It estimates a price appreciation potential from a low of 115% to a high of 215%.
MRO - Has good long term prospects. Completed acquisition off the coast of Equatorial Guinea added some additional debt but it will stabilize production and improve reserve replacement rates. Natural gas production from West African project may double within a couple of years. Will build a receiving plant for natural gas shipments in Mexico. In a joint venture with Ashland to provide leverage to refining margins. Moderately higher oil and gas
production, better energy prices, and some exploration success may bolster earnings that would support a high stock price and a heftier cash dividend. VL estimates a price appreciation potential from a low of 55% to a high of 120%.
IMO - I am selling this stock ; long term prospects are very good but it will take time for this to significantly appreciate.
DYN - Has been hurt by the Enron scandal and breach of contract, a negative rating from Moody's and a weak gas and power market. These issues will be resolved and energy prices should move up in the second half of the year, DYN should make significant advances. They should take control of the Natural Gas Pipeline from Enron by midyear. VL believes DYN has substantial recovery potential and estimates a price appreciation potential from a low of
125% to a high of 225%.
EPD - Good income stock; not much in terms of price appreciation but plans on expansion of assets and acqusitions which will add to their growing the dividends by 10 to 20% annually. VL believes that the growth prospects are very promising. Good natural gas provider with a solid growing dividend. Buy target around $23.
NFG - Good quality, stable income stock.
OEI - Is heavily impacted by O&G prices. Will have near term weakness but will have good long term earnings. VL estimates a price appreciation potential from a low of 55% to a high of 130%. A buy on dips. Buy target in the $16 to $17 range.
POG - Had record production last year and may exceed its 10% growth target in '02. They have to take a write off in charges related to hedges with Enron. Earnings may be under pressure in 2002 but will reduce capital spending and long term debt. They have a strong cash flow picture and a lucrative asset base which bode well for good long term prospects. VL sees a price appreciation potential from a low of 55% to a hihg of 125%. Buy target $25 to
$26.
TPP - Good income stock; pays a large dividend (7.3%) and will likely continue to increase it. Is probably fully valued at present. Watch to buy on dip. Buy target below $30.
VPI - pure speculative play here. VL believes it has a price appreciation potential from a low of 70% to a high of 155%. Had a loss in Q4, has cut its acquisition budget, and will limit spending. They had problems with bad drilling decisions in Canadian projects but are trying to resolve those now. Also have some problems in Argentina when the currency was devalued and passed a 20% export duty on crude which will hurt the bottom line. However,
VPI is paid in dollars for its exports. They have a new pipeline in Ecuador which is scheduled to open next year and this would add to their output. They are have holdings in Yemen, Trinidad, and Bolivia which could add 40% to reserves for the next few years. Rumors of being a takeover target. VL believes VPI will resolve the problems and could have strong appreciation.
XTO - Has good near term and long term prospects, a strong cash flow and lucrative asset base. VL esitmates a price appreciation potential from a low of 55% to a high of 130%. They had record cash flow in '01. Production increased primarily from development in East Texas and the Arkoma and San Jaun basins. They have bugeted 400M for capital spending, mostly in East Texas. Production growth is targeted at 20%. They have a strong hedging position
(80% of '02 gas production is hedged at a NYMEX price of $3.88 per Mcf) which insulates its cash flow from low commodity prices.
Sharon
Do your own due diligence before making any investment decision. |
