Conoco (COC) - The biggest U.S. IPO ever Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Conoco (COC) - The biggest U.S. IPO ever

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Dennis Roth	6/27/2007 9:07:12 AM
	of 123

Venezuela exit unfortunate but not surprising; no change to view Goldman Sachs June 27, 2007 News Consistent with recent press reports, ConocoPhillips confirmed after the close on June 26 that it was effectively leaving Venezuela following an unsuccessful negotiation between it and the Venezuelan government to move to the Empress Mixta structure mandated by recent Venezuelan law. As part of its exit, Conoco also announced that it would take a $4.5 billion impairment charge for its interests in the country. The company continues to negotiate with Venezuela regarding compensation for its interests and is retaining all legal options including potential international arbritration. Analysis The news while disappointing is hardly surprising. Given that the Venezuelan government had been steadily tightening fiscal terms for foreign oil contractors in recent years, we think few on the Street were still ascribing much by way of value for Conoco's interests in the country, including us. We see Conoco's exit as having minimal impact on our projections or valuation for its shares. We believe Conoco is likely to receive some value for its interests at some future date, though we would be surprised if any cash received will be material to its shares. Implications Our Neutral rating on Conoco shares and preference for other energy companies at this time has not been related to uncertainty over Conoco's Venezuela position, as we think that stopped mattering in any meaningful sense for its stock price some time ago. Rather, we believe renewed confidence that Conoco has a sound plan to improve returns on capital employed versus peers is the key to us having a more favorable view on its shares (see previous research). Our estimates and price target are unchanged.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next