Is XOM worth a look at current levels?
Exxon Bets On Natural Gas
Posted: Dec 14, 2009
stocks.investopedia.com
From the article:"...Exxon is clearly making a strategic bet that the advantages of natural gas as an energy source will only become more valuable over time. Considering that Exxon is the largest oil major, this move should have a significant impact on the competition..."
McDEP's November 4, 2009 report had XTO NPV at $47.00/share.
mcdep.com
Summary and Recommendation
Analyzing third quarter results released today, we reaffirm estimated Net Present Value (NPV) of $47 a share for buy-recommended XTO Energy (XTO). On that basis unlevered appreciation potential is 8% to a McDep Ratio of 1.0 where stock price would equal NPV. Unlevered cash flow (Ebitda), earnings and oil and gas volume exceeded expectations in the latest quarter.
Here are the latest valuations for NG companies by the McDEP Group.
mcdep.com
CONOCOPHILLIPS (NYSE: COP) has the best valuation selling at .62 NAV (according to McDEP). I continue to like the NG sector.
Enerplus Resources Fund (ERF) might be a candidate with their recent Marcellus Shale Acquisition
finance.yahoo.com
From the article"...Enerplus Resources Fund ("Enerplus") is pleased to announce that it has entered into agreements with three private natural gas producers, Chief Oil & Gas LLC, Chief Exploration & Development LLC and a limited partnership managed by Tug Hill, Inc. (collectively "Chief"), to acquire 30% of their interests in the Marcellus shale natural gas resource play in the northeastern United States. Chief currently owns an average 72% working interest in approximately 540,000 gross acres, the majority of which is located in Pennsylvania within the heart of the Marcellus shale gas play. Upon completion of the acquisition, Enerplus will own an average 21.5% non-operated working interest in this acreage (approximately 116,000 net acres)...."
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The domestic NG pipeline companies seem to be the beneficiaries of today's XOM XTO merger.
EKS |
