| | | CLNE, CNQ, Japan Petroleum Exploration, KAR.AX, PBR, PetroChina, PFC.L, PGN.WA, PGS.OL, ROSE, RRMS, XEC,
Commodity Price Deck for Utility Equities,
OT: Citi Focus List US,
OT: SMID Cap “Rap”
Clean Energy Fuels Corp (CLNE)
Volume Up but Cold Winter Drags on Earnings; Neutral
11 May 2014 ¦ 8 pages ir.citi.com
Bottom Line – Earnings in 1Q were largely in-line with our estimates as higher than
expected fuel volumes offset slightly weaker margins. CLNE reported 59.3M GGE
of natural gas fuel sold in 1Q, a 24% increase vs. 1Q13 (on an adj. basis)
Canadian Natural Resources Ltd (CNQ)
Q1’14 Wrap-Up: Growth On Track; Open House Next Month
9 May 2014 ¦ 15 pages ir.citi.com
Japan Petroleum Exploration (1662)
Q4 results—positive, FY3/15 plan ahead of expectations
12 May 2014 ¦ 7 pages ir.citi.com
Karoon Gas Australia Limited (KAR.AX)
Equity Raising Likely; Our Thoughts and Questions
12 May 2014 ¦ 8 pages ir.citi.com
KAR went into a trading halt on the 1st May pending an announcement about its
funding position, and stated on the 12th May (when it was meant to come out of
trading halt) that it plans to update the market by 19th May. While we cannot be
exactly certain of specifics, media reports (AFR) have suggested KAR is looking
to raise US$200m equity. We have reviewed a scenario of a A$200m raising at
A$2/shr, and delayed asset sales. Raising equity at current levels would be more
dilutive than asset sales we had assumed to fund further appraisal, hence this
scenario could reduce our risked DCF by ~20% from A$5.88/shr to ~A$4.70/shr,
still representing significant upside to current share price.
Dale Koenders | James Byrne | Vishesh Pachnanda
Petrobras (PBR)
Q1 results in line with expectations, but stock performance remains driven by Brazil’s macro agenda – Maintain Neutral
12 May 2014 ¦ 10 pages ir.citi.com
Citi’s view — Results were in line, though recurring operating cash flow remained
poor at -R$11.4bn vs. -R$7.6bn in Q4 in spite of full quarter higher fuel price
benefit. PBR raised R$54bn in new debt in Q1 enhancing its cash to R$79bn,
which secures the execution of its 2014 budget at current operating cash flow
rate. The stock is up 16% since April (vs. IBOV 7%) driven mostly by Brazil’s
electoral poll results that indicate growing chances of a government change.
While we acknowledge a change may lead to improvements to PBR governance
and results, we continue to be cautious on the back of the stock rich EV valuation
multiple at fuel parity pricing and see lower room to improve current FCF forecast
by 2018. We expect Brazil’s macro agenda to continue driving volatility to PBR.
Pedro Medeiros | Fernando Valle
PetroChina (0857.HK)
Another Pipeline Asset Sale in Progress
12 May 2014 ¦ 7 pages ir.citi.com
Petrofac (PFC.L)
IES headwinds
12 May 2014 ¦ 8 pages ir.citi.com
We lower our 2014 EPS by 13% and 2015-17e on average by 6% to reflect the
lower contribution from IES. As a result of the slower expected pace of
investment, we reduce forecast IES capex by 20% 2015-17e. Consequently, we
lower our DCF-based price target by 3% to £14.75. We acknowledge the ongoing
risks of delivery on Greater Stella, but feel a 25% discount to the sector on 8.9x
2015e PE more than compensates. We maintain our Buy rating.
Ryan W Kauppila | Nikhil N Gupta
Polish Oil & Gas (PGN.WA)
Better-than-expected 1Q14 results
9 May 2014 ¦ 8 pages ir.citi.com
Citi's Take — PGNIG reported solid 1Q14 with EBITDA, EBIT and net profit
coming in at ZL2,181m, ZL1,558m and ZL1,180m respectively beating
consensus by 10-14%. Although the results were clean in terms of accounting
one-offs, the external environment especially with regards to warm weather was
unusual and it impacted divisional performance. Distribution and Generation
divisions have noticed significantly lower volumes, which was compensated by
improved margin in Mid-Stream business driven by falling European gas prices.
PGS (PGS.OL)
Difficult 1Q Seismic Market
12 May 2014 ¦ 8 pages ir.citi.com
PGS’s 1Q results reflected the challenging market conditions, as contract and
multi-client sales both came below our expectations. While we continue to
believe PGS’s is best positioned within the marine contract industry given its
larger, more capable fleet, that occurs in the context of the overall seismic
industry facing a slower rate of growth over 2014/15 than other development-
facing sub-sectors of oil services (e.g. offshore construction). We reduce 2014E
EPS by 6% and 2015-16E EPS on average by 12%. Accordingly, we lower our
Initiate at SellDCF-based price target from Nkr85 to Nkr75.
Ryan W Kauppila | Nikhil N Gupta
Rosetta Resources (ROSE)
Non-Op Permian Well Results Underscore Thesis;
Reiterate Buy Rating With >20% Upside To Our Revised $55 Target Price
11 May 2014 ¦ 18 pages ir.citi.com
We believe Rosetta is currently one of the more hotly debated Smid-cap E&P
stocks among bull and bear camps. While Eagle Ford production curtailments
could keep the company from achieving our 2Q forecast, our conviction in the
2H’14 outlook is strengthening. Importantly, we believe strong non-op Permian
well results flew under the radar; while Rosetta is due to release 4-8 operated
well results in August which could prove to be catalysts supporting NAV
accretion. We reiterate our Buy rating seeing more than 20% upside to our
slightly lowered target price of $55 (from $56).
John Nelson | Robert S Morris | Chingiz Gadimov
Rose Rock Midstream, LP (RRMS)
Strong Q1 but Future of Cushing Remains Uncertain
11 May 2014 ¦ 11 pages ir.citi.com
Cimarex Energy Co (XEC)
Market Expecting Positive 2H14 Guidance Revisions;
Raise Target Price To $129 And Maintain Neutral Rating
11 May 2014 ¦ 16 pages ir.citi.com
Cimarex reported an impressive quarter delivering production 4% above the top
of management’s guidance range and raising their full year outlook. With greater
inventory depth, production growth visibility and return expectations we are
adding ~1.0x to the Mid-Continent weighted portion of our target multiple. This
results in our aggregate target multiple moving to 7.0x (from 6.5x) which
alongside forecast revisions drives our target price to $129 from $113. We expect
the stock will trade well into Q2 results where guidance for a strong expected Q3
Permian production ramp will be supplied. We maintain our Neutral rating,
however, given our view that the bulk of the firm’s valuation gap to peers has
been closed and there being limited upside to our revised $129 target price.
John Nelson | Robert S Morris
Suburban Propane Partners LP (SPH)
2Q Beat On Strong Margins Despite Supply & Logistics Issues
11 May 2014 ¦ 10 pages ir.citi.com
Commodity Price Deck for Utility Equities
5-7-2014 Forward Prices for Utility Equity Modeling & Analysis
9 May 2014 ¦ 7 pages ir.citi.com
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OT: Citi Focus List US
9 May 2014 ¦ 7 pages ir.citi.com
OT: SMID Cap “Rap”
It’s Different This Time
9 May 2014 ¦ 18 pages ir.citi.com |
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