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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Wowzer who wrote (67035)	5/26/2000 3:37:00 PM
From: Robert T. Quasius	Respond to of 95453

MRO is a steal according to Bear Stearns: From Bear Stearns - Fred Leuffer - Integrated Oil Sector Update We believe conditions are perfect for strong profits for integrated oils. This is a very unusual period?oil and gas prices and refining and marketing and chemical margins are all strong at the same time. This translates into big earnings gains. For 2000, we are estimating integrated oil profits should be up 62%. We think our estimates appear to be conservative?oil prices, gas prices and refining margins are all higher than what we have in the model right now. We think earnings revisions should continue to push the integrated oils higher. We highlight two stocks: Royal Dutch Petroleum ? (RD, Buy) and USX-Marathon Group (MRO, Buy). RD is ahead of schedule on their $4 billion cost-cutting program. We expect RD to extend that beyond this year and would not surprised to see a new $2 or $3 billion program announced at the end of this year. Last week, shareholders approved authorization for a share repurchases for up to 10% of shares outstanding for both RD and Shell Transport & Trading (SC, Buy). That is $20 billion. We believe the formula that should drive the stock higher will be 10% EPS growth , 4% annual dividend growth, and the share repurchase program. We think at this point, we believe MRO is at a give-away valuation. MRO trades at 4x our 2001E EBITDA, the cheapest of any integrated company. Oil and gas reserves that underlie MRO?s shares can be bought for less than $3/barrell. We believe we will see upside earnings surprises in Q2 and Q3. Margins are strong. We would expect around the fall, MRO will announce it will dismantle the tracking stock structure, which could add 4-6 points to the stock?s values. Also in 2H, MRO plans to drill 8 exploratory wells in the deep water.