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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (178099)	4/26/2013 8:47:36 AM
From: Dennis Roth	1 Recommendation Respond to of 206181

ConocoPhillips (COP) In Holding Pattern Until CF Generation Improves 26 April 2013, 6 pages doc.research-and-analytics.csfb.com Bottom Line: COP delivered around $4bn of underlying cashflow in 1Q, a $16bn run rate. COP has $5.4bn of cash on the balance sheet and $8.5bn+ of cash receipts from pending disposals to fund the dividend. The challenge is that capex and dividends could be c$21bn p.a. and cashflow could decline during the maintenance periods (e.g. middle of this year). How does COP aim to square the circle? By growing production and improving margins. In a constant environment cashflow could rise towards c$21bn. We believe COP shares are most likely to gain momentum as this cashflow growth becomes visible in 2014. In the meantime, we await news on Canadian disposals. COP need to deliver clarity on the next wave of shale growth and demonstrate an improving balance between mandatory project spend vs discretionary capital in the capex program.

To: Dennis Roth who wrote (178099)	4/26/2013 9:01:28 AM
From: Dennis Roth	1 Recommendation Respond to of 206181

Occidental Petroleum (OXY) The Tortoise (Vertical Drilling) versus The Hare (Hz Wells) 26 April 2013, 8 pages doc.research-and-analytics.csfb.com Bottom Line: OXY has made good progress reducing the costs of its drilling program. When you drill 1,000 wells per year, savings of $250k here and there quickly add up. In our Growth and Free Cashflow report we showed how a 15% reduction in well costs would generate free cashflow and growth outcomes consistent with a longer term $100/sh. On the call, OXY may have hit 19% unit cost reductions (consistent with $106/sh). OXY did not lower FY capex and signaled growth would be second half biased (notably in California) but unit cost reductions should eventually translate into improved returns.