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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 (184014)	5/23/2014 9:26:27 AM
From: Dennis Roth	1 Recommendation Recommended By LoneClone Read Replies (1) \| Respond to of 206135

COP, CVX, Eurasia Drilling, ENBL, NBL, NEE, Nostrum Oil, RICE, TMK, XOM, European Oils US EIA Petroleum Statistics ConocoPhillips (COP) A Poster-Child for the “Stand and Deliver” Generation 21 May 2014 ¦ 28 pages ir.citi.com We transfer coverage of COP to Alastair Syme as Citi moves to global coverage of Big Oil. The re-focused COP that has emerged over the last two years looks well positioned for the Stand and Deliver" phase of the industry cycle. Extensive positions in North American shale, the only Big Oil that has competed effectively in this space, powers 70% of COP’s expected medium-term growth and gives the flexibility to control capital and benefit from likely efficiency-gains. We think COP can deliver a 14% ROE (+200 bps vs peers) and grow book value at 9% p.a. (peers at 7%) to 2018. A valuation of 1.3x end-17E book, a discount to most Big Oil peers, looks rooted in market prejudice around the capital allocation of COP of old, not the new re-focused, shale-powered COP of this generation. We raise the price target from $85 to $100/share. Chevron (CVX) Improving Execution Bodes Well 21 May 2014 ¦ 20 pages ir.citi.com We transfer coverage of CVX from Faisel Khan to Alastair Syme as Citi moves to global coverage of Big Oil. Our investment rating (Buy) is unchanged as is our target price of $141/share, but we raise 2014/15 by an average of 6% to incorporate new oil prices forecasts from Citi’s Commodity Team. We think CVX has been the synthesis of our Stand and Deliver thesis for the industry, with high capital intensity and project execution issues combining to see ROE fall from 29% to 13% since 2007. But we think the future is now brighter, with better execution, growth in book value and stabilising ROE (at around 12%). With a valuation of 1.2x end-17 book market suggesting to us the market is continuing to discount delivery, Eurasia Drilling (EDCLq.L) New long-term contract with Gazprom Neft - implications 22 May 2014 ¦ 7 pages ir.citi.com New long-term agreement with Gazprom Neft: According to EDC, the agreement covers a three-year period beginning Jan 2014 and includes a pricing formula and a minimum guaranteed number of active rigs for onshore drilling and sidetracking in Russia. Volumes and pricing will be adjustable, with the consent of both parties, in line with changing market conditions. According to Gazprom Neft, EDC is expected to provide 25-30% of its total drilling volume going forward. Enable Midstream Partners LP (ENBL) Stable Diversified Midstream & Pipeline Assets; Initiating at Neutral 21 May 2014 ¦ 46 pages ir.citi.com Noble Energy Inc (NBL) Alert: Woodside Bows Out of Leviathan JV 21 May 2014 ¦ 7 pages ir.citi.com NextEra Energy Inc (NEE) Alert: YieldCo – S-1 with Incentive Distribution Right (IDR) Fees Disclosed 20 May 2014 ¦ 7 pages ir.citi.com Nostrum Oil & Gas (NOGNq.L) Proposed Premium Listing Tackles One of the Two Prerequisites to Potential Re-rating 20 May 2014 ¦ 7 pages ir.citi.com Rice Energy Inc (RICE) Q1’14 Wrap-Up: Adjusting Estimates And Raising Price Target 20 May 2014 ¦ 13 pages ir.citi.com TMK (TRMKq.L) 1Q14 IFRS preview – A tough quarter expected 21 May 2014 ¦ 7 pages ir.citi.com Citi's Take: TMK is set to release its 1Q14 IFRS results this Friday, May 23rd, followed by a call at 5pm Moscow time, 2pm London. We forecast that TMK will report $1.45bn of revenues, $194mn of EBITDA, and $12mn of net income, with the latter number depressed due to an expected $25mn FOREX charge from a weakening ruble’s effect on the company’s c$3.5bn net debt position. Exxon Mobil Corp (XOM) Premium Returns, Although Advantage Eroding 21 May 2014 ¦ 19 pages ir.citi.com We transfer coverage of XOM from Faisel Khan to Alastair Syme as Citi moves to global coverage of Big Oil. Our investment rating (Neutral) is unchanged, but our target is revised from $108 to $102/share, aligning our target price methodology (DCF) to the approach we use for peers, and we lower EPS by an average of 6% to reflect higher depreciation. XOM’s business model has stood it well in the last cycle with a combination of: (1) selective investment and, (2) good project execution seeing ROE average a steady +600 bps premium versus peers over the last five years But peers are trying to follow, and the XOM portfolio does not look differentiated enough to maintain that ROE premium, in our view. We see the gap closing to around +300bps by 2018 = 15% against which a valuation of 2.1x end-17E book does not look under-appreciated by the market. European Oils Raising 2014E/15E oil prices and adjusting exchange rates 21 May 2014 ¦ 47 pages ir.citi.com Raising oil price assumptions to new Citi commodity forecasts, raising EPS by c.4% in 2014E and 9% in 2015E 1Q14 highlighted stabilising earnings and returns — Central to our “Stand and Deliver” thesis for Big Oil is a belief that after several years of sharp deterioration earnings and returns for the group are now starting to stabilise. Equity winners should be those with portfolios capable of delivering profitable growth, who US EIA Petroleum Statistics Is a well-supplied US pushing back at crude imports? 21 May 2014 ¦ 27 pages ir.citi.com Another low for imports may suggest the US is backing out more crude, substituting it with US and Canadian supply. EIA is likely understating exports, meaning net oil imports could be as low as 5-m b/d, down 2-m b/d y/y. PADD III imports fell to 2.8-m b/d; if ~3-m b/d import levels are sustained, PADD III stocks can tighten into the summer, although light crude availability may still be ample. Cushing stocks drew 225-k bbls to 23.2-m bbls, the lowest since December 2008.