Glad to see an E&P board; nice work PG.
When Cross Timbers/XTO took $179 MILLION in cash and purchased other E&P companies stock - it got my attention ! I was looking to diversify a bit from my driller & service stocks and after researching here, found perhaps a better case being made for bottoms here than in the drillers. Also as far as pure value, there are some great buys based on proven reserves, future & present drilling projects, EPS growth and most importantly cash flow valuations. It is my understanding here that 5-9 x cash flow is the historic valuation for E&P stocks. With soft crude & natural gas prices I would expect the values to be on the low side, but some companies like CWEI are now @ 1 1/2 x cash flow - a super buy imho.
Looking to learn here & hopefully other posters can add to the list of companies I'm watching and add news items as they appear. I actually enjoy the E&P boards a little more, as there appears to be a lot of industry people posting, lots of comments on pending exploration projects etc. We have companies with some speculative but dramatic potential finds like SU, CPMNY & SPPTY with the Australian Oil shale project, EQTY with a potential Russian play, FEN with Australia and VPI & TGLEF with a Yemen play. The Columbian situation with SEV & HEC - which are perhaps even more speculative in light of OIL not getting an acceptable offer for their Columbian assets... We have some strong insider buying in a few companies; which with E&P companies due to the dramatic valuation potential of a major find; must be paid attention to. Seeing strong insider buying in VPI, POG, PGEI, MEXP, APA,UPR, and the controversial CHK...
One could not ask for a faster paced, more interesting and potentially high return sector than the small/mid-cap E&P companies. I see alot of boards with hit & miss posting - maybe we can duplicate what Strictly Drilling has done; become the main source for the sector, but yet the individual companies with huge followings can of course use their individual sites for more elaborated discussion and reparte'...
I've bought APC, NBL and SGO as major positions and CWEI, PGO, FEN, BSNX,THX, VPI, EEX, EPEX in small/mid caps. I like BEXP, MEXP, PGEI & WZR here as well. SGO is my favorite ''homerun'' play as they may be the most undervalued & a buyout candidate. Long term I really like VPI & THX in smaller names.
For what it's worth some research points I place alot of value on are:
These 2 Oil Analyst's are ''Hall of Famers''
top Analyst Fadel Gheit's top picks are SGO (the most undervalued stock-bar none), EEX - of whom he says their CEO Hamilton is the #1 man in the Oil business.
Top Analyst Levy of Jeffries & Co. top picks are COHO, AXAS, EPEX - who he calls the ''silicon valley'' company , as they are the hi-tech leaders in seismic & software E&P programs...
DLJ 's highly regarded Oil guys like - BR, NBL,UPR, FEN, XTO, NFX, UCL
T Rowe PRice's analysts list - BR, UPR,POGO,OEI
1st call has RGO, TMBR, FEN, CHK as companies leading EPS growth
And a DLJ list on those growing cash flow to the greatest degree has -- THX, EOG, BELW, PXD, NFX,UCl & UPR in that order
A poster on Yahoo (robry) on the CWEI & other E&P boards does a weekly ''value'' list based on REPS (see the CWEI - Yahoo board) listing HCRC, CWEI, WZR, SAB, POG, BELW, MOIL, ORX, EQTY, and VPI
Good Luck all; lets exchange some ideas and make some money ! I think we are at the bottom +/- 5-10% up and down as we base and crude & natural gas prices stabilize. Nice thing here is that even in the face of falling crude or gas prices - one big find can send a stock skyrocketing or a successfull project like Anadarko just had can send a larger cap up 10-15% in a day in a soft market; this isn't happening in the driller & service sector currently - there is not this type of catalyst other than an outright purchase of a company.
Lets get readddddy to RRRRRRRRumble ! |
