Friday, August 22, 2014

Viper Energy Can Make You Profits But Can Also Bite

This article was originally published by TheStreet on August 18, 2014.
NEW YORK (TheStreet) -- You've heard of ranchers or land owners who receive royalty income by leasing their properties to oil and gas companies? So does Viper Energy (VNOM_) .
Viper Energy owns mineral interest in shale oil and gas properties, mainly in the prolific Permian Basin in West Texas. The company, which is structured as a master limited partnership, or MLP, generates its revenue by leasing these properties to energy producers, who bear all the operation and development costs and make royalty payments to Viper Energy on shale oil and gas production.

Antero's Growth Story -- What You Should Know Before Buying In

This article was originally published by TheStreet on August 13, 2014. 
NEW YORK (TheStreet) -- Very few energy companies have managed to consistently grow their production at over 50% over the last couple of years. Fewer still have given production growth forecast that exceeds 50%. A little-known shale gas producer which debuted on the stock market less than a year ago, Antero Resources (AR_), has managed to do both.
But is it a buy?
The shale gas boom in the U.S. is responsible for the creation of several energy companies. The biggest among them has been Chesapeake Energy (CHK_), the nation’s second-largestnatural gas producer, which holds nearly 13 million acres of land spread across eight states. However, the markets have rewarded companies that focus on producing from fewer but higher-quality assets, as Antero does.

Tuesday, August 19, 2014

Israel: Assessing The Cost Of War

This article was originally by Seeking Alpha on August 11, 2014.

Summary: Israel’s markets have shown resilience but optimism could evaporate if the war continues to drag. The conflict is now about as old as the 2006 Lebanon war. The country’s GDP growth could take a hit, but what about the nation’s biggest listed company Teva Pharmaceuticals? Can this war boost growth of Elbit Systems, Israel’s leading listed defense company?

The bloody conflict between Israel and Hamas rages on, despite cease-fires and truce talks. So far, more than 1,886 Palestinians and 67 Israelis have lost their lives. In addition to the tragic loss of life, it is becoming increasingly clear that the ongoing conflict could be one of the most expensive ones for Israel.

Market Resilience

Initially, Israel's stock markets reacted positively to operation Protective Edge. In the first ten days of the operation, Israel's two leading indices, the TA-100 and TA-25 climbed by 1.4% and 1.6% respectively. This could be due to a number of factors.

Firstly, the current situation is nothing new for the markets that have witnessed several military operations over the last ten years, from Operation Rainbow in 2004 to Operation Pillar of Defense in 2012.

Secondly, both indices, particularly TA-25, feature some of the biggest Israeli companies, such as the world's biggest generic drug maker Teva Pharmaceutical (NYSE:TEVA). These are global companies that do not depend heavily on Israel's market. For instance, in the first six months of this fiscal year, Teva Pharmaceutical generated more than 81% of its revenues from the U.S. and Europe while … read full article at Seeking Alpha

EOG Resources, a Shale-Powered Growth Story, Continues to Impress

This article was originally published by TheStreet on August 11, 2014. 
NEW YORK (TheStreet) – EOG Resources (EOG_) has become one of the top U.S. oil producers on the back of the shale oil boom, and it just keeps getting better.  
Last Tuesday, the company posted stellar quarterly results, with another double-digit increase in production, that reaffirm its growth story. The company also increased its dividend by 34% following a 33% increase earlier in February. This shows the management’s confidence in the company’s future growth. So far, over the last 15 years, EOG increased its dividend at an average of 23% in each year.
EOG shares are up 29.3% this year, currently hovering near $108. The company’s shares could continue to go higher on the back of increasing production and potential for growth from outside its core positions at Eagle Ford in South Texas and Bakken formation in North Dakota.

Sunday, August 17, 2014

Marathon Oil Is Poised to Benefit From Production Growth in U.S.

This article was originally published by TheStreet on August 07, 2014. 

By Sarfaraz  A. Khan
NEW YORK (TheStreet) -- Marathon Oil's (MRO_) revenue fell in the second quarter, but a deeper look inside its earnings report reveals that the company is on track to post double-digit growth from its core assets in the U.S.
In announcing its second-quarter results on Monday, Marathon said revenue fell 1.6% to $2.94 billion, partly because of asset sales. But earnings from continuing operations rose almost 50% to $360 million on a 9.1% increase in sales volume from continuing operations, excluding Libya, and on higher oil prices in the U.S.
Furthermore, Commerce Department has recently allowed Pioneer Natural Resources (PXD_)and Enterprise Product Partners (EPD_) to export condensates, a type of ultra-light crude oil. The government had banned all exports of crude oil since the 1970s.

Wednesday, August 13, 2014

Chevron’s Output Is Deteriorating -- So Should You Be Spooked?

This article was originally published by TheStreet, and also appeared on Yahoo! Finance, on August 5, 2014. 
NEW YORK (TheStreet) -- Chevron (CVX_) reported a drop in production in its latest quarterly results on Friday, as the company's shares dropped by more than 1% and still haven't fully recovered. (As of 1 p.m. Tuesday, shares were trading at $125.83.)
This could be a buying opportunity for long-term investors who consider the six major projects that could revive Chevron's flagging production growth within the next three years.
In terms of price-to-earnings ratio, a metric which is commonly used to measure valuation, with the latest stock price drop Chevron has now become the cheapest vertically integrated oil super-major, as compared to rivals ExxonMobil (XOM_), Royal Dutch Shell (RDS.A_)  (RDS.B_)BP (BP_)  and  Total (TOT_).

Friday, August 8, 2014

Halcon Resources Is Betting on the Last American Shale Oil Play

This article was originally published by TheStreet on August 4, 2014. 

By Sarfaraz A. Khan. Research Asst. Daniel L. 

Halcon Resources (HK_) has been getting most of its output from Bakken formation, but this could start changing from next year when the company will begin pumping oil from Tuscaloosa Marine Shale, or TMS, the last remaining major American unconventional oil play.


Halcon Resources is a small, independent energy company valued at $2.3 billion with significant operations at two shale formations: Bakken - Three Forks in North Dakota and El Halcon in Eagle Ford East Texas. Furthermore, Halcon Resources is one of the few oil producers that are betting big on the rise of TMS as a major shale oil play which stretches from South Louisiana to Southwest Mississippi.
Halcon Resources' shares ar up 38.2% this year, currently hovering around $5.50.

Thursday, August 7, 2014

Peabody Energy Is Still Mining for a Positive Long-Term Outlook

This article was originally published by TheStreet on July 25, 2014
NEW YORK (TheStreet) -- Peabody Energy (BTU_) released its quarterly results this week, managing to beat analysts' earnings estimate and painting a rosy outlook for the long term. But investors might still want to steer clear of this stock.
This is because Peabody Energy, the world's largest coal producer in the private sector, might continue to struggle as the current weakness in coal prices, currently at six-year lows, is expected to persist throughout the next couple of years. Moreover, the latest move by Obama administration to cut carbon emissions could further exacerbate the already tough business environment.