Zacks Industry Outlook Highlights: Chevron, SM Energy, EPL Oil & Gas,
Halliburton and CNOOC
CHICAGO, May 20, 2013
CHICAGO, May 20, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses
the U.S. Oil & Gas, including Chevron Corp. (NYSE:CVX), SM Energy Co.
(NYSE:SM), EPL Oil & Gas Inc. (NYSE:EPL), Halliburton Co. (NYSE:HAL) and CNOOC
A synopsis of today's Industry Outlook is presented below. The full article
can be read at
Considering the turbulent market dynamics of the energy industry, we always
advocate the relatively low-risk conglomerate business structures of the
large-cap integrateds, with their fortress-like balance sheets, ample free
cash flows even in a low oil price environment and growing dividends.
Our preferred name in this group remains Chevron Corp. (NYSE:CVX). Its current
oil and gas development project pipeline is among the best in the industry,
boasting large, multiyear projects. Additionally, Chevron possesses one of the
healthiest balance sheets among peers, which helps it to capitalize on
investment opportunities with the option to make strategic acquisitions.
Within the domestic exploration and production (E&P) group, we like SM Energy
Co. (NYSE:SM) and EPL Oil & Gas Inc. (NYSE:EPL). Supported by attractive oil
and gas investments, balanced and diverse portfolio of proved reserves,
together with development drilling opportunities, we expect the companies to
sustain their production growth and profitability over the foreseeable future.
Further, we remain optimistic on the near-term prospects of Halliburton Co.
(NYSE:HAL). The oilfield services behemoth -- among the top three players in
each of its product/service categories -- is enjoying strong demand for its
services in international markets and expects the trend to continue in the
coming years. Additionally, the company remains in excellent financial health
and has recently announced a 39% increase in its quarterly dividend.
China's CNOOC Ltd. (NYSE:CEO) is also a top pick. CNOOC remains well-placed to
benefit from the country's growing appetite for energy and the turnaround in
commodity prices. In particular, the company enjoys a monopoly on exploration
activities in China 's very prospective offshore region in addition to having
a growing presence in the country's natural gas and liquefied natural gas
(LNG) infrastructure. The recent acquisition of Canadian energy producer Nexen
Inc. will further improve CNOOC's growth profile by augmenting proven reserves
by 30%, while helping it to vastly expand its holdings in Canada.
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