Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

UAE- Oil and gas deal and story shares  Join our daily free Newsletter

MENAFN - Khaleej Times - 25/08/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) The euro has now fallen to 1.3420, more than 200 points below my strategic recommended short level at 1.3650. Cable was, as I thought, last week vulnerable to the euro's fall and extreme position in base rate hike expectation dashed by the Bank of England minutes. The Canadian dollar has plunged from my 1.0730 sell level to 1.0820. Dollar/yen was an ideal buy at 101.30. Energy has been my favourite theme in 2014. Cheap valuations, credible EPS growth, money-flow momentum, Middle East/Russia geopolitical risks, inflation hedge and deal talk/restructuring (Oxy, Anadarko, Apache) all reinforce my enthusiasm for the sector.

Occidental Petroleum, a firm with a major UAE footprint via its stake in the Dolphin Project and the Shah oilfield, was founded by legendary wildcatter Armand Hammer and discovered epic gushers in Alaska, Libya and the North Sea. Oxy is a firm in transition as it slashes its noncore businesses, spins off its California operations to focus on drilling in Texas shale, where it is the largest producer in the Permian Basin. The real ballast for Oxy will be the divestiture of its high risk, low-return Middle East and Africa projects, midstream/pipeline assets in a quest to reduce both geopolitical risk and corporate debt. Since global E&P firms trade at significant valuation discounts to pure-play US producers, Oxy is a candidate for a valuation rerating, given it trades at a significant discount to NAV. Oxy's assets in the Arab world are in Iraq, Libya, Qatar, Oman, the UAE and Yemen. Occidental's value zone is in the 95-98 range for a 108 target for me or 13 times earnings as I expect both a rise in free cash flow/accelerate share buybacks and a secular rise in dividend growth.

Apache has been a beauty since February, when the shares traded at 78. Apache has sold one-third of its oil and gas fields in Egypt's Western Desert to Sinopec and will now sell almost a billion dollars in Argentina assets. I had profiled Apache as one of America's most attractive E&P firms since 2013 and Apache has vindicated my faith, up 28 per cent in the pastfour months. Like Oxy, Apache is ramping up reserves/production in the Permian Basin in West Texas. However, unlike Oxy, I believe the valuation rerating in Apache is behind us. The time to buy Apache was three month ago at 80-85, not now when the rerating is over.


Chevron has been another Big Oil/Seven Sister supermajor I often profiled in this column. Chevron has also been an outperformer on Wall Street, up 18 per cent since last February at 134. Chevron, to me, was attractive due to its incredible exposure to some of the planet's most attractive energy themes, from Australian LNG (Gorgon/Wheatstone), Gulf of Mexico deepwater drilling, Angola, the Caspian, Marcellus/Permian Basin shale, Brazil, Southeast Asia. I was stunned by the Q2 daily production data, 2.562 million barrels of oil equivalent with some of the most attractive upstream margins I have seen in this sector.

Sure, production growth is flattish in 2014 but Chevron's Australian/Angolan LNG projects and offshore Gulf of Mexico will boost production/reserve growth next year. I believe new money should avoid Chevron at 134-135 as the risk-reward potential is mediocre here, even though I expect the shares to move higher. However, Chevron can deliver 11 EPS in 2014 and thus has compelling value at 11 times earnings or somewhere near 122-124. This level is entirely possible if there is a correction in Big Oil. Brazil's Petrobras has been the worst-performing major oil company in the world in the past three years. The Brazilian government, its majority shareholders, forced Petrobras to sell natural gas/refined products to the local market at a loss, a political gambit by the populist Workers Party. However, no matter who wins the October election, Brazil could raise petroleum product prices without fear of an immediate political backlash. If President Dilma Rousseff is defeated, Petrobras's current 40 per cent NAV discount to NAV will narrow. In this scenario, the Petrobras ADR could well rise to 22-23, still a 30 per cent NAV discount. The Sad Sack of Big Oil could well sizzle this autumn. Hence this "Samba Trade"!

 


Khaleej Times




  MENA News Headlines
 Apr 30 2016 - Qatar's MPHC net profit up 83 percent in Q1MENAFN
(MENAFN) Mesaieed Petrochemical Holding Co. posted net profit of USD 58.28mn for the first quarter of this year, an increase of 83 percent.Furthermore, the increase was attributed to growth sales ...

 Apr 30 2016 - Aaml Co. net profit jumps 33.7 percent in Q1MENAFN
(MENAFN) Aamal firm, one of the GCC's fastest growing firms, proclaimed net profit of USD 42.18mn for Q1 of this year, a jump of 33.7 percent.Additionally, group profit were up 6.9 percent to USD ...

 Apr 30 2016 - Egypt, UAE to discuss relations in real estate projectsMENAFN
(MENAFN)Egypt and UAE will discuss real estate investment projects that UAE seeks to participate in.Moreover, these projects involve the New Administrative Capital, as well as housing projects in ...

 Apr 29 2016 - Omani power firm to build vital power facilityMENAFN
(MENAFN) Omani Musandam Power Company SAOC (MPC) will construct the Musandam Independent Power Plant (Musandam IPP) in the Musandam Governorate.As a high level official stated, the firm's strategy ...

 Apr 29 2016 - Saudi, French bilateral trade to reach USD13.6bMENAFN
(MENAFN) The Saudi-French Business Opportunities Forum taking place in Saudi Arabia delivers the finest stage to advance parts of mutual collaboration in many new areas.The two countries enjoy great ...

 Apr 29 2016 - KSA continues to prioritize low spendingMENAFN
(MENAFN) Saudi plans to return unspent money which was allocated in this year's budget for the purpose of cutting waste as state revenues weakens due to low oil prices.In the recent past, government ...

 Apr 29 2016 - Qatar- El Jaish aim to dethrone LekhwiyaThe Peninsula
(MENAFN - The Peninsula) Lekhwiya players lift the Qatar Cup trophy in this May 2 2015 file picture. Doha: El Jaish will be looking for a repeat of their 2014 Qatar Cup success when they ...

 Apr 29 2016 - Qatar Cup Trophy Tour stops at OoredooThe Peninsula
(MENAFN - The Peninsula) Doha: The Qatar Cup tour made its final stop at Ooredoo the official telecom partner of the Qatar Cup 2016. Staff and management took an opportunity to take photos and ...

 Apr 29 2016 - Al Rayyan rally to win Qatar Cup titleThe Peninsula
(MENAFN - The Peninsula) Al Rayyan SC players and officials celebrate while receiving the Qatar Cup after they beat El Jaish SC 21-25 25-18 25-17 32-34 18-16 in the final played at Ali Bin Hamad Al ...

 Apr 29 2016 - Qatar- Emir Cup: Al Kharaitiyat Al Gharafa earn thrilling wins to advanceThe Peninsula
(MENAFN - The Peninsula) Al Sailiya’s Abdurahman Al Harazi (left) celebrates after scoring the first goal for his team during their Emir Cup third round match against Al Wakrah SC at Al Arabi ...

 Apr 29 2016 - Steinmeier doubts Trump's 'America first' planThe Peninsula
(MENAFN - The Peninsula) German Foreign Minister Frank-Walter Steinmeier gestures during a joint press conference with Portuguese Foreign Minister Augusto Santos Silva (not seen) after their meeting ...

 Apr 29 2016 - Qatar- Met predicts a hot day with some cloudsThe Peninsula
(MENAFN - The Peninsula) Doha: The weather forecast for Qatar valid until 6pm Thursday inshore will be hot during the day with some clouds offshore will be hazy to misty at places and partly ...

 Apr 29 2016 - Qatar key to boosting Turkey-GCC tiesThe Peninsula
(MENAFN - The Peninsula) Emir H H Sheikh Tamim bin Hamad Al Thani met Turkey’s Prime Minister Dr Ahmet Davutoglu and his delegation at the Emiri Diwan yesterday. They discussed relations ...

 Apr 29 2016 - Qatar- Emir welcomes King Mohammed of MoroccoThe Peninsula
(MENAFN - The Peninsula) Emir H H Sheikh Tamim bin Hamad Al Thani welcomes King Mohammed VI of the Kingdom of Morocco and his delegation at Hamad International Airport. Doha: Emir H H Sheikh ...

 Apr 29 2016 - Qatar eyes 'best of the best' turf for 2022The Peninsula
(MENAFN - The Peninsula) A worker tends to grass being grown at a research and development centre in Murakh to find the best playing surface for FIFA 2022 yesterday. Doha: Watching grass grow ...

 Apr 29 2016 - Qatar discusses WTD eventsThe Peninsula
(MENAFN - The Peninsula) Doha: Qatar Tourism Authority (QTA) yesterday held a meeting with UN World Tourism Organisation (UNWTO) to discuss Qatar’s preparations to host World Tourism Day 2017. ...

 Apr 29 2016 - Qatar- Premier meets EU Counterterrorism CoordinatorThe Peninsula
(MENAFN - The Peninsula) Doha: Prime Minister and Interior Minister H E Sheikh Abdullah bin Nasser bin Khalifa Al Thani yesterday met European Union Counterterrorism Coordinator Gilles de Kerchove ...

 Apr 29 2016 - Qatar- QU University of Illinois sign dealThe Peninsula
(MENAFN - The Peninsula) DOHA: An agreement signed between Qatar University College of Medicine (QU-CMED) and the Board of Trustees of the University of Illinois at Chicago (UIC) has established ...

 Apr 29 2016 - Qatar- AZF Ramadan Sports Festival from June 10The Peninsula
(MENAFN - The Peninsula) DOHA: Aspire Zone Foundation (AZF) has added cricket and rugby to its annual Ramadan Sports Festival which starts on June 10. The two-week event will end on June 24 (5-19 ...

 Apr 29 2016 - Qatar- First phase of mapping genetic code of citizens in final stageThe Peninsula
(MENAFN - The Peninsula) By Fazeena Saleem DOHA: The initial phase of an initiative to map the genetic code of citizens for better diagnoses and treatment of diseases in Qatar has reached the ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help