Sweet 16 Update
Posted: Sun Feb 05, 2012 7:38 pm
The Sweet 16 is up 10% YTD. EXXI, PTEN and HP all reported strong 4th quarter results. PTEN's earning per share came in a tad below my forecast only because they wrote off some old rigs.
GeoResources (GEOI) has move over my Fair Value estimate but that is OK. I'm expecting the company to report strong 4th quarter results and a large increase in proven reserves. I'm updating the Fair Value estimates for each company after taking a hard look at Q4 results.
I dropped five companies from the Sweet 16 on January 1, just to make some changes to the portfolio. I still like all five. Three of them (FXEN, PBEGF and PMGLF) are up more than 30% YTD.
Not surprising, our three "gassers" (CRZO, GST and RRC) are down YTD. All three are going to be fine. They are all focused on increasing liquids production this year. I have a HOLD on CRZO right now. I may drop it back to the Watch List just because I have others that deserve a promotion.
One of our SMU interns is building a "Drillers Watch List". Several offshore drillers look very good. I may move HP and PTEN from the Sweet 16 to the Drillers Watch List just so it will be easier to compare them to the peer group.
I attended a meeting Saturday morning to discuss the likelihood of significant M&A activity this year. I think we will see several takeovers this year as the majors and national oil companies really want to get into the U.S. shale plays. The majors and NOCs are sitting on piles of cash. I'm going over the Watch List and a few others on our "radar screen" to see which are the most likely takeover targets. I'm sure EOG, NFX, KOG and PXP are on the radar screens of several majors today.
GeoResources (GEOI) has move over my Fair Value estimate but that is OK. I'm expecting the company to report strong 4th quarter results and a large increase in proven reserves. I'm updating the Fair Value estimates for each company after taking a hard look at Q4 results.
I dropped five companies from the Sweet 16 on January 1, just to make some changes to the portfolio. I still like all five. Three of them (FXEN, PBEGF and PMGLF) are up more than 30% YTD.
Not surprising, our three "gassers" (CRZO, GST and RRC) are down YTD. All three are going to be fine. They are all focused on increasing liquids production this year. I have a HOLD on CRZO right now. I may drop it back to the Watch List just because I have others that deserve a promotion.
One of our SMU interns is building a "Drillers Watch List". Several offshore drillers look very good. I may move HP and PTEN from the Sweet 16 to the Drillers Watch List just so it will be easier to compare them to the peer group.
I attended a meeting Saturday morning to discuss the likelihood of significant M&A activity this year. I think we will see several takeovers this year as the majors and national oil companies really want to get into the U.S. shale plays. The majors and NOCs are sitting on piles of cash. I'm going over the Watch List and a few others on our "radar screen" to see which are the most likely takeover targets. I'm sure EOG, NFX, KOG and PXP are on the radar screens of several majors today.