Energy Prospectus

I spent the last two hours going over my S-16 forecasts. Getting ready for 3rd quarter actuals.

Here are a few short takes:

> XEC is off to a good start but still well below my Fair Value estimate.
> If you think oil prices are going higher, load up on CLR, DNR and PetroBank at these prices
> PetroBank selling just over book value and well below its break-up value looks like a "Screaming Buy". I just cannot justify why that stock has lagged behind the pack this year. It is heavily weight to oil and everything looks great. I plan to dig deep into it after I see their 3rd quarter results.
> GPOR is a great value at the current price. Production will be up in Q3 and they have HUGE upside in Canada.
> MIND and PDS are still trading below Book Value. Both have very strong Balance Sheets and Q3 and Q4 results will be strong for both of them. These two could make nice runs after Q3 results come out.
> SGY may be the top Value Pick. Q3 results will be solid. It may take off after the moritorium on GOM drilling is lifted. SGY is a lot more than its GOM properties.
> TGA is still trading below Fair Value. Buy all the dips as this one has a long way to go. The next 120 days will be very interesting. OXY and Total are drilling some HUGE exploration wells in Yemen right now that could be "Game Changers" for TGA.

Premium Members should read my "Sweet 16 Detailed Update" on the website.

Dan

If the market ever figures out that EOG is not a gas stock anymore, watch out. Listen to Pappa's last investor conference and listen to him this week.
The issue I see with EOG at the moment is that they they have stated that there will be substantial captal expenditures coming over the next year+ as they complete their conversion to an oil company. Market does not seem to believe in the story and might not like all that spending. But that is short sighted. For those in this for the long term, you get good downside protection with a top notch management team and a pristine balance sheet with low cost production. Upside is incredible especially if oil continues its upswing.

But it is is entirely possible and probable that other oil stocks in the sweet 16 will do quite a bit better short term, especially the smaller cap issues. With EOG you sleep comfortably at night.

I agree with you 100%. EOG is a "Core of the Core Holding" for me. I'm bullish on oil prices for next year and I can see EOG at $200/share by the end of 2011.
See my forecast model under our Sweet 16 Tab and you will see why. Very strong cash flows on the way for EOG.