Six Oil Companies To Watch In 2020 January 08, 2020 - OilPrice.com This is what the bears don ’t get about oil stocks: These are no longer the reckless, wasteful, binge years of the shale boom. The smart companies have adapted to a new reality. Now, it ’s about dramatic new offshore discoveries that are being brought online in record speed. It ’s about brilliant new well-completion designs that enhance productivity. It ’s about integrated giants who win, either way. It ’s about extremely ambitious small-caps that slip into new venues and scoop up massive basins when no one ’s looking. It ’s about ingenuity on multiple levels that translates into something for every investor appetite. Here are 6 stocks to watch in 2020, and between them they cover every sort of risk-vs-reward level out there: #1 ExxonMobil (NYSE:XOM): The Best Recovery If dividends are what you ’re after, look no further on the oilfield. Even the volatility of the oil and gas market over the past years have failed to disrupt Exxon ’s dividend payouts. First, the supergiant ’s Q3 earnings report last week was better than expected, with earnings of 75 cents per share--compared to analyst estimates of 67 cents. Sales, at $65.05 billion, also beat estimates. And it ’s planning to double its cash flow through 2025. One of the most exciting things is the new oil that will come online from the superstar Guyana-Suriname Basin and Exxon ’s 14 finds that just put Guyana on the oil map. It ’s also got new production and infrastructure coming online in the Permian basin, not to mention a major LNG project in Mozambique. Our assessment is that Exxon is recovering nicely, and 2020 should see much better performance, particularly following the divestment of its North Sea assets for a cool $3.5 billion. But overall, the great thing about Exxon is that no matter how oil prices fluctuate, this integrated giant is covered. Lower oil prices help its upstream assets, while higher prices boost the downstream. #2 ConocoPhillips (NYSE:COP): Deliverance Few oil stocks shared in as much glory as COP when it comes to Q3 earnings. Not only did COP report a net income increase to $2.74 share, or $3.056 billion, but it also managed adjusted earnings of $914 million, or $0.82 per share.Earlier in October, it also announced a 38% increase in its quarterly dividend, along with plans to repurchase $3 billion of shares next year. COP has had lots of ups and downs this year, but this is what we like: It ’s refocusing more narrowly on US shale, and on the Permian in particular. It ’s spent the last year cutting costs and getting slimmer and trimmer, including a deal to sell its Australian assets for $1.4 billion. It ’s likely that US shale expansion plans are in the works here, so this is a bet on that. #3 Recon Africa (TSX.V:RECO): Small Cap Sitting on Eagle Ford-Size Basin Recon Africa has just received an exploration license for a huge area for a tiny company with a market cap of only around $28 million and shares selling for under $0.50. Yet, it ’s got 90% of the exploration rights to a shale basin of 25,000 square kilometers, that ’s the same size as the Eagle Ford. It acquired the oil and gas rights for the entire 6.3-million-acre Kavango Basin in Namibia— with Africa ’s oil production friendly government. It ’s pretty unique for a company this small to have a basin this big, so when it happens, we take note. We ’ve also taken note of the CEO, Jay Park QC, who is the former director of Caracal Energy, which was acquired by giant Glencore in 2014 for $1.3 billion. That puts RECO squarely on our radar. So does anything that goes through Bill Cathey, well known geoscientist. We ’ve heard that Cathey examined the Kavango Basin magnetic data and said it’s comprised of a 30,000-foot sedimentary basin. That ’s when RECO licensed rights to the rest of the massive basin. They have a 90% interest in a 4-year exploration license leading to a 25-year production license on commercial discovery, and the first test wells are slated to be drilled in Q2 2020--just a few months away. The Kavango Basin is part of the Karoo Supergroup of geology, and it ’s also been shown to have the same depositional environment as Shell ’s Whitehill Permian shale play, part of the Karoo Supergroup in South Africa. Sproule - a tier 1 resource assessment company - estimated that Kavango has a potential 12 billion barrels of oil or 119 trillion cubic feet of natural gas. That ’s just for the shale. It doesn ’t include any conventional potential. Namibia is one of the up-and-coming oil venues in the frontier of Africa. Ask Shell or Exxon, both of whom are acquiring a lot of assets here, making Recon a natural acquisition target if a commercial discovery is made. #4 HESS (NYSE:HES): Key Partner to the Giants Not only is HESS sharing in the future wealth of the outsized oil discoveries with Exxon in Guyana at the Stabroek Block, but it will also be getting a boost from the block ’s ahead-of-schedule first production in December. Right now, HESS is doing well enough as it is on its position in US shale, in the Bakken, and when it adds its Guyana production to its portfolio by the end of this year, that will outshine the Bakken. So, what ’s good becomes even better. This stock is looking great going into 2020, and it exceeded its Q3 output guidance based on the Bakken alone. In fact, Hess ’ Bakken production got a 38% boost year-on-year--way past expectations--and thanks in part to a new well-completion design to enhance productivity. That ’s really what we like to see. #5 Phillips 66 (NYSE:PSX): The Other Way to Cash in on the Permian PSX soared more than 15% in October. It ’s loving the low oil prices for its refineries, and now it ’s busy building up pipelines, too, to carry all that Permian largesse to the refiners. It ’s targeted over $4 billion in pipelines. The next big pipeline in the … pipeline is one that leads from the Permian Basin to the Gulf Coast--meeting a major demand and allowing Phillips 66 to rake in more cash on more cheap North American oil. This company is a bet on low oil prices--bottom line. Fairly confident in the knowledge that nothing short of WWIII will result in a surge in oil prices at this point, this is Phillips 66 ’s playground through the rest of this year and presumably into 2020. That’s refining + roaring midstream businesses that are doing much more than thriving in this atmosphere. #6 Halliburton (NYSE:HAL): The Innovative Oilfield Service Giant Halliburton is one of the largest oilfield services companies in the world. The company has secured its place as a giant in the oil and gas industry. But it didn’t happen overnight. Over the past month, Halliburton has jumped by 12% on a string of positive news. The oilfield services sector is highly competitive and ripe with innovation. In order to stay ahead, companies must be on the absolute cutting edge of technology. And that ’s exactly what Halliburton has done. And recently, Halliburton increased the heat for its competition. Partnering with Microsoft, Halliburton has become one of the most exciting “tech” plays in the industry. This partnership is significant. Microsoft, a leader in the tech world, is looking to bring machine learning, augmented reality, and the Industrial Internet of Things to the oil and gas industry, and Halliburton is welcoming the new take on the resource realm with open arms. In addition to its forward looking approach with regards to technology, Halliburton is also wheeling and dealing in the traditional oil world. In its efforts to expand outside of the U.S. shale boom, the oilfield services behemoth has secured major deals in the Middle East, including a $597 million contract with Kuwait Oil Company to help develop its offshore program. BONUS: Canadian Oil Still Has Upside Potential Cenovus Energy (TSX:CVE): This is one of the most actively traded stocks on the TSX, and it’s been trending up for the second half of this year. The recent sell off represents a great opportunity for investors looking to buy the dip in a stock that climbed over $6 earlier in the year. The potential is certainly here for this oil company, so for investors who are bullish on the return of the oil markets, this is a perfect pick in the Canadian market. Imperial Oil (TSX:IMO) still has some of the lowest cost producing oil sands in Canada and that is going to pay off as oil prices continue to rise and new tech breakthroughs bring breakeven prices even lower. The management is well known for being conservative, but that certainly shouldn ’t put investors off in a time when recovery is the buzzword of the day and consistency is sure to be rewarded. Crescent Point Energy Corp. (TSX:CPG): CPG is particularly attractive for the dividend that investors can expect back, but it is also now worth looking at for returning value in the coming months. The recent fall in stock price provides investors with a great entry point for a company with a positive outlook in a market that is set to grow. The collapse in price over the last year appears to have stopped, with some great growth in late October and early November. This oil and gas company provides exposure in both the Canadian and U.S. markets. MEG Energy Corp (TSX:MEG): is a Canada-based oil producer which operates primarily in Northern Alberta ’s oil sands. The forward-thinking company uses steam-assisted gravity drainage to retrieve oil from the deep wells which it drills. The excess heat and electricity produced from this process is then sold to Alberta ’s power grid.The company ’s large proven resources and their cutting-edge technology make MEG a promising company for investors looking to get in to the promising oil sands in Alberta. Tourmaline Oil Corp (TSX:TOU) is another Canadian resource producer focusing on exploration, production, development and acquisition within Western Canadian Sedimentary Basin. The company is in possession of an extensive undeveloped land position with long-term growth opportunities and a large multi-year drilling inventory.Tourmaline ’s strong leadership make the company a promising pick for investors looking to take advantage of the tremendous Canadian oil opportunities which are due for a strong rebound as oil prices inch higher. By Josh Owens for Oilprice.com **IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY** Forward-Looking Statements. Statements contained in this document that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of Recon. All estimates and statements with respect to Recon’s operations, its plans and projections, oil prices, recoverable oil, production targets, production and other operating costs and likelihood of oil recoverability are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties including, without limitation: risks associated with oil and gas exploration, development, exploitation and production, geological risks, marketing and transportation, availability of adequate funding, volatility of commodity prices, imprecision of reserve and resource estimates, environmental risks, competition from other producers, government regulation, dates of commencement of production and changes in the regulatory and taxation environment. Actual results may vary materially from the information provided in this document, and there is no representation that the actual results realized in the future will be the same in whole or in part as those presented herein. Other factors that could cause actual results to differ from those contained in the forward-looking statements are also set forth in filings that Recon and its technical analysts have made, We undertake no obligation, except as otherwise required by law, to update these forward-looking statements except as required by law. Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. Recon's future success will depend on its ability to develop its current properties and on its ability to discover resources that are capable of commercial production. However, there is no assurance that Recon's future exploration and development efforts will result in the discovery or development of commercial accumulations of oil and natural gas. In addition, even if hydrocarbons are discovered, the costs of extracting and delivering the hydrocarbons to market and variations in the market price may render uneconomic any discovered deposit. Geological conditions are variable and unpredictable. Even if production is commenced from a well, the quantity of hydrocarbons produced inevitably will decline over time, and production may be adversely affected or may have to be terminated altogether if Recon encounters unforeseen geological conditions. Adverse climatic conditions at such properties may also hinder Recon's ability to carry on exploration or production activities continuously throughout any given year. DISCLAIMERS ADVERTISEMENT. This communication is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively “the Company”) may in the future be paid by Recon to disseminate future communications if this communication proves effective. In this case the Company has not been paid for this article. But the potential for future compensation is a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. We have not been compensated but may in the future be compensated to conduct investor awareness advertising and marketing for TSXV:RECO. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The information in our communications and on our website has not been independently verified and is not guaranteed to be correct. SHARE OWNERSHIP. The owner of Oilprice.com owns shares of this featured company and therefore has an additional incentive to see the featured company’s stock perform well. The owner of Oilprice.com will not notify the market when it decides to buy more or sell shares of this issuer in the market. The owner of Oilprice.com will be buying and selling shares of this issuer for its own profit. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities. NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investing is inherently risky. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits similar to those discussed.
Six Oil Companies To Watch In 2020 January 08, 2020 - OilPrice.com This is what the bears don ’t get about oil stocks: These are no longer the reckless, wasteful, binge years of the shale boom. The smart companies have adapted to a new reality. Now, it ’s about dramatic new offshore discoveries that are being brought online in record speed. It ’s about brilliant new well-completion designs that enhance productivity. It ’s about integrated giants who win, either way. It ’s about extremely ambitious small-caps that slip into new venues and scoop up massive basins when no one ’s looking. It ’s about ingenuity on multiple levels that translates into something for every investor appetite. Here are 6 stocks to watch in 2020, and between them they cover every sort of risk-vs-reward level out there: #1 ExxonMobil (NYSE:XOM): The Best Recovery If dividends are what you ’re after, look no further on the oilfield. Even the volatility of the oil and gas market over the past years have failed to disrupt Exxon ’s dividend payouts. First, the supergiant ’s Q3 earnings report last week was better than expected, with earnings of 75 cents per share--compared to analyst estimates of 67 cents. Sales, at $65.05 billion, also beat estimates. And it ’s planning to double its cash flow through 2025. One of the most exciting things is the new oil that will come online from the superstar Guyana-Suriname Basin and Exxon ’s 14 finds that just put Guyana on the oil map. It ’s also got new production and infrastructure coming online in the Permian basin, not to mention a major LNG project in Mozambique. Our assessment is that Exxon is recovering nicely, and 2020 should see much better performance, particularly following the divestment of its North Sea assets for a cool $3.5 billion. But overall, the great thing about Exxon is that no matter how oil prices fluctuate, this integrated giant is covered. Lower oil prices help its upstream assets, while higher prices boost the downstream. #2 ConocoPhillips (NYSE:COP): Deliverance Few oil stocks shared in as much glory as COP when it comes to Q3 earnings. Not only did COP report a net income increase to $2.74 share, or $3.056 billion, but it also managed adjusted earnings of $914 million, or $0.82 per share.Earlier in October, it also announced a 38% increase in its quarterly dividend, along with plans to repurchase $3 billion of shares next year. COP has had lots of ups and downs this year, but this is what we like: It ’s refocusing more narrowly on US shale, and on the Permian in particular. It ’s spent the last year cutting costs and getting slimmer and trimmer, including a deal to sell its Australian assets for $1.4 billion. It ’s likely that US shale expansion plans are in the works here, so this is a bet on that. #3 Recon Africa (TSX.V:RECO): Small Cap Sitting on Eagle Ford-Size Basin Recon Africa has just received an exploration license for a huge area for a tiny company with a market cap of only around $28 million and shares selling for under $0.50. Yet, it ’s got 90% of the exploration rights to a shale basin of 25,000 square kilometers, that ’s the same size as the Eagle Ford. It acquired the oil and gas rights for the entire 6.3-million-acre Kavango Basin in Namibia— with Africa ’s oil production friendly government. It ’s pretty unique for a company this small to have a basin this big, so when it happens, we take note. We ’ve also taken note of the CEO, Jay Park QC, who is the former director of Caracal Energy, which was acquired by giant Glencore in 2014 for $1.3 billion. That puts RECO squarely on our radar. So does anything that goes through Bill Cathey, well known geoscientist. We ’ve heard that Cathey examined the Kavango Basin magnetic data and said it’s comprised of a 30,000-foot sedimentary basin. That ’s when RECO licensed rights to the rest of the massive basin. They have a 90% interest in a 4-year exploration license leading to a 25-year production license on commercial discovery, and the first test wells are slated to be drilled in Q2 2020--just a few months away. The Kavango Basin is part of the Karoo Supergroup of geology, and it ’s also been shown to have the same depositional environment as Shell ’s Whitehill Permian shale play, part of the Karoo Supergroup in South Africa. Sproule - a tier 1 resource assessment company - estimated that Kavango has a potential 12 billion barrels of oil or 119 trillion cubic feet of natural gas. That ’s just for the shale. It doesn ’t include any conventional potential. Namibia is one of the up-and-coming oil venues in the frontier of Africa. Ask Shell or Exxon, both of whom are acquiring a lot of assets here, making Recon a natural acquisition target if a commercial discovery is made. #4 HESS (NYSE:HES): Key Partner to the Giants Not only is HESS sharing in the future wealth of the outsized oil discoveries with Exxon in Guyana at the Stabroek Block, but it will also be getting a boost from the block ’s ahead-of-schedule first production in December. Right now, HESS is doing well enough as it is on its position in US shale, in the Bakken, and when it adds its Guyana production to its portfolio by the end of this year, that will outshine the Bakken. So, what ’s good becomes even better. This stock is looking great going into 2020, and it exceeded its Q3 output guidance based on the Bakken alone. In fact, Hess ’ Bakken production got a 38% boost year-on-year--way past expectations--and thanks in part to a new well-completion design to enhance productivity. That ’s really what we like to see. #5 Phillips 66 (NYSE:PSX): The Other Way to Cash in on the Permian PSX soared more than 15% in October. It ’s loving the low oil prices for its refineries, and now it ’s busy building up pipelines, too, to carry all that Permian largesse to the refiners. It ’s targeted over $4 billion in pipelines. The next big pipeline in the … pipeline is one that leads from the Permian Basin to the Gulf Coast--meeting a major demand and allowing Phillips 66 to rake in more cash on more cheap North American oil. This company is a bet on low oil prices--bottom line. Fairly confident in the knowledge that nothing short of WWIII will result in a surge in oil prices at this point, this is Phillips 66 ’s playground through the rest of this year and presumably into 2020. That’s refining + roaring midstream businesses that are doing much more than thriving in this atmosphere. #6 Halliburton (NYSE:HAL): The Innovative Oilfield Service Giant Halliburton is one of the largest oilfield services companies in the world. The company has secured its place as a giant in the oil and gas industry. But it didn’t happen overnight. Over the past month, Halliburton has jumped by 12% on a string of positive news. The oilfield services sector is highly competitive and ripe with innovation. In order to stay ahead, companies must be on the absolute cutting edge of technology. And that ’s exactly what Halliburton has done. And recently, Halliburton increased the heat for its competition. Partnering with Microsoft, Halliburton has become one of the most exciting “tech” plays in the industry. This partnership is significant. Microsoft, a leader in the tech world, is looking to bring machine learning, augmented reality, and the Industrial Internet of Things to the oil and gas industry, and Halliburton is welcoming the new take on the resource realm with open arms. In addition to its forward looking approach with regards to technology, Halliburton is also wheeling and dealing in the traditional oil world. In its efforts to expand outside of the U.S. shale boom, the oilfield services behemoth has secured major deals in the Middle East, including a $597 million contract with Kuwait Oil Company to help develop its offshore program. BONUS: Canadian Oil Still Has Upside Potential Cenovus Energy (TSX:CVE): This is one of the most actively traded stocks on the TSX, and it’s been trending up for the second half of this year. The recent sell off represents a great opportunity for investors looking to buy the dip in a stock that climbed over $6 earlier in the year. The potential is certainly here for this oil company, so for investors who are bullish on the return of the oil markets, this is a perfect pick in the Canadian market. Imperial Oil (TSX:IMO) still has some of the lowest cost producing oil sands in Canada and that is going to pay off as oil prices continue to rise and new tech breakthroughs bring breakeven prices even lower. The management is well known for being conservative, but that certainly shouldn ’t put investors off in a time when recovery is the buzzword of the day and consistency is sure to be rewarded. Crescent Point Energy Corp. (TSX:CPG): CPG is particularly attractive for the dividend that investors can expect back, but it is also now worth looking at for returning value in the coming months. The recent fall in stock price provides investors with a great entry point for a company with a positive outlook in a market that is set to grow. The collapse in price over the last year appears to have stopped, with some great growth in late October and early November. This oil and gas company provides exposure in both the Canadian and U.S. markets. MEG Energy Corp (TSX:MEG): is a Canada-based oil producer which operates primarily in Northern Alberta ’s oil sands. The forward-thinking company uses steam-assisted gravity drainage to retrieve oil from the deep wells which it drills. The excess heat and electricity produced from this process is then sold to Alberta ’s power grid.The company ’s large proven resources and their cutting-edge technology make MEG a promising company for investors looking to get in to the promising oil sands in Alberta. Tourmaline Oil Corp (TSX:TOU) is another Canadian resource producer focusing on exploration, production, development and acquisition within Western Canadian Sedimentary Basin. The company is in possession of an extensive undeveloped land position with long-term growth opportunities and a large multi-year drilling inventory.Tourmaline ’s strong leadership make the company a promising pick for investors looking to take advantage of the tremendous Canadian oil opportunities which are due for a strong rebound as oil prices inch higher. By Josh Owens for Oilprice.com **IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY** Forward-Looking Statements. Statements contained in this document that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of Recon. All estimates and statements with respect to Recon’s operations, its plans and projections, oil prices, recoverable oil, production targets, production and other operating costs and likelihood of oil recoverability are forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties including, without limitation: risks associated with oil and gas exploration, development, exploitation and production, geological risks, marketing and transportation, availability of adequate funding, volatility of commodity prices, imprecision of reserve and resource estimates, environmental risks, competition from other producers, government regulation, dates of commencement of production and changes in the regulatory and taxation environment. Actual results may vary materially from the information provided in this document, and there is no representation that the actual results realized in the future will be the same in whole or in part as those presented herein. Other factors that could cause actual results to differ from those contained in the forward-looking statements are also set forth in filings that Recon and its technical analysts have made, We undertake no obligation, except as otherwise required by law, to update these forward-looking statements except as required by law. Exploration for hydrocarbons is a speculative venture necessarily involving substantial risk. Recon's future success will depend on its ability to develop its current properties and on its ability to discover resources that are capable of commercial production. However, there is no assurance that Recon's future exploration and development efforts will result in the discovery or development of commercial accumulations of oil and natural gas. In addition, even if hydrocarbons are discovered, the costs of extracting and delivering the hydrocarbons to market and variations in the market price may render uneconomic any discovered deposit. Geological conditions are variable and unpredictable. Even if production is commenced from a well, the quantity of hydrocarbons produced inevitably will decline over time, and production may be adversely affected or may have to be terminated altogether if Recon encounters unforeseen geological conditions. Adverse climatic conditions at such properties may also hinder Recon's ability to carry on exploration or production activities continuously throughout any given year. DISCLAIMERS ADVERTISEMENT. This communication is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively “the Company”) may in the future be paid by Recon to disseminate future communications if this communication proves effective. In this case the Company has not been paid for this article. But the potential for future compensation is a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. We have not been compensated but may in the future be compensated to conduct investor awareness advertising and marketing for TSXV:RECO. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The information in our communications and on our website has not been independently verified and is not guaranteed to be correct. SHARE OWNERSHIP. The owner of Oilprice.com owns shares of this featured company and therefore has an additional incentive to see the featured company’s stock perform well. The owner of Oilprice.com will not notify the market when it decides to buy more or sell shares of this issuer in the market. The owner of Oilprice.com will be buying and selling shares of this issuer for its own profit. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities. NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investing is inherently risky. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits similar to those discussed.