Tuesday Late Night Reading- OXY In The Morning
Posted by zmann on October 17, 2006
Thanks to Soccer for keeping me on the ball. I ommitted OXY from the earnings watch list this moring. It’s the first real energy company to open earnings season, reporting tomorrow. Although they do have more of a chemical component than most E&P companies, save KMG, they should give us an insight into how the group is going to be received as it loses the cover of ever inclining prices and is forced to stand more on production growth and improved margins.
–3Q Wall Street Estimates – $1.34 vs $1.35 3Q05; $4.16 B top line
–price realizations should be: oil up 12% from year ago and flat with 2Q average, gas down 28% YoY and is down sequentially as well.
–2006: $5.45, 2007: $5.27 – down $0.11 and $0.20 respectively over the last 2 months.
–at one-tenth the size of Xom, it trades at a 20% discount on ttm PE
–operating costs have been climbing while revenues have flattened, we’ll need to see some evidence that this trend is at least being managed.
–acquisitions; Vintage Petroleum (1q06), Plains Exploration assets (3Q) – since they were bought in a higher price environment, it would be nice to see some production growth out of the VPI assets by now. 2Q vs 1Q production growth was just over 1% despite a full quarter of VPI volumes.
–I’m on the sidelines on this one but will monitor it closely for the q&a part of the cc tomorrow.