This month's Intelligent Investor compares two upstream energy producers: Occidental Petroleum and EOG Resources. Both companies have large acreage positions in the Delaware basin and international exposure, offering investors potential catalysts for growth. The analysis explores the impact of Occidental Petroleum's recent acquisition and the potential for a bottom in upstream oil and gas stocks.
As it's Christmas, and here at Oilprice.com we like to give back to our dear readers, we've decided to give you a little holiday treat. Here is this month's Intelligent Investor - our deep dive comparison service for Global Energy Alert subscribers. If you like what you see, feel free to gift yourself and your loved ones a subscription next year. In this month's edition of our comparison series, we take a look at two upstream powerhouse producers.
The first, Occidental Petroleum, is in the process of digesting a large acquisition and carries a lot of debt as a result. Is the share price fully discounting this factor We will see. The second is EOG Resources, a company that in recent years has chosen to grow organically, eschewing the M&A craze that has brought a lot of consolidation into the sector. There is a reasonable comparison between the two even though EOG is priced at about 2.5X OXY. Both have big acreage positions in the Delaware basin that are the cornerstone of their income. Both have international exposure with operations in Middle East-OXY, and in Trinidad-Tobago-EOG. Both have catalysts for growth in the coming year. And, like many comparisons, there isn't necessarily a bad choice. So let's dive in. But first, let's review the thesis for investing in the stocks of shale drillers Are we near a bottom in upstream oil and gas stocks I think we are. It should be understood that oil production is a cyclic business -production rises until prices stabilize - and then it begins to decline as activity tapers off. We've had a step change from technology-driven cost and efficiency improvements that have extended the period of production semi-levitation at current levels that must come to an end. Sometime. Without going through a lot of verbiage and reference citations, it just makes sense that we are nearing a peak in the last reservoir to show significant growth - the Permia
Upstream Energy Occidental Petroleum EOG Resources Delaware Basin Oil Production
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