Best Gas Companies For 2017

A little over two months ago, the Dow Jones Industrial Average was sitting at 15,660.18–down 8.3% for 2016–and investors were freaking out about the end of the world. Now it’s back above 18,000, having gained 15% in just nine-and-a-half weeks.

Reuters

The Dow Jones Industrial Average rose106.70 points, or 0.6%, to18,004.16 today, it’s highest close since July 20, 2015. The S&P 500 gained 0.7% to 2,094.34, while the Nasdaq Composite advanced 0.4% to 4,960.02.

The bigger surprise is that the Dow retook that milestone despite the fact that Opec couldn’t reach a deal to freeze oil production. Strategas Research Partners’ Daniel Clifton and team have an idea why the lack of agreement hasn’t been a bid deal for the market:

Yesterday OPEC and other major oil producers failed to reach an agreement to freeze oil production levels. The potential deal was viewed as a possible first step in what could lead to later discussions to cut production. A deal off the table, at least for the time being, suggests that the oil market will take later than expected for it to rebalance supply and demand. What we are seeing is a lesson in the free market, courtesy of Saudi Arabia. An agreement seems difficult to reach as long as Iranian oil is coming back on line, Iraq and Russia are gaining market share, and US shale production remains elevated. There are signs that US production is slowing but the Saudis are probably waiting to see further cuts in US production before moving forward should Iran not be included in a deal. This will no doubt continue the pain trade in oil, EM, high-yield, and possibly even stocks. But the effects of these OPEC decisions are getting smaller since some of the imbalances are being worked out and the dollar seems to have topped out.

Best Gas Companies For 2017: Marathon Oil Corporation(MRO)

Marathon Oil Corporation, through its subsidiaries, operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. It operates through three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. The Exploration and Production segment explores for, produces, and markets liquid hydrocarbons and natural gas. The Oil Sands Mining segment mines, extracts, and transports bitumen from oil sands deposits in Alberta, Canada; and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil. The Integrated Gas segment markets and transports products manufactured from natural gas, such as liquified natural gas and methanol. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in July 2001. Marathon Oil Corporation was founded in 1887 and is based in Houston, Texas.

Advisors’ Opinion:

  • [By Ben Levisohn]

    Deutsche Bank’s Ryan Todd and team explain why they raised their price targets on four oil exploration companies–Pioneer Natural Resources (PXD), Devon Energy (DVN), Marathon Oil (MRO), and EOG Resources (EOG):

  • [By Ben Levisohn]

    Barclays analyst Thomas Driscoll and team see more dividend cuts and equity raises coming for oil & gas stocks like Apache (APA), Devon Energy (DVN),Encana (ECA), Anadarko Petroleum (APC), and Marathon Oil (MRO). They explain why:

  • [By Ben Levisohn]

    Fundstrat’s Thomas Lee argues that investors need to add value and low quality stocks like Ford Motor (F), Marathon Oil (MRO), Mosaic (MOS), and First Solar (FSLR) to their portfolios to take advantage of rising oil prices, a cheaper dollar and a rebound in high yield. He explains why:

Best Gas Companies For 2017: Halliburton Company(HAL)

Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.

Advisors’ Opinion:

  • [By Wayne Duggan]

    Gruber names Halliburton Company (NYSE: HAL) as Citi’s top pick among integrates services stocks. After Halliburton, he ranks Baker Hughes second choice, Schlumberger third and Weatherford International Plc (NYSE: WFT) fourth. The firm has Buy ratings on all four stocks.

  • [By Ben Levisohn]

    Evercore ISI’s James West and team explain whyHalliburton (HAL) remains their “North American Winner” among oil-field-services stocks:

    istockphoto.com

    A Structural Favorite. Halliburton remains one of our favorite stocks in the group and the management team’s relentless pursuit of efficiency and aggressive positioning for the upcycle will likely make the stock one of the top performers in the OFS space. Within the diversified peer group, we believe Halliburtonis best positioned to benefit from the unfolding increase in oilfield services activity in North America, as it remains markedly more levered to North America compared to its competitors. Once the recovery (which is already in a nascent stage) further takes hold, NAM activity will react the quickest and the strongest, which should allow Halliburtonto see higher company-wide revenue growth and margin expansion than its peers. Internationally, and following Baker Hughes’ (BHI) decision to exit some international markets and product lines, we expect the international dominance of Halliburtonand Schlumberger (SLB) (which allowed for +20% margins pre-20 09) to return, with Halliburtonas the primary beneficiary of market share gains and better pricing. In anticipation of the upturn, the company continues to execute and gain market share through the downturn. We see a path to $4.00+ in EPS and a $60+ stock price in the not too distant future.

    Shares ofHalliburton have dropped 2.9% to $42.79 at 1:55 p.m. today, while Schlumberger has fallen 2.3% to $78.79, and Baker Hughes has declined 1.7% to $49.14.

  • [By Matt Egan]

    Pink slips are flying in the oil patch: Profits at energy giants Chevron and Exxon Mobil fell over 50% around the middle of last year. No wonder many American oil companies, including Halliburton (HAL) and ConocoPhillips (COP) have aggressively slashed expenses to counter lower earnings. Government statistics indicate the energy industry slashed 130,000 jobs in 2015. Actual job losses that include oil-related businesses are likely higher.

  • [By Ben Levisohn]

    Shares of Halliburton (HAL) and Baker Hughes (BHI) are soaring after they announced that they’d challenge the U.S. Department of Justice’s decision to block their merger. RBC’s Kurt Hallead has the details:

    Associated Press

    Shares of both companies rose ~5% following the joint press release indicating they would challenge the DoJ’s decision to oppose the pending merger.

    Following numerous media reports this week that the DoJ would move to block the pending Halliburton-Baker Hughes merger, the companies today issued a joint press release vowing to contest the DoJ’s effort to stop the deal.

    This confirms that the DoJ is, in fact, planning to sue to halt the pending merger. While it is extremely difficult to handicap potential outcomes at this point, it appears likely that a resolution will be delayed further. The next critical date is April 30, after which either party can choose to walk away if regulatory approval has not been obtained.

    Wells Fargo’s Judson Bailey and Christopher Voie explain why they’re still bullish on Baker Hughes:

    With the DOJ announcing it will block the Halliburton-Baker Hughes transaction, we believe the recent increase inHalliburton shares makes sense but believe that the risk/reward forBaker Hughes as a stand-alone entity may be more compelling with what we view as an exceptionally strong balance sheet and operational upside potential off of a depressed base.

    Potential Deal Still Up In The Air. Although the DOJ is blocking the Halliburton-Baker Hughes merger, the final outcome is still uncertain as there is a decent probability, in our view, that Halliburton will contest the decision and go to court over the issue. However, even ifHalliburton pursues this course, it is also a distinct probability thatBaker Hughes elects to exercise its rights under the merger agreement to terminate the merger after April 30 and collect the $3.5B break-up fee.<

Best Electric Utility Companies To Invest In 2017: Transocean Inc.(RIG)

Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The company also offers well and logistics services. In addition, it engages in oil and gas exploration, development, and production activities primarily in the United States offshore Louisiana and Texas, and in the United Kingdom sector of the North Sea. As of February 10, 2011, the company owned, had partial ownership interests in, and operated 138 mobile offshore drilling units, including 47 high-specification floaters, 25 midwater floaters, 9 high-specification jackups, 54 standard jackups, and 3 other rigs, as well as 1 ultra-deepwater floater and 3 high-specification jackups under construction. Transocean Ltd. was founded in 1953 and is based in Zug, Switzerland.

Advisors’ Opinion:

  • [By Teresa Rivas]

    Chevron and Transocean (RIG) were named in the $20 billion lawsuit over a 2011 oil spill off the southeast coast of the country, and both parties are expected to sign off on the deal today, reports The Wall Street Journal. Criminal charges against executives have already been dropped.

  • [By Ben Levisohn]

    Goldman Sachs analystWaqar Syed and team see “green shoots [appearing] in the distance” for oil-field-services sector…just not offshore drillers. They explain why they cut Atwood Oceanics (ATW) and Noble (NE) to sell, where they join Transocean (RIG):

  • [By Ben Levisohn]

    Shares of Noble have gained 5% to $9.32 at 1:59, but that appears downright disappointing next to Seadrill (SDRL), Transocean (RIG) and Atwood Oceanics (ATW). Transocean has climbed 7.2% to $11.28, Seadrill has jumped 7.6% to $3.40, and Atwood Oceanics has soared 9.9% to $12.31.

Best Gas Companies For 2017: ConocoPhillips(COP)

ConocoPhillips operates as an integrated energy company worldwide. The company?s Exploration and Production (E&P) segment explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. Its Midstream segment gathers, processes, and markets natural gas; and fractionates and markets natural gas liquids in the United States and Trinidad. The company?s Refining and Marketing (R&M) segment purchases, refines, markets, and transports crude oil and petroleum products, such as gasolines, distillates, and aviation fuels. Its Chemicals segment manufactures and markets petrochemicals and plastics. This segment offers olefins and polyolefins, including ethylene, propylene, and other olefin products; aromatics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene and styrene-butadiene copolymers; and various specialty chemical products comprising organosulfur chemicals, solvents, catalyst s, drilling chemicals, mining chemicals, and engineering plastics and compounds. The company?s Emerging Businesses segment develops new technologies and businesses. It focuses on power generation; and technologies related to conventional and nonconventional hydrocarbon recovery, refining, alternative energy, biofuels, and the environment. This segment also offers E-Gas, a gasification technology producing high-value synthetic gas. ConocoPhillips was founded in 1917 and is based in Houston, Texas.

Advisors’ Opinion:

  • [By Ben Levisohn]

    Barclays released its first-quarter earnings preview for oil majors like Chevron (CVX), ExxonMobil (XOM), Suncor Energy (SU) andConocoPhillips (COP), and the surprise is that they see when they list the “Biggest Potential 1Q16 Upside Surprise” they follow it with a single word: “None.” Barclays analyst Paul Cheng and team explain why:

Best Gas Companies For 2017: Apache Corporation(APA)

Apache Corporation, together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company has exploration and production interests in the Gulf of Mexico, the Gulf Coast, east Texas, the Permian basin, the Anadarko basin, and the Western Sedimentary basin of Canada; and onshore Egypt, offshore Western Australia, offshore the United Kingdom in the North Sea, and onshore Argentina, as well as on the Chilean side of the island of Tierra del Fuego. Apache Corporation sells its natural gas to local distribution companies, utilities, end-users, integrated oil and gas companies, and marketers; and crude oil to integrated oil companies, marketing and transportation companies, and refiners. As of December 31, 2009, it had total estimated proved reserves of 1,067 million barrels of crude oil, condensate, and natural gas liquids, as well as 7.8 trillion cubic feet of natural gas. The company was founded in 1954 and is based in Houston, Texas.

Advisors’ Opinion:

  • [By Shauna O’Brien]

    Oppenheimer reported on Tuesday that it has raised its rating on energy company Apache Corporation (APA).

    The firm has upgraded APA from “Perform” to “Outperform,” and has given the company a $100 price target. This price target suggests a 12% increase from the stock’s current price of $87.57.

    Analysts believe that the current stock price already reflects risks and the company is repurchasing shares and debt.

    Apache shares were up 79 cents, or 0.91%, during Tuesday morning trading. The stock is up 12% YTD.

  • [By Matt Egan]

    Before Tuesday, Big Oil’s credit ratings had been left largely intact by S&P. But with oil sinking back to $30 a barrel, the ratings firm took action by downgrading Chevron (CVX), EOG Resources (EOG), Apache (APA), Devon Energy (DVN), Hess (HES), Marathon Oil (MRO), Murphy Oil (MUR), Continental Resources (CLR) and Southwestern Energy (SWN).

  • [By Ben Levisohn]

    Barclays analyst Thomas Driscoll and team see more dividend cuts and equity raises coming for oil & gas stocks like Apache (APA), Devon Energy (DVN),Encana (ECA), Anadarko Petroleum (APC), and Marathon Oil (MRO). They explain why:

Best Gas Companies For 2017: Encana Corporation(ECA)

Encana Corporation and its subsidiaries engage in the exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids. The company owns interests in resource plays that primarily include the Greater Sierra, Cutbank Ridge, Bighorn, and Coalbed Methane resource plays located in British Columbia and Alberta, as well as the Deep Panuke natural gas project offshore Nova Scotia in Canada. It also holds interests in resource plays comprising the Jonah in southwest Wyoming, Piceance in northwest Colorado, Haynesville in Louisiana, and Texas resource play, including east Texas and north Texas. The company serves primarily local distribution companies, industrials, energy marketing companies, and other producers. Encana Corporation was founded in 1971 and is headquartered in Calgary, Canada.

Advisors’ Opinion:

  • [By Ben Levisohn]

    Productivity analysis favors stock picking framework of shale scale + the next rung down. We continue to maintain our Buy ratings on several shale productivity winners such asEOG Resources (CL),Diamondback Energy (CL),PDC Energy (CL),Pioneer Natural Resources and RSP Permian, while increased visibility in a path towards oil price recovery has heightened our confidence in next rung down stocks such as Hess (HES) (CL), Anadarko Petroleum (APC), Encana (ECA), Carrizo Oil & Gas (CRZO) and Whiting Petroleum (WLL). While our well results analysis supports our thesis on these shale scale winners, we note that a number of these higher beta stocks also screened particularly well, further bolstering our view on these equities.

  • [By Ben Levisohn]

    Barclays analyst Thomas Driscoll and team see more dividend cuts and equity raises coming for oil & gas stocks like Apache (APA), Devon Energy (DVN),Encana (ECA), Anadarko Petroleum (APC), and Marathon Oil (MRO). They explain why: