Market Correction Brings Opportunity to Buy Energy Stocks

A market correction is under way as investors seek to take profits on the over-priced hyped recovery that has been slow to materialize. The economic growth forecasts for the U.S. in particular look stagnate at maybe 2% growth starting late 2010. Emerging markets GDP growth in Asia, Africa, South America and parts of Europe look promising but lack the ability to maintain the speculative DJIA levels over 9,200. These regions appear unable to lift world markets to new highs without healthy U.S. consumer spending which is unlikely for sometime given massive debt obligations. However, we should see the 700 million emerging middle class people of China and India significantly accelerate demands for both fossil fuel and renewable energy for the next 10-years.

Historically a full 10% correction from the Friday’s intraday highs of 9,630.20 would move the DJIA down to 8,667. That would sync up fairly closely with the lower trend line of higher lows if it happens in the next couple of weeks. A 5% correction from those same Friday highs would move the DJIA down to 9,148.

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Therefore, as the market corrects itself perhaps down to the 8,600 range of April 2009 in the few months ahead, we should see great opportunities to buy discounted energy stocks that will show significant long term returns.

1. ExxonMobil Corporation (XOM) - Solid BUY at $56 per share. 3-year CGR % Revenues 10.49%. The company engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also engages in the manufacture of petroleum products, and transportation and sale of crude oil, natural gas, and petroleum products. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. Exxon Mobil also has interests in electric power generation facilities. As of December 31, 2007, it had 7744 millions of barrels of liquid proved reserves, and 32,610 billions of cubic feet of proved reserves of natural gas. Exxon Mobil also operated 16,797 gross wells. The company operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America. ExxonMobil is also investing $600 million in renewable biofuel development.

2. Royal Dutch Shell (RDS.A) – Solid BUY at $39 per share. 3-year CGR % Revenues 10.29%. It operates in five segments: Exploration and Production, Gas and Power, Oil Sands, Oil Products, and Chemicals. The Exploration and Production segment engages in the upstream activities of acquiring, exploring, developing, and producing oil and gas. This segment searches for and recovers oil and natural gas primarily in Europe, Africa, Middle East, Russia, Asia Pacific, and the Americas. As of December 31, 2007, it had proved, developed, and undeveloped reserves of 6,686 million barrels of oil equivalent. The Gas and Power segment liquefies and transports natural gas, and develops natural gas markets and related infrastructure. Its gas to liquids process turns natural gas into cleaner-burning synthetic fuel and other products. This segment also develops wind power to generate electricity and invests in solar power technology. In addition, it licenses coal gasification technology, a cleaner way of turning coal into chemical feedstocks and energy. The Oil Sands segment engages in downstream activities of producing synthetic crude oils for use as refinery feedstocks. It extracts bitumen from oil sands in Alberta, western Canada and converts it to synthetic crude oils. The Oil Products segment turns crude oil and synthetic crude into a range of refined products for domestic, industrial, and transport use. These products include gasoline, diesel, heating oil, aviation fuel, marine fuel, lubricants, and bitumen. This segment also develops biofuels and hydrogen. In addition, it operates a branded fuel retail network of 46,000 service stations worldwide. Shell-CODEXIS has invested over $30 million is biofuel development.

3. Total SA (TOT) – Solid BUY at $41 per share. 3-year CGR % Revenues 3.7%. The company operates as an integrated oil and gas company worldwide. It has three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and natural gas. It also involves in the marketing, trading, transport, and storage of natural gas and liquefied natural gas (LNG), LNG re-gasification, and the maritime transport and trading of liquefied petroleum gas. This segment also engages in power generation from gas-fired combined-cycle plants and renewable energies; trading and marketing of electricity; and production and marketing of coal. As of December 31, 2007, it had proved reserves of 10,449 Mboe of crude oil and natural gas. The Downstream segment engages in refining, marketing, trading, and shipping of crude oil and petroleum products. It produces a range of specialty products, such as lubricants, liquefied petroleum gas, jet fuel, special fluids, bitumen, and petrochemical feedstock. The company held interests in 25 refineries located in Europe, the United States, the French West Indies, Africa, and China, as well as operated a network of 16,497 retail stations worldwide. The Chemical segment produces base chemicals, with petrochemicals and fertilizers, and specialties, as well as involves in rubber processing, resins, adhesives, and electroplating activities.

4. Chevron Corporation (CVX) – Solid BUY at $39 per share. 3-year CGR % Revenues 14.43%. Its petroleum operations consist of exploring, developing, and producing crude oil and natural gas; refining crude oil into finished petroleum products; marketing crude oil, natural gas, and various products derived from petroleum; and transporting crude oil, natural gas, and petroleum products by pipeline, marine vessel, motor equipment, and rail car. The company's chemical operations include the manufacture and marketing of commodity petrochemicals, fuel, and lubricating oil additives. It also engages in coal mining, power generation, insurance, and real estate activities. As of December 31, 2005, the company's oil-equivalent reserves comprised 9.0 billion barrels. It also had 19 fuel refineries and an asphalt plant.

5. British Petroleum (BP) – Solid BUY at $35 per share. 3-year CGR % Revenues -.08%. provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. It operates in two segments, Exploration and Production, and Refining and Marketing. The Exploration and Production segment engages in the oil and natural gas exploration, development, and production; and marketing and trading of natural gas liquids, liquefied natural gas (LNG), and gas and power. It has exploration and production activities in the United States, the United Kingdom, Angola, Azerbaijan, Canada, Egypt, Russia, and Trinidad and Tobago, as well as in Asia Pacific, Latin America, and the Middle East. This segment also owns and manages crude oil and natural gas pipelines; processing and export terminals; and LNG processing facilities and transportation. BP p.l.c. has interests in the Trans Alaska Pipeline System, the Forties Pipeline System, the Central Area Transmission System pipeline, and Baku-Tbilisi-Ceyhan pipeline, as well as in LNG plants located in Trinidad, Indonesia, and Australia. As of December 31, 2007, the company had net proved developed and undeveloped reserves of 5,492 million barrels of liquids and 41,130 billion cubic feet of natural gas. The Refining and Marketing segment engages in the supply and trading, refining, marketing, and transportation of crude oil, petroleum, and chemical products to wholesale and retail customers under the Amoco and BP brands. The company also involves in processing, fractionating, and marketing of ethane, propane, butanes, and pentanes extracted from natural gas; low-carbon power generation; and production and marketing of aluminum coils to the beverage can business. The company operates in Europe, the United States, Canada, Russia, South America, Australasia, Asia, and Africa. BP has invested over $20 million in algae renewable biofuel development.

6. Rosneft Oil – headquartered in the Russian Federation, the company has a 3-year CGR % Revenues of 120%. Together with its subsidiaries, engages in the exploration, development, production, and sale of crude oil and gas in the Russian Federation and internationally. It also engages in the refining, transportation, and sale of petroleum products. In addition, the company provides banking and financial services; field survey and gas processing; and drilling and construction services to third parties. As of December 31, 2007, it had a 20% share in the Sakhalin-1 project, which is being developed under a production sharing agreement (PSA), as well as in Sakhalin-5 project; interests in other projects associated with the exploration and development of the Zapadno-Shmidtovsky and Vostochno-Shmidtovsky blocks; and a PSA agreement with the Kazakhstan Government for the development of the Kurmangazy oil and gas prospect. The company also had 50.0% share in gas produced by Polar Lights that engages in the development of the Ardalin and satellite fields in the Timan-Pechora Basin; and 49.4% share in gas produced by Udmurtneft. The company just posted 54.2% increased revenues for Q2 2009.

7. Reliance Industries – the company is India's largest private sector enterprise. together with its subsidiaries, engages in the exploration and production of oil and gas in India and internationally. It also engages in the production and marketing of petrochemical products, such as high and low density polyethylene, polypropylene, polyvinyl chloride, poly butadiene rubber, polyester yarn, polyester fibers, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics, butadiene, linear alkyl benzene, polyethylene terephthalate, acrylonitrile, and caustic soda. In addition, the company involves in refining petroleum products, including liquefied petroleum gas, propylene, naphtha, gasoline, jet/aviation turbine fuel, kerosene oil, high speed diesel, sulphur, and petroleum coke, as well as engages in petroleum retail. Further, it offers chemicals, such as linear alkyl benzene; fiber intermediates, including paraxylene, purified terephthalic acid, and mono ethylene glycol; and polyester products, including staple fiber, filament yarn, texturised yarn, twisted/dyed yarn, stretch yarns, cotton look and cotton feel yarns, hollow fibers, secondary reinforcement products, and polyethylene terephthalate. Additionally, the company produces various textiles, such as suitings, shirtings, readymade garments, furnishing fabrics, day curtains, automotive upholstery, ready-to-stitch, and take away fabric, as well as offers marque for textiles. It also operates retail stores, including food and grocery specialty stores; mini hypermarkets; hypermarkets; electronics specialty stores; Apple stores; apparel specialty stores; health, wellness, and pharma specialty stores; footwear specialty stores; jewelry specialty stores; convenience shopping; and books, music, toys, and gifts specialty stores, as well as offers transportation fuels, fleet management services, highway hospitality services, and vehicle care services. The company has reported 24.4% decline in quarterly revenues in June 2009.

The Top Asian Oil Energy Companies

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Comments

[gato:]

James,
You listed CVX (to day 09/02/09) a solid buy at $39 per share Duh?, the ..."REAL" ...quoted price is (CVX) $68.42..what gives?..Not too cool!..If you can't get something as simple as that right, you're info. is usless, 'an, that's too bad,.. 'cause you have nice charts and a good presentation...but, hey man you blew it!
gato

Sep 02 03:47 PM