Diamondback Energy Is Down, Could It Swing Up?
- Diamondback Energy is more profitable than its competitors at lower oil prices.
- The company's focus on the Permian has paid off with better-than-expected Spraberry wells.
- Since Diamondback is financed more by stock than debt, it has significant operating flexibility and oil price upside accrues to shareholders.
- The company's price-to-earnings ratio is high but it is well-positioned.
Moving Up With Marathon Petroleum Corporation
- Marathon Petroleum, and other refiners, have lower feedstock costs due to increasing domestic crude supply.
- Crude oil cannot be exported but products can. Both sides of this equation benefit Marathon Petroleum.
- Marathon's midstream operations, through its master limited partnership, give its refineries and retail system good synergies.
Can An Elephant Hide In Canada? Upside For Canadian Natural Resources Limited
- Canadian Natural Resources Limited (CNQ) continues to grow prudently within its heavy oil specialization.
- Second quarter 2014 results show solid increases from first quarter 2014 and from second quarter 2013.
- Given its prospects, the company's valuation compares favorably with its North American competitors.
- Canadian Natural Resources Limited pays a dividend.
Athletic Momentum For Athlon?
- Instability in oil-producing countries Iraq and Libya enhance the value of U.S. oil producers.
- The Permian play has traditionally produced from vertical wells; however, horizontal wells may access up to twelve productive zones, unique among all US producing basins.
- Athlon fits this niche as a Permian producer whose horizontal wells have been de-risked by its vertical well drilling experience.
Is There Hidden Value In Keeping Up With Jones Energy?
- Jones Energy's natural gas resources, location, and transportation access to major gas trunklines may not have received full recognition by the market.
- The Anadarko basin is fully leased; the only entry is by expanding existing production, as Jones is, or through asset/company acquisition.
- Only 25% of Jones Energy is public. The rest is held by private equity and management. It also has significant debt.
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