Goldman tags WPX Energy as a Sell

Amid Goldman's considerable optimism over the Bakken shale play and others, the firm's lone Sell recommendation stands out like the skunk at a garden party: WPX Energy (WPX -1.1%).

The firm says WPX has a lower-than-average resource life in key shale plays, lacks scale in any of the top tier resource plays, has the lowest rate of cash return on capital invested, and its valuation implies underperformance in the next 12 months.

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Comments (2)
  • joker
    , contributor
    Comments (171) | Send Message
    This guy is totally laughable. Regarding WPX, he slapped a $18, then cited that WPX's has "6% downside to its price target suggest weakness over the next 12 months", thus should SELL.


    WPX is essentially a pure NatGas play, plain and simple. It has tremendous amount of proved reserves, and more is coming on. As for oil play - if they can find some thus improve cash flow position, that is great. Even if not much oil, so what? Oil has been at the historical high level, and all the oil players should have seen their best days under the sun. Why now they are promoting for SMID oil plays? Do they think Oil will go to $150, or $200 per bbl?


    On the other hand, NatGas is deeply depressed in N.A - just check the prices around the world. If you believe the world is a free market - eventually, then it's a no-brainer to bet on the rise of NatGas prices. In that environment, companies like WPX, those with huge NatGas reserves, will out-shoot those oil plays by miles.
    24 Sep 2013, 03:08 PM Reply Like
  • Ernie Mac
    , contributor
    Comments (5885) | Send Message
    Goldman's record in the energy space is not exactly sterling. Remember when they forecast oil to go to $150 per barrel? I never pay attention to Goldman's research recommendations because of their proprietary trading positions.


    WPX is selling at a big discount to the value of its natural gas reserves. That is the key investment thesis and not ancillary oil reserves that it might discover.
    17 Oct 2013, 12:31 PM Reply Like
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