TurnkeyOil's  Instablog

Natural gas has been coming back recently and the top companies seem pretty confident about its future. See what they have to say about the current state of the market and their way of profiting from it.

Exxon Mobil was asked in its Q3 conference call if the decline in drilling rigs directed at their unconventional natural gas acreage was going to result in pretty rapid declines in production in 2012. Exxon' reply was:

We will see how things go. I will tell you, in some areas, we've been actually able to keep the volumes flat, while reducing the rigs due to efficiencies we have gained, rates of drilled wells and that sort of thing. So we have been able to offset some of this decline in rigs with some improved operations and productivity.

Chesapeake is the number two producer in the country and has been responsible for a lot of the drilling that has been done at what have been uneconomic prices. You don't have to go far into the Chesapeake third quarter call to find some pretty interesting comments about what the company thinks will happen with natural gas in 2013. CEO Aubrey McClendon observed:

Read Full Article Here: http://turnkeyoil.com/2012/12/04/top-producers-speak-about-natural-gas-future-apc-chk-eca-upl-xom/

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

What can you say about this company that hasn't already been said. They have consistently impressed the market and show no signs of slowing down. If after the company has a good run its still a good buy then everyone is jumping on board.

Kodiak Oil and Gas (KOG) can be considered a buy based on two factors: an investor's view of future Bakken oil prices and KOG's ability to continue to both increase its production and reduce its well costs as CEO Lynn Peterson has said it will do, and as the company has been doing.

KOG has achieved a hockey-stick increase in Bakken oil production from 3,953 BOE/D in the third quarter of 2011 to 15,855 BOE/D in the third quarter of 2012. Operating income increased similarly, from $11.3 million in 3rd quarter of 2011 to $36.3 million in the third quarter of 2012. Although the stock has a steep trailing price-earnings ratio of 37, its forward price-earnings ratio is 12.5. Discounted in its current share price is KOG's solid position as one of the leading drillers in a prime US oil basin. Lagniappe is its status as a potential takeover target. Owning KOG is as close as an investor can get to owning oil without possessing the physical barrels.

KOG has a robust 53% ratio of liabilities to assets, 155,000 net Bakken acres, and expects to exit 2012 producing 27,000 BOE/D. Its current production is about 20,000 BOE/D, and 86% of its reserves are oil.

Read Full Article Here: http://turnkeyoil.com/2012/12/02/kodiak-keeps-charging-forward-kog/

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

With less and less drilling over the last few years there hasn't been much action when it comes to drilling companies. But things are shaping up as natural gas is getting a new push from price increases and newly discovered oil patches fight for rig time. These sleeping giants are looking more and more attractive as drilling companies start to out perform their share prices.

After trailing the market since 2010, energy services stocks Diamond Offshore (DO) and Noble Corporation (NE) are starting to show signs of life again.

Earnings are reversing their late decade slide.

At Diamond Offshore, earnings per share peaked at $9.89 in 2009 before retreating to $4.63 in 2012. However, this year may be the trough for earnings. Analysts are projecting a return to earnings growth in FY13, with consensus looking for a 14% lift to $5.27. This would mark the most substantial percentage gain in earnings since 2008.

At Noble, earnings similarly peaked in 2009, at $6.41, before retreating to $1.30 in 2011. In 2012, they're expected to increase 75% to $2.28 and in FY13, they're expected to climb another 91% to $4.35.

Read Full Article Here: http://turnkeyoil.com/2012/11/30/drilling-companies-making-a-comeback-do-ne/

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.