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On a recently published research note, Bank of Amerca Merryl Lynch concludes that Occidental Petroleum Corp
OXY is poised to deliver stated targets as well as exceed production guidance as the company hits record level on activity in the lower 48 states.
According to Bank of America, "By y/end 2011, OXY's rig count will likely have doubled, positioning the Permian for growth – but also its new entry position in the Bakken further justifying the swap in Argentina and a more pragmatic view of oil prices. But it is California that is set to step higher: critically we note changes in the administration at the California DOG: while it is early days the pace of new permits may just turn higher. Regardless, OXY is already signaling a further step up in rig count by mid year 2012; along with the long awaited start up of the new gas plant on May 1st, we expect 2012 production to beat the top end of its 5%-8% guidance range. Recognizing the upside from a higher rig count we are raising our price target to $150."
OXY closed Friday's trading at $97.64/share.
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