5 Companies to Watch as Oil Prices Rebound

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5 Companies to Watch as Oil Prices Rebound

FN Media Group Presents OilPrice.com News Commentary

PR Newswire

LONDON, April 19, 2018 /PRNewswire/ --

The world of energy is changing. Since 2014, the oil and gas industry has undergone major transformations. Traditional producers in the OPEC cartel have cut production to balance prices, while shale production from the U.S. has surged to capture market share.

All over the world, energy production and consumption has changed. And to thrive in the new environment, energy firms have had to adapt or fall behind. Luckily, while some have floundered, others have soared. Mentioned in today's commentary includes: Royal Dutch Shell RDS, BP BP, Concho Resources CXO, Hess Oil HES, National Oilwell Varco NOV

A major reason for this success is adapting to new sources of production, applying technologies to tap into brand new energy deposits, or shifting attention away from traditional crude output to more exciting, innovative projects.

Even with the ups-and-downs of the market, oil prices have risen $20 since last July. Now is an excellent time to take a fresh look at energy stocks.

Here are five companies that should be on everyone's radar:

#1 Royal Dutch Shell RDS

No major has adjusted to the changing conditions of world oil more than Royal Dutch Shell. And it's paid off. After a "year of transformation," Shell announced a boost in quarterly profits of 140 percent.

Profits shot up from $4.8 billion in 2016 to $13.4 billion in 2017. According to one analyst, Shell has been making "all the right moves."

The company's massive merger with BG Group was the turning point: from now on, Shell has an eye on gas markets. The reasons are simple: Shell believes natural gas demand will grow faster than oil demand, and it's preparing to meet that demand by moving more investment into upstream natural gas.

But that doesn't mean it's going to give up on oil altogether. Shell wants to boost its output from the U.S. shale fields by 200,000 boe/d by 2020.

Shell plans to shift 85 percent of its budget over the next two years towards new resources in the Permian Basin, as well as Canada's Duvernay Basin, according to Reuters. Given Shell's fantastic profitability, there's no question this stock will continue surging forward in the months to come.

#2 Stamper Oil & Gas (STMP, STMGF)

Stamper Oil & Gas can earn into a massive new find in Sudan…one that could be one of the last great elephant fields in the world.

Ten years ago, the area was explored by a Chinese company, which spent hundreds of millions searching for structural oil deposits…but came up with nothing. That's because the oil in Block 25 of the Al-Rawat field isn't structural, but stratigraphic. It's locked away in sandstone and shale and requires specialized methods to extract. The Chinese knew there was oil, but they deployed the wrong methods to extract it.

Work ongoing now at Block 25 is based on the knowledge of geophysicist George Fulford, "Mr. 99 percent," who drilled 77 wells in Sudan and achieved a near perfect success rate. He recommended to Sudanese drillers that they search for stratigraphic deposits, and sure enough, they uncovered probable reserves holding an estimated 182 million barrels.

The Chinese spent hundreds of millions shooting or acquiring 6,700 km of 2D seismic, shooting almost 1,000 sq. km of 3D seismic and drilling 13 oil wells. The new owners, which will include Stamper, are benefitting hugely from all that data.

The Block 25 oil fields have 6,000 bpd ready to produce and will add the 33 identified targets as they are drilled and come on line. Stamper has a unique opportunity to earn in to a potentially huge oilfield…all for a company with a $15 million market cap.

Stamper Oil & Gas has a Memorandum of Understanding with State Oil Corporation. State may farm-in up to a 50 percent interest in the Al-Rawat field pursuant to the MOU with Sudan company Sudapet.

Apart from Fulford, who worked in Sudan between 1994 and 2003 and became a legend in the Sudanese oil and gas industry, Stamper benefits from the leadership of CEO David Greenway and board Chairman Lutfur Rahman Khan, who turned a 12.2 million acre Sudanese oil play into a rich reserve worth 1 billion barrels.

CFO David Alexander has thirty years of experience in international finance and has helped identify stressed assets and developed a framework to realize value from those assets in excess of $1 billion. As CFO of Arakis Energy Corporation in the early 1990s, Mr. Alexander helped manage the company's growth from startup to over a billion barrel in reserves primarily in Sudan. Arakis was subsequently sold to Talisman Energy.

With this leadership, Stamper should prove more than capable of profiting from this new opportunity in Sudan.

#3 BP BP

BP's profits doubled in 2017 to $6.2 billion, thanks to higher prices and a boost in output.

The year was a good one for a company that struggled for years in the wake of the 2010 Deepwater Horizon disaster in the Gulf of Mexico: 2017 saw a return to production levels not seen since the spill. The company benefited from the bullish trend in prices, and emerged in 2018 as a strong income vehicle in energy and an appealing choice for investors hoping to benefit from a reliable dividend. It continues to perform strongly.

More than anything else, the future of energy will be competitive: BP pointed out how coal, natural gas, oil and renewables will all be competing for market share.

To meet those competing demands, BP is diversified in oil and gas, and like Shell sees the future of energy as more complex than the simple demand for crude. You can bet this company is ready for anything the shifting energy market can throw its way.

#4 Concho Resources CXO

This energy industry darling just penned a huge deal, one that will make it the biggest player in the U.S. Permian Basin. Concho Resources announced its acquisition of RSP Permian, a fellow shale driller, for a whopping $9.5 billion or $72,000 per acre.

The huge deal spooked investors, who had warmed up to Concho in 2017, sending its share price up 9.7 percent. Investors started dumping the stock as soon as the deal was announced, wary that Concho could deliver results after spending so much.

The tumble was severe: Concho lost $2.6 million of its market cap in a matter of days.

But while the "sticker shock" of the deal might have sent the price down initially, Concho has proven it can deliver the goods.

For the last three years, Permian production has shot up, and up, and up. Right now, there are concerns that a shortage of pipeline capacity could cause a slowdown. But there's no question that the reserves in the basin will continue to be a juicy target: Rystad Energy predicted Permian production could reach 850,000 bpd in 2018.

And with its massive acreage, Concho will be at the center of that surge. The price may be down for now, but that just offers an opportunity for investors to buy low, before the price takes back off.

#5 Hess Oil HES

John Hess, CEO of Hess Oil, pronounced the mantra for 2018: "show me the money."

This year, what would matter was not production, but profits: after years of operating in the red, companies would have to start impressing markets with their ability to turn a healthy profit and deliver for shareholders.

And Hess Oil is making that a reality. The company owns a piece of a potentially-massive new offshore oil field in Guyana, which it will operate together with Exxon Mobil. The Payara field may produce 500,000 bpd, and Hess has already announced it plans to buy back $1 billion in stock.

Hess is making a major play to extend earnings to shareholders, and that has analysts excited. Even amidst widespread market volatility, Hess has performed well, climbing up from $42 in February to close above $52 in April.

On the basis of the Guyana investment, expect Hess to continue to profit in 2018.

Here is one other company to watch closely over the next 12 months:

National Oilwell Varco NOV: Its stock isn't as cheap as Transocean's, but it's still a good price, and this company will play a key role in the oil recovery when offshore rigs are reactivated-especially since it controls some 80 percent of all drilling-related equipment on rigs. The past three years have seen NOV skydive downwards 60 percent from its peak thanks to the oil price collapse. It's again at multi-year lows. But what looks good here is a drastic reduction in operating expenses.

By. Joao Piexe

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
 

Forward-Looking Statements 

This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements.  Forward looking statements in this release include that the Sudan oil discovery will prove as large and as significant as expected; that probably reserves can become proven reserves and that the reserves can be produced; that SOC will have sufficient funds to acquire and will pay for 35 percent of the developed oilfields of over $40M and then the undeveloped oilfields of over $26M,and that Stamper will be able to purchase 100 percent of SOC; that the Sudan project will be able to produce oil as currently scheduled and at the targeted low costs from its Sudan property; that STAMPER will obtain operating permits on its properties; that the oil when produced by STAMPER will be high quality suitable for standard use; and that STAMPER will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information.  Risks that could change or prevent these statements from coming to fruition include that Stamper may not get TSXV approval for its purchase of SOC; SOC may not be able to pay the costs of acquiring its 35 percent of Block 25; the group may not get regulatory approval for their operations, aspects or all of the properties' development may not be successful, production of oil may not be cost effective as expected; there is substantial political risk and also risk of war in Sudan, which have the potential of disrupting or destroying production and assets;  STAMPER may not raise sufficient funds to carry out its plans, changing costs for extraction and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and resource recoveries assumptions based on limited test work with further test work may not be viable; world oil prices may drop; the availability of  labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the oil reserves are not proven or cannot be economically produced on its properties, or that the required permits to build and operate the envisaged facilities cannot be obtained. Currently, STAMPER has no revenues. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

DISCLAIMERS

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively "the Company") has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by STAMPER seventy five thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:

This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by STAMPER to conduct investor awareness advertising for STMP and STMGF. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.

We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company's website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct.

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SOURCE OilPrice.com

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