Paul Kuklinski, founder of independent research firm Boston Energy Research, selects equity investments in the energy sector for major institutional investors. For a copy of the complete analysis, e-mail firstname.lastname@example.org.
EOG Resources is the premier onshore U.S. crude oil producer, capable of sustaining many years of very high production growth supported by its exceptional acreage position and industry-leading technical advances. The stock is currently trading at $103 per share (as of May 5) and has an upside target of $209 per share, which is more than double its current price, over the next 12 months assuming a $62 per barrel WTI crude oil price.
With a market cap of $217 billion, Chevron competes with the likes of Exxon (XOM), Shell, BP and Total. CVX consistently ranks among the lowest cost producers in its nine-company peer group. Strong production growth is anticipated in 2018 and 2019.
Occidental Petroleum ranks among the largest independent oil producers with a market cap of $50 billion, and it sells at a premium multiple in its peer group. Our target for OXY stock is $89 per share, a 37% increase from current prices, based on a $60 per barrel WTI oil price in 2018 and its seven-year average 10.6x cash flow multiple on 2018 estimated cash flow of $8.41 per share.