Introducing 14 International E&Ps and Six Play
Types That Changed the World
We are initiating research coverage of 14 International Exploration and Production (E&P) companies in the context of a Market Perform rating for the group. Collectively, this sector is defined by its exploration and development of hydrocarbons across the globe.
We have rated the companies as follows (sorted alphabetically). OPHR and CNE are rated Outperform (S).
• Outperform ratings: Africa Oil (AOI-TSXV, AOI-OMX), BG Group (BG.-LSE), Cairn Energy (CNE-LSE), Galp Energia
(GALP-XLIS), Genel Energy (top pick GENL-LSE), Ophir Energy (OPHR-LSE), SOCO International (SIA-LSE), Tullow
Oil (TLW-LSE).
• Market Perform ratings: Afren (AFR-LSE), Kosmos Energy (KOS-NYSE), Lundin Energy (LUPE-OMX, LUPE-TSX),
Repsol (REP-BME), Premier Oil (PMO-LSE), Statoil (STL-OL).
Catalyst driven sector. When deciding our recommendations, we look for unrealised value and a portfolio of potential events such as exploration wells in basins that have follow-on potential.
Our Outperform recommendations are largely based on the probability of a positive outcome from certain stock-specific events occurring over the coming 12-15 months. However, the stocks are largely trading at or near our risked Core NAV, which is based on a sum-of-the-parts breakdown of the portfolio of assets.
Six geological play types have yielded the majority of large conventional oil and gas discoveries over the past decade. We have looked for companies with unique exposure, insight and understanding of these plays.