"The big, integrated oil companies are known for their relative safety and stability, and most have been paying dividends for many years " says energy expert Elliott Gue.
In his The Energy Strategist he explains, "These have been among the most reliable stocks investors can own in the long run." Here, he looks at Chevron (NYSE: CVX), which he calls his favorite among the US independent oil companies.
"Chevron remains relatively cheap in three valuation measures: price-to-barrel of oil equivalents; price-to-earnings and price-to-cash-flow. And while its 2.7% yield doesn't exactly make Chevron an income stock, it's consistently boosted that payout over time by more than 10% annualized over the past five years.
"Chevron is also one of the only Super Oils that will show meaningful growth in production over the coming few years. Even more important, it's scheduled to start up four major projects over just the next two years that will generate significant production growth upside near term. Here's a quick rundown:
"Tahiti is a deepwater field in the Gulf of Mexico where Chevron holds a 58% stake. The field is expected to have a peak production rate of 125,000 barrels of oil per day and 70 million cubic feet of natural gas.
"The project was delayed earlier this year because of some problems with parts on the floating production platform. Chevron is now on track to begin actual production in the third quarter of 2009.
"Blind Faith is another deepwater development in the Gulf where Chevron has a 75% interest. With the production platform and subsea infrastructure also nearing completion, Chevron expects Blind Faith production to begin in the second quarter of 2008.
"Agbami is a deepwater development offshore Nigeria in western Africa. Management believes the platform will be in place sometime in the first quarter of 2008 and the firm should begin production by the third quarter of 2008. Chevron has a 68% interest in the field.
"Finally, there's the Tengiz field located in Kazakhstan. This isn't a totally new project; it's simply the expansion of an existing production facility. What Chevron plans to do is to inject sour natural gas-gas with high-sulphur content-back into the Tengiz oil field to increase production.
"All told, Chevron's share of production from these four new projects is more than 400,000 barrels of oil per day worth of production. When you consider that Chevron currently produces about 2.6 million barrels of oil equivalent per day, these projects represent 15% of the company's total production.
"In addition to these near-term projects, Chevron has an impressive backlog of projects that are somewhat further from completion. An example of this is the massive Gorgon LNG project in Australia. This project off the coast of western Australia is the largest ever conducted in that nation. Chevron rates a buy."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
11-30-2007 @ 3:45PM
Fdelapuente.Esq said...
There is some much vagueness in this report that it is totally worthless. What do these remarks mean:
"among the most reliable" (the most rerliable?, second most relaiable? third? what?)
"in the long run" (the next 70 years?)
"one of the only Super Oils"
"meaningful growth" (50% growth?)
"over the coming years" (next 20 years?)