BP PLC (BP)

(Market Call Minute) $140 Billion market cap and $25 Billion in Gulf liabilities remain.

(A Top Pick Oct 15/12. Up 10.35%.). The catalyst for the stock is going to be the end of litigation with regards to the Gulf of Mexico story. Operations are improving. They are pruning their assets. Have their big Russian exposure now. Good story.

Doesn’t like. Integrated oils are tough to begin with but this one has its own issues. Prefers TOT-N. Thinks TOT does a very good job. Prefers service companies because of more predictable growth. Likes COSL. Also SCL-T.

The story on this is the liability surrounding the Gulf of Mexico oil spill. His understanding is that the liability has been adequately provisioned. The only upside to the liability claim would be that the US government would have to prove gross negligence, which is very difficult to prove. Likes the story long-term and he can see more upside. Attractive dividend that is safe. Definitely an out of favour occurring value story and if you are this kind of investor, this is one you want to own.

Stock has been flat over the last year. The trouble with many of the major oil companies is that they are going to have a very difficult time finding new assets that are going to give them growth. 5.2% dividend yield.

(A Top Pick July 13/12. Up 13.57%.) Longer-term, the catalyst here is going to be the conclusion of litigation so he has some fairly bullish upside once that litigation is removed.

This company is on sale. Has a big litigation overhang. Had to sell off some assets and build a provision for the liability. Once the liability is removed, likely this year, stock should move higher. Recently sold off their Russian assets and rolled the majority of the proceeds into Rosniv (?), a substantial Russian oil company. With the balance of their $8 billion they are going to buy back shares and he sees some lift there. 5.13% dividend yield.

Has gone through a very, very difficult time and he doesn’t think the legal issues are all over with but feels they are benign at best and it’s just about writing a cheque. Sold off their Russian assets for a reasonable price and now the question is, will they be able to reinvest those assets and get a better return off them.

Litigation and Gulf of Mexico is not the issue with share price. It is built into the price. The issue with these oil companies is that it is tough for them to grow. Can they find and extract oil at a reasonable price. These companies need big assets to grow. They are getting very cheap and they are paying a good dividend. It is safe. 5.3%. This is a good point to buy them. Prefers CVE-T, however.

Stock is substantially on sale because of liability issues surrounding the Gulf of Mexico. Most of that is very well provisioned. Owns a ton of cash. Doesn’t think gross negligence will be proven. Good balance sheet and good dividend of 4.94%. Once settlement is actually finalized, you’ll find that a lot of capital is being raised so they can tie in high impact explorations. Just recently made a $20 million gain on the sale of the TNK assets. Also, they could buy back, up to 3% of shares.

Was involved in a lot of legal issues, which are now almost all behind them. Sold off non-core assets and management is really making an effort to make it a better company. Not an expensive stock. He prefers Canada, which has a number of wonderful oil companies although they are not getting the international oil prices.

Near 5% dividend. More of a capital gains story longer term. Sold off T&K joint venture assets. Stock is on sale because of Gulf Liability, which starting to reach conclusion. Repositioning portfolio for growth. $41-$42 Could double in 3-4 years. In the next year could breach $50

(Market Call Minute.) Off slightly over the last year. Has been banned from doing US government contracts. PE of 6.9 and the yield of 5.3% so it is probably a buy.

Big overhang on this is the Gulf of Mexico liability. For the most part, barring the US governments’ award of gross negligence, it should be well provisioned on the liability front. Selling off some of their old legacy assets and putting that capital to work into newer higher octane opportunities. 4.5% dividend.

(Market Call Minute) Expects asset sells to continue. Mexico is well resourced and it will grow moving forward. Thinks it will enter an exit-buying program.