Stockchase Opinions

Eric Nuttall WPX Energy Inc. WPX-N TOP PICK Dec 14, 2018

A pure Permian and Bakken play that has been hurt recently. On a 2020 year basis, once pipeline differentials go away this will trade up by 80% or more on a $60 oil price. Yield 0%. (Analysts’ price target is $22.95)
$12.080

Stock price when the opinion was issued

oil gas
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TOP PICK

A producer in the Permian region with a growth profile of up to 25% per year on current cash flows. He sees up to 90% upside under an $80 oil price scenario.

TOP PICK
Gives good exposure to the Permian with some Balkan. Growing by 22% this year. About a year out from buying back stock or dividends. There is 100% upside to this name with a recovering oil price. Has good exposure to light oil. Yield = 0.53% (Analysts’ price target is $149.00)
PAST TOP PICK
(A Top Pick Mar 15/18, Up 35%) It is a mid cap US player. Primarily Permian and US Balkan player. This company is growing by 22%. See very solid upside in this name.
PAST TOP PICK
(A Top Pick Dec 14/18, Up 16%) They are predominately in the Permian and Bakken areas. They have about 40 years of inventory. Management is focused on paying down debt.
BUY
His only U.S. oil holding. Super well run with great assets in the Permian and the Bakken. Lots of upside. The share price move does not reflect their fundamentals.
PAST TOP PICK
(A Top Pick Oct 19/18, Down 43%) Operationally they have done well. In the US, investor sentiment has plunged as well -- energy now about 4% of the index. Democratic Presidental Candidate Warren has promised to ban fracking across the US. This would be incredibly bullish to oil. He thinks Canada will benefit dramatically and has shifted his investment back home.
PAST TOP PICK
(A Top Pick Dec 14/18, Up 9%) He since repatriated all the money back to Canada. It is up about 30% because they just made an acquisition. They are monetizing the assets. Oil has gone up since they bought the asset. He still thinks there are better opportunities. He thinks valuations in Canada are lot more attractive.
PAST TOP PICK
(A Top Pick Mar 08/19, Up 4%) A modest win. They sold and bought it back in December. One of two US names that could attract investor interest. He liked the acquisition at 4 times cash flow, which allowed them to begin paying a dividend. Their drilling in the Permian can grow by 10% a year.
COMMENT

The best valuation opportunities are in Canada, he thinks. He would sell WPX for the tax loss and buy Parsley instead, who has better exposure to Canada.