CreditSights Raises Earnings Estimates for Oil and Gas Sector
CreditSights has raised its earnings estimates for oil and gas companies, based on a revised assumption of $106-a-barrel oil and other recent developments.
Among integrated companies, Hess (NYSE: HES) and Murphy Oil (NYSE: MUR) post the biggest increases given their heavier weighting in Exploration and Production over Refining, versus ConocoPhillips (NYSE: COP) and Marathon Oil (NYSE: MR) driven both by the weak Refining outlook as well as production delays.
In the E&P group, earnings estimates have risen the most for Anadarko (NYSE: APC), EOG Resources (NYSE: EOG), and Pioneer (NYSE: PXD) “driven both by our higher commodity price deck as well as increased production guidance.” Estimates for Newfield Exploration (NYSE: NFX) and Chesapeake Energy (NYSE:CHK) rise the least, given ineffective hedging positions at significantly lower price points.
We continue to view the sector as a strong defensive play and expect strong financial results even at our conservative price deck.
Detailed estimates by company are available in the CreditSights report Oil & Gas: Raising 2008 Estimates for the Integrateds and E&P.
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