On Apr 2, Zacks Investment Research upgraded oil and gas
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Statoil has been witnessing rising earnings estimates owing to
better-than-expected fourth-quarter 2012 results on the back of
higher gas sales volumes and margins as well as lower operating
costs. The company declared impressive results on Feb 7, 2013,
with adjusted earnings of 86 cents per ADR that comfortably
surpassed the Zacks Consensus Estimate of 68 cents. The results
also improved from the year-earlier adjusted earnings of 79 cents
Norway-based Statoil outperformed the Zacks Consensus Estimate in
three of the last four quarters by an average of 7.84%. The
company also has an impressive long-term expected earnings and
sales growth rate of 3.70% and 4.36%, respectively.
Based on its track record of sustaining volume growth, Statoil
reaffirmed its long-term production guidance. Statoil aims to
achieve an equity production of above 2.5 million barrels of oil
equivalent in 2020. The growth is expected to come from new
projects between 2014 and 2016, resulting in a CAGR of 2% to 3%
for the period 2012 to 2016.
Recently, Statoil claimed 15 leases in the central region of the
U.S. Gulf of Mexico (GoM) in an auction under the U.S. Bureau of
Ocean Energy Management. The addition will fortify its already
significant foothold in the region. Additionally, Statoil also
started production on the Stjerne field in the North Sea. This
marks the company's fifth fast-track project that came online
following the recent commencement of the Skuld field at Norne.
Based on Statoil's consistency in earnings, attractive
fundamentals and a positive outlook, the Zacks Consensus Estimate
for first quarter of 2013 went up 5.33% to 79 cents per ADR over
the last 60 days.
Other Stocks to Consider
Other stocks worth considering in the energy sector include
EPL Oil & Gas Inc.
Range Resources Corp.
PBF Energy Inc.
). All these firms - sporting a Zacks Rank #1 (Strong Buy) -
offer value and are worth accumulating at current levels.
EPL OIL&GAS INC (EPL): Free Stock Analysis
PBF ENERGY INC (PBF): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
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