Barclays on U.S. Oil & Gas: E&P (Mid-Cap): Liquids Shift Could Drive Margin Improvement

Barclays on U.S. Oil & Gas: E&P (Mid-Cap): Liquids Shift Could Drive Margin Improvement

Analyst, Jeffrey W. Robertson, said, "We estimate that the aggregate production mix for our producer group will shift to 39% liquids in 2012 and 41% in 2013. Given our commodity price outlook, the shift could lead to cash margin improvement for those companies undergoing the most significant transition such as Penn Virginia (NYSE: PVA) and Crimson Exploration (Nasdaq: CXPO). We remain cautious on the gas outlook and continue to favor oil names within our coverage. Our favorite names are Denbury Resources (NYSE: DNR), Plains Exploration & Production (NYSE: PXP), Whiting Petroleum (NYSE: WLL) WLL, and SM Energy (NYSE SM)."

Barclays maintains an Overweight rating on DNR, raises PT by $2 to $26, and raises FY estimates from $1.45 to $1.60.

Maintains an 'Equalweight' on Exco Resources (NYSE: XCO), lowers PT from $7.00 to 5.00, and cuts FY EPS esitmate from $0.35 to $0.10.

Maintains an 'Overweight' on Plains Exploration & Production (NYSE: PXP), raises PT from $51.00 to $54.00, cut FY EPS estimate from $2.65 to 2.30.

Maintains an 'Overweight' on Stone Energy (NYSE: SGY) with an Overweight, raises PT by $1 to $44. FY EPS estimate increased from $4.10 to $4.20.

Maintains an 'Equalweight' rating on W&T Offshore (NYSE: WTI), raises PT $1 to $23. FY EPS estimate increased from $1.75 to $1.85.

Maintains an 'Overweight' on Whiting Petroleum (NYSE: WLL), raises PT from $70 to $74. FY EPS estimates loweref from $4.15 to $4.05.

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