Barclays on U.S. Oil Services & Drilling: Does Mid-$80s WTI Take Some Heat Off North America?
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Rating Summary:
45 Buy, 7 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Barclays on U.S. Oil Services & Drilling: Does Mid-$80s WTI Take Some Heat Off North America?
Barclays analyst, James C. West, said, "Current NAM Oil Prices ($83) Below Average 2011 Budgeted Levels: We recently revisited the oil price assumptions embedded in North American oil and gas company capital spending plans for 2011 that we compiled in June. The average oil price assumption for those companies as of our June report was $87 per barrel, with about half of North American companies using prices above $87. For those budgeting above $87 the average price used for spending budgets was actually $94 per barrel."
"51% of U.S. Oil Production WTI-linked: We believe WTI prices have fallen enough that if sustained could result in budget adjustments in North America. Roughly 51% of U.S. oil production is based on WTI prices and, on average, every $10 change in oil prices impacts cash flows of the large-cap E&Ps by 8%."
"Buy Quality: We think the recent downward move in the overall group is an
opportunity and recommend buying high quality companies. We continue to
de-emphasize North American land players and remain bullish on those companies with exposure to the international and the capital equipment cycles which are under way. Schlumberger (NYSE: SLB), Baker Hughes (NYSE: BHI), and Cameron (NYSE: CAM) are our favorites."
Barclays analyst, James C. West, said, "Current NAM Oil Prices ($83) Below Average 2011 Budgeted Levels: We recently revisited the oil price assumptions embedded in North American oil and gas company capital spending plans for 2011 that we compiled in June. The average oil price assumption for those companies as of our June report was $87 per barrel, with about half of North American companies using prices above $87. For those budgeting above $87 the average price used for spending budgets was actually $94 per barrel."
"51% of U.S. Oil Production WTI-linked: We believe WTI prices have fallen enough that if sustained could result in budget adjustments in North America. Roughly 51% of U.S. oil production is based on WTI prices and, on average, every $10 change in oil prices impacts cash flows of the large-cap E&Ps by 8%."
"Buy Quality: We think the recent downward move in the overall group is an
opportunity and recommend buying high quality companies. We continue to
de-emphasize North American land players and remain bullish on those companies with exposure to the international and the capital equipment cycles which are under way. Schlumberger (NYSE: SLB), Baker Hughes (NYSE: BHI), and Cameron (NYSE: CAM) are our favorites."
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