What's Next For BP Following The $18.7 Billion Settlement?

This article was first published by Seeking Alpha on Jul. 3, 2015.

By Sarfaraz A. Khan

Royal Dutch Shell Takes The First Step, Focus Shifts To Exxon Mobil

This article was first published by Seeking Alpha on April 9, 2015.

By Sarfaraz A. Khan

Russia Experiences A Double Whammy As It Heads For A Recession

This article was first published by Seeking Alpha on January 1, 2015

By Sarfaraz A. Khan. Research Asst: Iffat Zehra

This has been a tough year for the Russian economy which had to deal with the US and EU's sanctions related to Russia's conflict with Ukraine as well as plunging oil prices. And it seems that the challenging times are here to stay.

BP Could Be Up for Grabs, but Who Can Buy the British Oil Behemoth?

This article was originally published by TheStreet on November 14, 2014

By Sarfaraz A. Khan. Research Asst. Omer E. 

NEW YORK (TheStreet) -- As mergers and acquisitions go, the energy industry has seen some of the biggest, from the $80 billion merger between Exxon and Mobil in 1998 to the $15.1 billion takeover of Canada's Nexen by China's CNOOC (CEO) in 2012. With the recent double-digit drop in crude prices, another acquisition could be on the horizon, this time, of European oil giant BP (BP) .

These U.S. Energy Stocks Might Get Trapped in Ukraine Conflict

This article was originally published by TheStreet on July 18, 2014.

By Sarfaraz A. Khan

NEW YORK (TheStreet) -- The Obama administration Wednesday announced its largest package yet of economic sanctions against Russia, hitting the country's biggest oil producer Rosneft (RNFTF_) and other energy firms in a move that could also wind up hurting U.S. energy companies that operate in the region.

Betting on BP

This article was originally published by TheStreet on April 29, 2014.

By Sarfaraz A. Khan. Research Assistant: Gohar Yousuf.

NEW YORK (TheStreet) - BP (BP_) may be a good bet despite all the bad news surrounding the company.

Earlier today, the major British oil company reported a 20% drop in first-quarter earnings. The company still hasn't recovered from the Gulf of Mexico oil disaster, and it's embroiled in Ukraine's crisis, as yesterday Obama administration put the name of the president of Rosneft, BP's partner in Russia, on the sanctions list. BP owns a 20% stake in state-controlled Rosneft.

But BP's American depositary receipts trade at just 6.7 times trailing earnings, and the company is increasing its dividend and promising more stock buybacks. BP raised its first-quarter dividend to 9.7 cents a share from 9 cents last year and said it would use asset sales to pay for more stock buybacks.

This European Oil Major Is Eyeing A Turnaround By Cutting Back On US Energy

This article was  originally published by GuruFocus on March 29, 2014

By Sarfaraz A. Khan. Research assistant: Gohar Yousuf

For the current fiscal year the Anglo-Dutch oil major Royal Dutch Shell (RDS.A) has decided to cut the upstream spending of its American business by 20%. The company will also implement job cuts as it restructures its American operations to make smaller “performance units.”

BP Returns From Exile, Wins Gulf Bids

This article was originally published by TheStreet on March 20, 2014

By Sarfaraz A. Khan, Research assistant: Gohar Yousuf
NEW YORK (TheStreet) -- A pariah from the Gulf of Mexico, British Petroleum (BP_), more commonly known as BP, has returned from exile.

After being banned from receiving U.S. government contracts and from participating in the lucrative Gulf of Mexico lease auctions, BP has finally won the confidence of regulators. The ban, which was imposed after the infamous 2010 deep-water Horizon disaster, has now been lifted.

As expected, BP participated in the government sale of Gulf of Mexico acreage held on Wednesday and ended up winning 24 of its 31 bids.

3 Undervalued Oil Majors Betting Big on Gulf of Mexico

By Sarfaraz A. Khan and Gohar Yousuf

Gulf of Mexico is one of the primary resources of energy for the U.S. Its offshore oil production represents a little less than a quarter of the U.S. crude oil production while its offshore natural gas production accounts for 7% of the total U.S. dry production. Its coast is home to 40% to America’s total refining capacity and 30% of America’s natural gas processing plant capacity. In short, its importance to America’s enormous energy industry cannot be overstated.

According to energy consultants Wood Mackenzie, the daily production from the deepest parts of Gulf, in water depths of more than 1,300 feet, will be around 1.5 million barrels of oil. This would represent more than a 15% increase from the projected production of 2013. Moreover, amid the increasing E&P activity, some of which is discussed below, by 2020, average production at the Gulf of Mexico is expected to cross ... read full article at GuruFocus

Why Investors Should Not Be Worried About Chevron's Massive CapEx

By Sarfaraz A. Khan and Gohar Yousuf

One of the world’s leading integrated energy companies, Chevron (CVX) has been spending enormous amounts of cash on some of its biggest projects to ramp up its production of oil and gas. As a result, the company has not returned as much cash to shareholders, through dividends and buybacks, as they would have liked. Following the global financial crisis, investors have favored companies with attractive dividends and buyback programs, as opposed to companies like Chevron, who invest in their long term future. This is one of the reasons why this oil giant’s shares have remained under pressure, despite having attractive long term growth prospects.

Going Over the Budget
In its most recent quarterly results, Chevron reported a 25.6% year-over-year increase in capital and exploration expenses to $10.59 billion. A significant portion of this increase was attributed to the company’s operations in the international markets, where its spending grew by 28% to $7.84 billion. In the U.S, Chevron spent around $2.7 billion, showing an increase of 18% from the same quarter last year. Overall, in the first nine months of the current year, Chevron has... read full article at GuruFocus

Tesoro: Refiner a Buy on Two Big Positives

This article was originally published by TheStreet on 11/18/13 - 06:00 AM EST

NEW YORK (TheStreet) -- Tesoro (TSO_) is one of the leading independent refiners and a marketer of petroleum products in the Western United States. The company operates through six refineries, with a combined capacity of more than 845,000 barrels per day while its marketing arm includes more than 2,000 retail stations, of which nearly 600 are operated by the company.

Tesoro recently reported its quarterly results in which it managed to beat the revenue but missed the earnings estimates. However, despite the mixed results, there are several catalysts at work that could give a boost to the company's shares in the near future.

Tesoro is eying considerable improvements in its output as well as its margins. With impressive growth prospects, a PEG ratio of just 0.45, which is the lowest in the industry, and a price-to-sales ratio of just 0.2, the company looks seriously undervalued. Therefore, I believe that Tesoro could be a healthy addition to your portfolio.

In its quarterly results announced earlier this month, Tesoro reported a 77.4% year-over-year drop in adjusted earnings to 44 cents per share, missing analysts' estimates by 5 cents per share. The massive decline was due to the 43% increase in operating expenses and a significant reduction in refining margins.

However, Tesoro's throughput increased by an impressive 57% year-over-year to 863,000 barrels per day. Earlier in June, Tesoro acquired BP's (BP_) Carson refinery and other related assets for $2.33 billion, including more than $1 billion of inventory. This acquisition has given a boost to the company's output from its Los Angeles operations, which now includes the Wilmington and the newly purchased Carson refineries. With the exception of its Mid-Continent business, where its output fell 2%, Tesoro's refineries in all other regions reported an increase in throughput.

What Makes This European Oil Major A Buy?

From The Motley Fool, Published September 7, 2013

The European oil major, British Petroleum  (NYSE: BP  ) released its quarterly results that were a disappointment. The company's income dropped significantly due to falling oil prices, a higher tax rate and lower income from Russia. Its stock has under performed while it continues to face legal challenges from the oil spill disaster. But BP pays out healthy dividends, has high quality assets and I believe it can be a good investment for those looking for long term growth.

Quarterly ResultsBP's adjusted net income dropped from $3.6 billion in last years second quarter to $2.7 billion this past quarter, which is significantly below the market's expectations of $3.4 billion. This was attributed to lower oil prices, an unusually large underlying effective tax rate of 45%, as opposed to 35% the year before, and a drop in profits from Russia due to the Russian oil export duties and weakness in the Ruble. 

Dividend and BuybacksAlthough shares of European oil majors, such as BP and Shell (NYSE: RDS-A  ) have under performed as compared to the broader market

BP: The Good, the Bad and the Ugly

From The Motley Fool, Date May 30, 2013

The European oil major BP (NYSE: BP) recently released its quarterly results. The performance follows the mammoth deal with Russian oil giant Rosneft, which is the seventh-largest holding in the Market Vector Russia ETF (NYSEMKT: RSX) and the ninth-largest in the iShares MSCI Russia Capped Index Fund (NYSEMKT: ERUS). However, the ghosts from the Gulf of Mexico oil spill continue to haunt BP’s investors. Let's take a look at the ETFs first.

European Oil Majors Are Eyeing India's Natural Gas Sector

From Seeking Alpha

India is home to more than a billion people with a burgeoning middle class and is targeting economic growth of more than 6% for the next couple of years. Like other emerging markets that have grown rapidly in the last decade, India needs lots of fuel to pump its economy but big oil has largely shied away from making significant investments in the country.  However, in February, two of the leading European oil firms have announced their Indian investment plans worth billions of dollars.

The Anglo-Dutch oil major Royal Dutch Shell (NYSE:RDS.A), has decided to invest around $1 billion to develop a floating liquefied natural gas terminal off the coast of Kakinada in the state of Andhra Pradesh as early as 2014 through a joint venture with the Indian billionaire Anil Ambani’s Reliance Power, India’s biggest private sector power generation firm. Shell currently has an LNG import plant in the state of Gujarat which has a capacity of 3.6 million ton; which will be gradually upgraded to 10 million tons by the end of next four years. The demand for natural gas in India has been growing and is expected to increase by 280% from the current levels to ….. read more
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