EOG Resources: Buy This Energy Stock Now For 2013 Earnings
Current shareholders should hold EOG Resources (EOG) as a long-term defensive position while interested investors may consider initiating a position before the upcoming earnings release. As 2012 US natural gas prices remain under pressure from oversupply driven by the shale boom and weak demand from mild winter weather, EOG has been successfully increasing liquid production. The main proponent driving the successful transition has been EOG’s success in the Eagle Ford play throughout 2012. EOG is one of the most successful E&Ps on Eagle Ford. This play is projected to be the most abundant source for boe in the US for future decades. EOG should realize increases in earnings with strong production from Eagle Ford, increasing production on its worldwide assets and once commodity prices start to rebound.
Apache (APA), Statoil (TSO), ConocoPhillips (COP) and Chevron (CVX) are the most comparable firms to EOG Resources. Chevron is one of the premier energy firms worldwide. Both EOG and Chevron currently trade for around $115 per share. Chevron has a project pipeline consisting of large-scale multi-year projects, a favorable balance sheet and enough capital for an acquisition in the near term. Apache and EOG Resources’ market caps are slightly over $30 billion. Statoil, ConocoPhillips and EOG Resources are all major E&Ps currently leading Eagle Ford production. EOG’s price is around 22 times earnings; this is more than double of each of the aforementioned firms. EOG’s price is 2.7 times sales and 2.3 times its book value; these are also both higher than of these firms. To continue reading, click here.