For Immediate Release
Chicago, IL – November 16, 2010 – Zacks.com Analyst Blog features: BP Plc (BP), Eni SpA (E), Occidental Petroleum Corporation (OXY), ExxonMobil Corporation (XOM) and AXIS Capital Holdings Limited (AXS).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
BP On Track to Meet Rumaila Target
BP Plc (BP) and its partner China National Petroleum Corp. (“CNPC”) are on track to meet their preliminary target of a 10% rise in output from the Rumaila oilfield by the end of this month. The growth in production was driven by continued focus on increasing oil production from existing wells, new wells coming on stream and an unperturbed flowline.
In 2009, BP and its Chinese partner CNPC clinched a 20-year development contract for Rumaila and set a target to increase output to 2.85 million barrels per day (bpd) in six years.
The Rumaila oil field, with an estimated crude reserve of 17 billion barrels, is a giant oil field located in southern Iraq, approximately 32 kilometers from the Kuwaiti border. It is the world's fourth largest oil field with a current capacity of 1 million bpd, almost half of Iraq's total output of 2.5 million bpd.
Another consortium led by Italian energy giant Eni SpA (E) also signed a 20-year contract with Iraq earlier this year for the development of the giant Zubair oil field. Eni, along with its U.S.-based partner Occidental Petroleum Corporation OXY and Korea Gas Corporation had set an output target of 1.2 million bpd on a baseline production level of 183,000 bpd.
The Iraqi government signed several developmental contracts with the oil companies that included Rumaila as well as Zubair oil field agreements. If successful, Iraq is expected to meet Saudi levels of 12 million bpd.
The alliances will be paid $2 for each extra barrel of oil the companies extract on top of the current production at both fields. Additionally, Iraq intends to revamp its infrastructure and export pipelines to cope with the growing production volumes. BP, CNPC, ExxonMobil Corporation (XOM) and Russia group Lukoil were among the companies interested in partly funding the export projects.
The Gulf of Mexico spill ruptured the basic fundamentals of BP. The distressed UK major is currently searching several alternatives to raise funds to meet the spill cost. We believe that keeping pace with the previous target in Iraq, in such a critical environment, is a positive direction toward the turnaround.
Recently, BP posted impressive third quarter results mainly on the back of higher realized oil prices, lower depreciation and lower-than-usual tax rates. The Gulf of Mexico oil spill tragedy has definitely ruptured the basic fundamentals of BP but its constant endeavor to fight the aftermath is appreciable.
We continue to see near-term headwinds with respect to weak U.S. refining margins and competitive disadvantages versus its European peers. Consequently, we retain our long-term Neutral recommendation on the company. BP holds a Zacks #3 Rank (short-term Hold rating).
AM Best Confirms AXIS Rating
Rating agency A.M. Best Co. affirmed the issuer credit rating (ICR) of “bbb+” and existing debt ratings of AXIS Capital Holdings Limited (AXS). The rating agency also affirmed the financial strength rating (FSR) of A (Excellent) and ICR of “a+” of AXIS Specialty and its operating affiliates. The outlook for all ratings remains stable.
A.M. Best Co. noted that AXIS' portfolio is well diversified, both geographically and by line of business. The company operates in Bermuda, the U.S., Singapore and Europe, with a focus on specialty insurance lines including property, marine and political risk, along with property catastrophe and other specialty reinsurance coverages.
The rating affirmation is based on AXIS' consistent performance, solid risk-based capitalization, robust enterprise risk management controls and experienced management team. Also, AXIS has been delivering a five-year average return on equity in the mid double-digit range as well as a five-year average combined ratio of approximately 85%. A.M. Best expects AXIS to maintain a total debt-to-capital ratio in the mid-teens to low twenties over the near term.
On the flip side, the company's exposure to large catastrophe losses coupled with a tough macro environment weigh on its positives. Though the company suffered huge realized and unrealized investment losses in 2008 and losses on specific investments and certain underwriting decisions in 2009, it has been able to manage the crisis effectively.
AXIS Capital reported third-quarter operating income of $1.22 per share, beating the Zacks Consensus Estimate as well as the year-ago figure.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com
AXIS CAP HLDGS (AXS): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
ENI SPA-ADR (E): Free Stock Analysis Report
OCCIDENTAL PET (OXY): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
Zacks Investment Research
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
