Deutsche Bank Has Buy On Occidental Petroleum

Deutsche Bank has a Buy rating and a $126 price target on shares of Occidental Petroleum OXY after the company hosted an analyst meeting. In a note to clients, Deutsche Bank writes, "Of course the elephant in the room was California. Chazen spoke about operational constraints that support our view that although geology and scale here are considerable (200k derisked acres with "effectively infinite" well locations and some speaking of Oxy worth $200/share+), 1) permitting limitations, which are improving but remain a primary constraint 2) labour/services and 3) infrastructure will limit the play to the parameters outlined in our recent upgrade to Buy and $125/share price target. That uses $25/share of California value for a $121 NAV (note is "The Foxy in Oxy 4/29/11"). In the Middle East, the core value of Qatar and Oman is unaffected, possibly enhanced, by the Arab Spring and more revenue requirements ($13/share value) vs total uncertainty on Libya, Yemen ($5), and to a far lesser extent Bahrain and Abu Dhabi ($7). So we can write off Libya and Yemen and still retain $20/share of Middle East value." Shares of OXY gained $1.28 yesterday to close at $107.85, a gain of 1.2%.