With the holiday season quickly approaching, the new year will be here before you know it. There is no reason not to start getting prepared for your 2012 stock play plans. Analysts and traders are beginning to talk 2012, are you going to be ready? Irfan Chaudhry has a few suggestions for your oil trades for 2012.

Trading Suggestions & Ideas:


Brent price may average US$101 per barrel in 2012 – which keeps GCC selling price well above their breakeven crude oil price – so strategic O/W on GCC (Saudi / Qatar)


Brent futures will be firmly back warded and WTI will also tilt long end down which will make USO a profitable investment vehicle because of positive roll yield.


Timing trades will outperform the secular trades in 2012 – as sentiment will fluctuate Best alpha generative equity long trade for 2012 will be buying on dips and selling on bumps of crude oil price (crude oil price as selling the equities).


Best trade ideas may relate to contracting spread between Brent and WTI.


Best energy complex trade idea in Q4 2011 is to bet on increase of refining margins from current of US$7.4 to US$10 per barrel by Q1 2012.


Crude oil price will have a strong correlation to the equity markets (>0.6) and may serve as a lead for inflection points.


Take these tips into consideration. At least ponder them in the coming months. They are good points and worth some thought. They may lead you in a direction of success for 2012.

We haven’t done any reporting on Talisman Energy in the past, but we recently came across and intriguing analysis of the company. Needless to say, it caught our interest, and we wanted to share the information with our readers. Shareholders Unite give the bare essentials that you need to know about this company, check out the stats.



Some metrics

Market cap: $15.36B on 1.02B shares outstanding (all of them in the float), 1.03M short
$3.93B in debt, 873M in cash
Enterprise value (EV): $18.4B
Production 420,000 BOE/d
Proven and probable (P2) reserves: 2.2BBOE
EV per P2 Barrel: $8.50
NPV (10) of P2 reserves about $18B
Cash flow $4 per share so P/CF of 3.75x
Dividend yield about 1.8%

Production Prospects

Opinions differ considerably about the immediate prospects. Zacks is rather negative and has cut the company’s stock to underperform on October 26 (with a $12 price target) following the cut in its annual production target for the second time in about two months. TLM expects repair work in the North Sea and weather-related issues in Canada to hurt operations and lower average output for 2011. They also cite low gas prices (in America) as a reason.


What do you think? They have a lot of production in the U.S. which is what we like. Additionally, they seem to be seeking additional assets and exploration locations. Sounds like an interesting company, doing interesting things.

The oil industry has seen some rough patches over the past year, and even the big oil companies have been hurting. Despite Exxon Mobil’s reducing production numbers, they have continuously been making some serious cash along the way. This shows how strong this company really is, and could continue to be. Agustino Fontevecchia explains how Exxon is able to beat the odds.

Revenue for the Irving, Texas-based oil giant was $125.3 billion, up 31.5%, despite falling production. While crude oil prices tanked through the third quarter, they were still up from a year ago, with both Brent and WTI crude trading at substantial premiums.

Exxon Mobil capitalized on higher energy prices, taking its upstream earnings up 187% to $8.4 billion. Increased prices for oil and natural gas across the board helped U.S. earnings increase 18.5% to $1.2 billion and international revenues jump 163% to $7.2 billion. Oil equivalent production, though, fell 4% to 4.282 billion barrels per day. The company blamed OPEC quota effects and divestments for the fall.

Downstream earnings surged on widening refining margins, coming in at $1.6 billion, up 36.1%. Volume and mix effects, along with a $1 billion refining margin expansion, pushed U.S. revenues to $810 million and international downstream revenues to $769 million.

Chemical earnings hit $1 billion.

“ExxonMobil’s results for the third quarter of 2011 reflect a continued commitment to operational integrity, disciplined investing and superior project execution,” said Exxon chairman Rex Tillerson.

The seasoned oil executive said capital and exploration expenditure totaled $8.6 billion in the third quarter, taking yearly expenditure to a record $26.7 billion for the first nine months as his company “continue[s] pursuing new opportunities to meet growing energy demand while supporting economic growth, including job creation.”

Exxon is clearly working hard to stay on top of their game and bring in cash for the company. They are playing the cards they were dealt, and playing them well. This is a strong company, and has the outlook to maintain this.

We have mentioned this before, and we will mention it again, M&A activity in the oil market is growing. Keeping your eyes open for buyout possibilities is probably a good idea if you want to make a solid investment. Well, luckily, we have found 3 possible candidates who could make you some cash on the buyout. Isac Simon suggests these three, and we think he is on the right track.



Increased production in the Bakken shale and higher price realizations ensured fantastic growth for this small cap. Revenues grew 106% to $5.9 million in the last fiscal year. Samson has focused more on liquids with oil production up by 106% to 64,000 barrels of oil. With more than 90% of existing reserves already developed, future cost of development should be a problem. Additionally, the company’s recent success in the promising Niobrara shale should fuel growth for the next few years. With a healthy cash balance of $58 million, it leaves ample room for further expansion. In short, this company’s properties are on the sweet spots.




The company’s strategy to spend heavily on its drilling projects might not look too attractive now. But once production starts picking up — which I’ll put my money on — things will start looking attractive. The second quarter saw a 106% rise in oil production and an 11% drop in natural gas production year over year. That’s clearly the transition this company has been making. Not surprisingly, the results are already showing with revenue jumping up 72% in the first half of 2011. In August, management increased capital expenditures by almost 40% to $1.8 billion, excluding acquisitions, for this year. That interests me. While a precise update isn’t currently available, I suspect a major drilling success that must have increased the company’s developed resources substantially.



This company has come a long way in the last 12 months. Somehow, its real potential never got reflected in its numbers. However, things have been changing since. This Bakken player operates on one of the sweetest spots in the region. With 93,000 net acres, Kodiak’s progress has been steady. The company took delivery of its fifth rig earlier this month and has a current production of more than 7,500 barrels of oil equivalent per day. Excluding acquisitions, Kodiak is confident of exiting this year at 9,000 BOE/D. Sales volumes grew substantially in the first nine months of the year — a fantastic 151% growth compared to the corresponding period last year. With more land acquisitions and an expanding pipeline infrastructure, Kodiak looks like a perfect growth stock. With a market cap of $1.3 billion, the company doesn’t look too hard to be acquired.



Each of these stocks are some of our favorite picks for 2011. If they sell out, they could be great money makers too. Some extra due diligence wouldn’t hurt here. Keeping up on the news of these companies could keep you on top and able to buy in before the buyout happens and the stock spikes.

Its always good to know when a stock is ready for purchase. Timing is everything when you are looking to buy in on a stock holding. Well, RPC, Inc. might be at a good point to buy in. Canaccord Genuity explains why now is a good time to buy in.

Following third quarter earnings from RPC, Inc (RES), Canaccord Genuity analyst Scott Burk upgraded his rating on the company to BUY from HOLD. Mr. Burk said:

“Under performance [of the stock] makes it attractive. RES hasn’t participated in the rebound of the last month, while its peers (excluding Complete Production Services (CPX)) are up ~30%. Year to date, the stock is up 4.5%, making it the cheapest in the sector. An acquisition still possible. Notwithstanding, there is a lack of near-term catalysts. Other than potentially being acquired, we see few near-term upside catalysts for the stock.”

Additional due diligence would be needed here, but because there is a recommendation to buy now, it worth the extra research. With acquisition potential, this could also lead to a great investment as well. Definitely consider this stock!

As always, some companies utilize some areas more than others. In this case, these select few companies are really using the Utica shale to make a name for themselves. They are creating a strong focus in this shale formation and creating strong exposure in the market place. Matthew Smith explains why these few companies are the select few.



One company which is not receiving its due is EV Energy Partners, LP (EVEP) which we believe is the best play in the Utica for investors seeking both yield and massive capital gains. We think the company has one of best land positions in the play. In fact, when Chesapeake wanted to lock up land for its 1.25 million net acre position, it went to EVEP and locked up land that way. EV Energy Partners has over 600,000 net acres in the Utica and according to our data is the second largest position in the play. EVEP also enjoys the fact that much of its land is held by production (HBP), thus it can develop it at its own pace and not pile on debt to fund exploration.



Gulfport Energy (GPOR), which is not just a Utica play, but a company with mature assets (generating cash flow) and other shale and oil sands plays is another favorite which we suspect will rise further due to its Utica leverage. Gulfport has been on a run as of late, up over 50% since it fell below $20/share. GPOR is focusing on oil in the Utica, and the company is looking to expand its acreage above its current holdings and commitments. GPOR is focusing on the wet gas and oil windows for these additions, not the dry gas window. In early 2012 Gulfport will begin drilling its Utica holdings.



If you are liking the looks of the Utica Shale play, these are a couple stocks that could make you a player. They know what they are doing out there, and will probably be the most likely to use it to their advantage. We are bullish about shale plays, and the Utica Shale is really beginning to gain momentum.

Chevron’s third quarter earnings report came out recently, and boy, did they cash in! Their earnings were up, along with their dividends. Despite the tumultuous oil market, seems Chevron plays their cards correctly in order to come out on top. Reuters explains what exactly happened in this last quarter.

Shares of Chevron closed 0.6 percent higher at $109.64 on Friday, within sight of their record high of $110, hit on Thursday. Third-quarter sales rose 26 percent to $61.26 billion, while its oil and gas output fell to 2.6 million barrels of oil equivalent per day from 2.74 million a year ago.

Getting production to grow remains a nagging problem for all the big oil companies. Chevron expects an increase of 100,000 to 150,000 barrels per day in the fourth quarter, driven by production in Thailand and the Gulf of Mexico from projects that are either new, upgraded or repaired.

The profit growth was driven by oil prices. Benchmark Brent crude averaged $112 per barrel in the quarter, up from $77 last year.

Chevron also recorded a gain of about $500 million from the sale of its British refinery to Valero Energy.

This week, the company increased its dividend for the second time this year, by 3.8 percent. Pat Yarrington, the company’s chief financial officer, said this reflected confidence in its net cash position of $10.6 billion, though she acknowledged some investors would prefer more share buybacks and said the board would always consider that.

Keep up the good work Chevron! They are looking good for investors, not to mention themselves. It will be interesting to see what comes out next quarter. Hopefully they can keep the momentum going.

We always like to listen to what the big name analysts have to say. Recently, Jim Cramer released his newest energy stock picks, and there a few that we like too. If you aren’t invested in these stocks yet, start your research here! Insider Monkey listed the stocks the Cramer liked best.



ConocoPhillips (COP): ConocoPhillips is an international, integrated energy company. COP has a market cap of $98.5B, a P/E ratio of 9.19, and returned 9.26% since the beginning of this year. Jean-Marie Eveillard had $438 million invested in COP shares. Bill Miller and Warren Buffett also had COP shares in their portfolio.


Devon Energy (DVN): Devon is an independent energy company engaged in exploration, development and production of natural gas and oil. DVN has a market cap of $28.4B, a P/E ratio of 19.99, and lost 12.62% since the beginning of this year. Jean-Marie Eveillard and Ric Dillon both had over $200 million invested in DVN stocks.



Halliburton (HAL): Halliburton provides a range of services and products for the exploration, development, and production of oil and natural gas around the world. HAL has a market cap of $36.0B, a P/E ratio of 13.22, and lost 3.60% since the beginning of this year. Ken Fisher had $285 million invested in HAL. Ken Griffin’s Citadel also invested more than $100 million in the stock.



If you want more choices, Cramer always has more. However, these are our favorites. Additional due diligence wouldn’t hurt with these big name stocks. Happy investing!

Oil refiners saw a little dip in the markets due to decreased oil demand and supply. However, now that oil prices are beginning to see a bit of a turn around, refiners are starting to see business picking back up. There has been more positive news in the oil markets lately, and luckily these refiners are a part of that good news. Paul Ausick tells us which companies are seeing the benefits and how they are benefiting.



Refiner Tesoro Corp. (NYSE: TSO) reported third-quarter EPS last night of $2.39, some $0.41 above the consensus estimate. The largest US refiner, Valero Energy Corp. (NYSE: VLO), posted EPS for the third-quarter of $2.11, well above estimates of $1.80. Marathon Petroleum Corp. (NYSE: MPC) reported EPS for the quarter of $3.16, way above estimates of $2.44. Refining margins also boosted earnings for the major integrated oil giants BP plc (NYSE: BP), Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), and ConocoPhillips Corp. (NYSE: COP).


Murphy Oil Co. (NYSE: MUR) reported EPS of $1.73, excluding discontinued operations, compared with a consensus estimate of $1.18. The company attributed the increase to higher prices for its crude production and higher refining margins. Exploration & production revenue rose about 40%, while refining & marketing revenue rose more than 52%.


Watch oil prices closely, they strongly effect the markets, including those refiners out there. The news has been good, lets hope it stays that way so these refiners can remain on top for a bit longer than the recent status quo.

Pioneer Natural Resources saw major stock jumps recently. As we all know, there is always a good reason why stocks make big jumps. So why did PXD see the jumps this time around? Travis Hoium lets us in on the secret.



What: Shares of oil & gas explorer Pioneer Natural Resources (NYSE: PXD ) jumped 10% today after the company released earnings.

So what: Revenue during the third quarter jumped 40% to $610.5 million and adjusted earnings per share were $1.35, topping estimates of $0.87. During the fourth quarter, management expects to produce 136 to 141 thousand barrels of oil equivalent per day.



In the next year, management in working to expand their operations and production even further. This could be mean even more growth for this stock in 2012. Watch this stock, it could pop again, and may be worth holding long term.