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Saturday, 12/16/2006 9:57:32 PM

Saturday, December 16, 2006 9:57:32 PM

Post# of 187
NFX $48: Newfield Exploration shares are cheap around $48-Barron's
Barron's believes Wall Street is not giving Newfield Exploration (NFX) much credit for its diversification efforts away from the Gulf of Mexico and toward onshore wells and other sites "just about everywhere on earth." The company's best prospects are believed to be in the mid-continental U.S., where finds in Oklahoma's gas-rich Woodford Shale should drive Newfield's overall production by 20% to 25% in the coming year.

However, Barron's points out that the stock trades for just 9.7 times estimated 2007 earnings of $5.01 a share, 20% below its long-term average of 12, and below those of its larger peers EOG Resources (EOG) and XTO Energy (XTO). Bill Gerlach, lead manager at Gartmore Natural Resources Fund, says the stock’s relative valuation "is exciting, given the market's perception that it's primarily an offshore-exploration play, when in fact its onshore development -- particularly the Woodford Shale -- will substantially eclipse that over the next couple of years.



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