Here are some comments from Don Coxe this week that pertain to the US energy industry and the outlook for the sector:
As for the US energy stocks, there's absolutely no doubt in my mind that these stocks are going to have a wonderful year next year. Because even if Obama does win the election, I don't think he can win the election without a real deal being done on drilling.
The polls show that even among Democratic voters they want to drill. You saw that Governor Palin got her biggest cheers and the audience got most energized when they started shouting, "Drill, baby, drill" and those expensive ads by T. Boone Pickens promoting natural gas and wind power. The answer that's being given is, "Yeah, we need those too."
Well natural gas prices are only 7.27 at the moment. If there's any talk about starting to do the style of converting to natural gas powered vehicles, they'll start with municipal vehicles and others, what you're going to have is that this policy which has been enunciated over and over by the Republicans this week which was, "We're sending hundreds of billions of dollars abroad. We've got the resources here. Let's use what we have."
Governor Palin is in the position to talk about this knowledgably, as she did in her speech, we have it here. Why are we sending this much money abroad to countries that don't like us very much?
So I do believe that the surprise will be that we will be developing more shale, gas and there will be major drilling projects offshore. I have no doubt about it. It's not a matter of if, but when. And if McCain should pull off an upset and wins the election, it will be sooner rather than later. As a matter of fact if McCain wins the election these stocks are going to gap up, because everybody is going to say who has the knowledge, the smarts, the cash to drill in a politically secure region of the world?
In terms of identified supplies of barrels of oil seismically, US offshore now ranks just about at the top of politically secure regions of the world and yet they're being held back by the whole attitude which is that it would be bad for our beaches to have the drilling.
So I think this is a hugely good time to be buying the companies - the only thing about these companies is you're talking about blue chip and red chip companies. Companies that have big balance sheets and good earnings. Even if oil falls to 80 bucks, they're still going to make money. The integrateds will finally get an improvement in the crack spread and so they'll have the cash flow to do these projects and it's right here at home. So yeah, I think the energy companies have to be one sector that you’ve got to feel comfortable about.
