Post below a single recommendation for a long term E&P stock.

I work in O&G, previously for a major midstream company, and now for a global major, both in a BD/commercial role in the midstream space. I don't own a single E&P stock, but I can't help to think that this thing is very, very close to bottoming out, especially for the larger cap companies (I expect the smaller E&P's to continue to either go BK or be acquired).

So, post a single recommendation for a 7-10+ year hold.

XOM, may be the only one left in 10 years.

EOG. The amount of tier 1 Permian acreage they have cannot be understated. That alone will keep them busy for a decade. Plus they have a lot of good acreage across all of the major basins. There is no substitute for the best rock.

CVX

COP, bhp, hilcorp when they go public, really any of the majors who have a global presence. I would not rely on the us (especially onshore) for 10yr o&g investment

Hilcorp would be great if it were public but I sure as **** wouldn't invest in BHP or COP. Both have disastrous management and COP has been liquidating the company for damn near a decade.

XOM, CVX, or RDS are safe, though XOM is an obvious political target. CVX might benefit from being able to hid just behind them.

PeekingDuck said:

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XOM, CVX, or RDS are safe, though XOM is an obvious political target. CVX might benefit from being able to hid just behind them.

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Isn't CVX HQ'd in California? If so, they're more exposed to the irrational than XOM.

I like COP as a pure play so long as they have conventional assets to balance out L48 unconventionals.

I also like any of the majors for long term holds.

jayelbee said:

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I like RDS. High yield and low risk of cutting dividend. Leadership understands the future of O&G and is positioning the company for success in the face of peak oil demand in the next 20 years.

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There's something funny we have to do with our taxes because of RDS (foreign income or something), may be worth factoring into a decision whether to buy stock in a domestic or foreign company

CXO for a safer bet, FANG for a longshot ( might want to go 50/50 and buy VNOM with it). I like VNOM but it valuation is still too rich for me.

NRD09 said:

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jayelbee said:

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I like RDS. High yield and low risk of cutting dividend. Leadership understands the future of O&G and is positioning the company for success in the face of peak oil demand in the next 20 years.

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There's something funny we have to do with our taxes because of RDS (foreign income or something), may be worth factoring into a decision whether to buy stock in a domestic or foreign company

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Probable you have foreign dividend withholding taxes on RDS. They take them at the source (i.e. when paid) and you get a foreign tax credit when you file your return. If you need the cash dividend (versus being happy with a future tax credit), then you may have to consider this reduction in actual cash received as a negative.

I'd pick EOG. Best access to data + high quality rock + low likelihood of making a dumb acquisition.

That said an Econ prof in grad school once advised don't buy a house in the same city you work in - the economic outcomes are too correlated. Same could be said for job and stocks.

So since you work in the industry - I'd be very cautious in sizing the investment.

Whittington01 said:

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I'd pick EOG. Best access to data + high quality rock + low likelihood of making a dumb acquisition.

That said an Econ prof in grad school once advised don't buy a house in the same city you work in - the economic outcomes are too correlated. Same could be said for job and stocks.

So since you work in the industry - I'd be very cautious in sizing the investment.

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Used to work with a guy who worked for Enron. His wife worked at Enron as well. Lost it all, and had to start over from scratch. He ended up retiring in his late 60s, but he was eating bologna sandwiches everyday trying to save every penny.

I don't buy stock in a company that I work for, and I would not work for the same employer as my wife.