March 11th, 2021 | 09:10 CET
BP, Saturn Oil + Gas, Royal Dutch Shell - JP Morgan: Oil price rises to USD 190 due to supply deficit - these are the future price rockets!
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"[...] The Oxbow Asset now delivers a substantial free cash flow stream to internally fund our impactful drilling and workover programs. [...]" John Jeffrey, CEO, Saturn Oil + Gas Inc.
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
BP PLC - more than just a green logo
BP's share price has risen by more than 50% since its low at the end of October and is currently trading at around 314 pence. At that time, the oil price was just below USD 40. The share has thus underperformed the commodity since the fall. The reasons are certainly the extremely high loss that the British oil Company had to make in 2020 and the missed annual figures' expectations presented on February 2. Nevertheless, a decent dividend was paid.
In part, however, it is also the prospects that do not entirely convince investors because not all investors are as bullish about the price development of black gold as JP Morgan, who see a price potential of up to 440 pence for the shares - a nice upside of almost 40%!
In addition, it is the strategic turn that the Group is taking. By 2030, BP wants to develop into an integrated energy Company that focuses on providing customers solutions. In doing so, BP will invest more in renewables and develop existing hydrocarbon reservoirs. All oil and gas processing sites are under review. Most recently, BP reported that it would divest several oil fields in Kazakhstan. Even if the stock is not a "pure play" in the oil market going forward, we view the transformation positively. After all, the focus is on sustainability, which is becoming increasingly important for investors and profitability. With the BP share, you will be able to sleep soundly.
SATURN OIL & GAS INC - share is far too cheap
There are several reasons why investors should take a closer look at the stock of Canadian oil and gas producer Saturn Oil & Gas. First of all, the Company, which focuses on the acquisition and development of undervalued and low-risk oil and gas areas in Canada, is very favorably valued. At the current price of CAD 0.14, the market capitalization is just CAD 33 million.
The current operational focus is the province of Saskatchewan. The declared goal is to build a portfolio with strong cash flows. Acquisitions also fit perfectly into the picture, which CEO John Jeffrey again explicitly emphasized a few months ago. Such a deal could, of course, trigger a share price firework. But the low-cost position also makes the stock extremely exciting and gives it significant leverage for when the oil price rises.
Another critical point is sustainability, which the Company addressed at an early stage and is successively increasing its efforts and measures and personnel. Investors can still find a favorable entry opportunity in the share at the moment.
ROYAL DUTCH SHELL PLC - currently not a favorite of analysts
Royal Dutch Shell has also taken up the cause of sustainability. Under the motto "Powering Progress," the Group wants to work on a significant reduction of CO2 emissions and achieve further sustainable goals and increase the value of its shares.
According to market estimates, the Group will generate around 85% of its expected 2021 sales of EUR 211 billion from the refining and distributing of crude oil and natural gas. Its portfolio includes 15 refineries worldwide and a network of 45,000 service stations.
On average, analysts expect a net income of EUR 9 billion for the current year, giving the stock a P/E ratio of 16. The dividend yield is currently calculated at 3.3%. On average, the share is currently seen as having a low upside potential of only 8%.
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