Our take on the major oil and gas space remains little changed as a result of second-quarter results from the majors. We continue to expect rising energy prices over the long haul, and we highly encourage new readers to take a look at our comprehensive outlook for oil and gas prices. Please access it at the following link: ‘Our Comprehensive Outlook for Crude Oil and Natural Gas Prices.’ We have a very unique thesis on the group, and for holders of exploration and production entities, we expect a long-term tailwind in investors’ favor.
Generally,it’s difficult not to like many entities in the large oil and gas space. ConocoPhillips continues to execute nicely, while Exxon remains a consistently strong economic-value generator (ROCE). BP is absorbed by ongoing Gulf spill litigation, while the dividend of Dividend Growth portfolio holding Chevron remains as strong as ever thanks to a best-in-class balance sheet, in our view here. We would expect an upward bias to fair value estimates on the basis of ongoing geopolitical uncertainly across the globe.
BP (BP)
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Chevron (CVX)
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ConocoPhillips (COP)
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Exxon (XOM)
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Occidental (OXY)
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Royal Dutch Shell (RDS)
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