On the other hand, Occidental Petroleum is expected to make a share repurchase in 2014, and for that it will sell some assets in the Middle East, Asia, and North Africa. The total estimated assets in these regions are worth $25.7 billion and total production capacities in these regions are around 270 million barrels of oil equivalent per day.
Why sell? These regions provide challenging conditions, and the investment return was substantial. Together, they contribute around 34% to the total production of Occidental. By selling these assets, the company expects to be able to repurchase shares of around $20 billion. This will only benefit the stock price of the company.
Leveraging on production growth
In February, CNOOC Limited (ADR) (NYSE:CEO) completed the acquisition of Nexen Inc. (USA) (NYSE:NXY) for $15.1 billion. With this, it is estimated that CNOOC Limited (ADR) (NYSE:CEO) will have total production growth of around 12% this year, higher than any of its competitors. Also, the company will get the advantage of its project pipeline, as it will have opened ten new oil fields in China by the end of this year.
Oil reserve years are a metric that show the average duration of oil reserves, and CNOOC Limited (ADR) (NYSE:CEO)’s oil reserve years improved from 9.6 years last year to 10.2 in this year. Crude oil is expected to remain around $110 per barrel in this year, which will be beneficial for the company. Looking at this, the company can expect that its net income will increase to $11.18 billion in 2014, up from $10.3 billion in 2012.
CNOOC Limited (ADR) (NYSE:CEO) made four new discoveries on the Chinese shore in the first quarter. In the same period, domestic oil production was 745,000 barrels per day, up 8% year-over-year. The company reported 8% year-over-year growth, despite adverse weather conditions in Bohai, and expects quarterly growth of its production of 5.4% in Bohai.
Moreover, CNOOC Limited (ADR) (NYSE:CEO) started initial operation in 6-12 Weizhou oil fields in the South China Sea, and in the next year, production growth will be around 24.4% in this region. The company has 10 producing wells in the Weizhou oil fields. With the increase in domestic production, the company’s total sales are expected to surge from $40.3 billion last year to approximately $49.5 billion next fiscal year.
Conclusion
Initial production from the Sahara desert and recoverable gas from Mozambique will give a lift to Anadarko Petroleum Corporation (NYSE:APC)’s sales.
Occidental’s share repurchase plan will enhance investor confidence, while its chemical and midstream business give a boost to the company’s revenue.
New projects and domestic production will enhance CNOOC’s oil production. With the increase in production, the company will grow in coming years.
These three stocks are a Buy for the long-term.
The article As Demand Rises, So Will the Stock Prices of These Three Oil and Gas Companies originally appeared on Fool.com.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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