Occidental Petroleum Corporation (OXY), Kodiak Oil & Gas Corp (USA) (KOG): A Proposed Oil & Gas Portfolio

Petrobras Argentina SA ADR (NYSE:PZE) is 67% owned by Petrobras Brazil and the state-owned Brazilian oil giant has already expressed its interest into selling a significant share of its Argentinean subsidiary to concentrate the company’s efforts in Brazil’s off-shore plays. Most importantly, the energy policy in Argentina is now, after over a decade, changing for the best. Very recently, the government has liberated exports of the oil coming from shale reserves and eased taxes for companies investing in the country’s rich shale reserves (believed to be one of the world’s biggest).

Operationally, the company is also performing extremely well, with revenues and EBITDA increasing by 6% and 31% year over year (yoy), respectively, due to solid performance from the E&P segment (+27% yoy) and higher margins. Trading at 4.6 times P/E and paying a 3.83% cash dividend yield, I believe Petrobras Argentina should be 20% of this portfolio.

The Foolish portfolio

This Foolish portfolio is composed of 55% Occidental Petroleum Corporation (NYSE:OXY), 25% Kodiak Oil & Gas Corp (USA) (NYSE:KOG) and 20% Petrobras Argentina SA ADR (NYSE:PZE), and pays a 2.33% cash dividend yield with a great growth profile thanks to Kodiak Oil & Gas Corp (USA) (NYSE:KOG) and Petrobras Argentina SA ADR (NYSE:PZE). I assigned 55% of the portfolio to Occidental Petroleum Corporation (NYSE:OXY) because I consider it a great and growing low-risk, high-quality asset.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article A Proposed Oil & Gas Portfolio originally appeared on Fool.com is written by Federico Zaldua.

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