EOG - Embedded Expectations Analysis - 2019 04 26
EOG Resources, Inc. (EOG:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Assets, with a 1.4x Uniform P/B. At these levels, the market has muted expectations for the firm, and management is concerned about organic oil production growth, drilling operations in South Texas, and their well exploration program.Specifically, management may lack confidence in their ability to sustain organic oil production growth, lease land at favorable rates, and meet growth forecasts. Moreover, they may be exaggerating the quality of their inventory, and concerned about the sustainability of growth in active wells in the Delaware Basin, and improvements in drilling days said wells. Also, they may be concerned about the complexity and quality of well drilling in South Texas, and the potential of their well exploration and drilling capital program. In addition, management may be exaggerating the consistency of their Eagle Ford oil segment, improvements in well spacing, and the consistency and productivity of their operating teams.
EOG Resources, together with its subsidiaries, explores for, develops, produces and markets crude oil, natural gas liquids and natural gas primarily in main producing basins in the United States, The Republic of Trinidad and Tobago, The People's Republic of China, Canada and, from time to time, select other international areas.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.