Venezuela is unlikely to see any meaningful boost to crude output for years even if U.S. oil majors do invest the billions of dollars in the country that President Donald Trump promised just hours fol... ...

Group 1 - ConocoPhillips' Australian subsidiary has discovered unexpected gas while drilling the Charlemont-1 exploration well in the Otway Basin, offshore Victoria [1][10] - The Charlemont-1 well encountered significant gas presence in the Waarre C reservoir formation, approximately 160 meters above the target formation, Waarre A [2][10] - Drilling operations were paused on December 25 due to high-pressure conditions at 2,552 meters, indicating potential safety and operational risks [3][10] Group 2 - The Essington-1 well, drilled earlier in the same permit, confirmed the presence of hydrocarbons in both Waarre A and C reservoir formations, marking the first natural gas discovery in the Otway Basin since 2021 [4][10] - ConocoPhillips holds a 51% interest in the VIC/P79 permit, with partners 3D Energi and the Korea National Oil Company holding 20% and 29% stakes, respectively [5]

Core Insights - The comparison between Enterprise Products Partners LP (EPD) and ConocoPhillips (COP) is relevant due to the expected soft oil prices in the coming year, highlighting the need for investors to consider midstream stability versus upstream exposure [2][3] Group 1: Oil Price Outlook - The U.S. Energy Information Administration (EIA) projects the average spot price of West Texas Intermediate crude to be $65.32 per barrel this year, down from $76.60 last year, and expects it to decline further to $51.42 per barrel by 2026 due to rising global oil inventories [5] - Advanced drilling techniques have significantly reduced operational costs in oil and gas, leading to low breakeven costs, which may allow exploration and production activities to remain profitable despite lower oil prices [6] Group 2: Company Fundamentals - EPD has outperformed COP over the past year, with a price increase of 9.4% compared to COP's decline of 2.4%, indicating a potential preference for EPD among investors [3] - Nearly 90% of EPD's contracts are inflation-protected, ensuring stable cash flows, and the company anticipates additional cash flows from key capital projects coming online next year [7][11][13] - COP's strong presence in the Lower 48, including the Permian, Eagle Ford, and Bakken regions, along with its acquisition of Marathon Oil, supports its low breakeven costs, allowing it to navigate a low oil price environment effectively [8][9] Group 3: Investment Considerations - Given the anticipated soft oil pricing environment, risk-averse investors may prefer EPD for its stable business model, while those willing to take on more risk might consider holding COP [14] - EPD is currently trading at a premium with a trailing 12-month EV/EBITDA of 10.45x compared to the industry average of 4.98x, indicating a higher valuation assigned by investors [15]

Oil is closing 2025 as one of the negative-performing assets. Despite starting the year with a rally, oil's movement soon became typical bear-market dynamics. Consistent price decline interrupted by volatile, sharp double-digit rallies.Still, even in that environment, oil majors saw significant performance discrepancies. ConocoPhillips (NYSE:COP) lost 8.3% year-to-date, while Exxon Mobil (NYSE:XOM) squeezed a double-digit gain of over 11%.Going into 2026, oil has become one of the most consensus-bearish ass ...

Group 1 - UBS maintains a Buy rating on ConocoPhillips (COP) and raises its price target from $117 to $120 [1] - Mizuho reaffirms its Outperform rating on ConocoPhillips and increases its price objective to $121 from $120 [3] - The energy sector is expected to strengthen in 2026, with improved prospects for oilfield services and natural gas exploration [2] Group 2 - Mizuho notes that despite negative sentiment towards US oil and gas companies due to oversupply concerns, exploration and production are undervalued based on long-term fundamentals [4] - Mizuho suggests reallocating risk towards oil exploration and production companies with a selective bias for gas stocks [4]

Core Viewpoint - The energy sector has underperformed compared to the broader market, with average energy stocks in the S&P 500 up about 4% year-to-date, while the broader market index rose nearly 18% due to lower oil prices [1][2] Group 1: ConocoPhillips - ConocoPhillips is a leading oil and gas producer with a diversified portfolio and low operating costs [4] - The company requires an average oil price in the mid-$40s to sustain capital spending and about $10 more per barrel to fund its dividend, currently generating substantial surplus free cash flow with crude oil priced in the low $60s [4][5] - Expected completion of large-scale liquefied natural gas projects and the Willow oil project in Alaska could add an incremental $6 billion in annual free cash flow by 2029, assuming a $60 oil price [5] - ConocoPhillips produced $6.1 billion in free cash flow through the first nine months of the year and recently increased its dividend by 8%, aiming for dividend growth within the top 10% of S&P 500 companies [7] Group 2: Oneok - Oneok is one of the largest energy midstream companies in the U.S., generating stable cash flow supported by long-term contracts and government-regulated rate structures [8] - The company has expanded its midstream platform through acquisitions, including Magellan Midstream Partners and Medallion Midstream, totaling $10.2 billion [10] - Oneok expects to capture hundreds of millions in cost savings and synergies from these acquisitions and has approved several organic expansion projects, which should enhance its dividend growth by 3% to 4% annually [11] Group 3: NextEra Energy - NextEra Energy is a leading electric utility and energy infrastructure development company, with a Florida-based utility generating steadily rising rate-regulated earnings [12] - The company plans to invest upwards of $100 billion by 2032 to support growing energy demand in Florida, alongside investments in electricity transmission lines and clean power projects [14] - Expected compound annual earnings-per-share growth of over 8% over the next decade positions NextEra Energy to increase its dividend by 10% next year and at a 6% compound annual growth rate through at least 2028 [15] Group 4: Overall Investment Potential - ConocoPhillips, Oneok, and NextEra Energy are identified as top energy stocks with visible growth ahead, expected to continue increasing their high-yielding dividends [16]

Core Viewpoint - Jefferies has reiterated a 'Buy' rating on ConocoPhillips (COP) with a price target of $120, suggesting a nearly 30% upside potential from the current share price, indicating strong future prospects for the company [2] Group 1: Analyst Ratings and Price Targets - Jefferies maintains a 'Buy' rating on ConocoPhillips and sets a price target of $120, reflecting confidence in the company's long-term resource potential [2] - UBS has also raised its price target for ConocoPhillips from $117 to $120 while keeping a 'Buy' rating, suggesting a positive outlook for the energy sector leading into 2026 [4] Group 2: Project Developments - The Willow project in Alaska is highlighted as a significant growth opportunity, with an estimated peak production of 180,000 barrels of oil per day and a projected cost of $7 – $7.5 billion, with first oil expected in 2029 [3]

Core Viewpoint - ConocoPhillips (COP) is an independent exploration and production company with a diversified asset base across 14 countries, showing stable performance with a 1.8% share gain over the past six months compared to a 5.1% growth in the broader Oils-Energy sector [1] Positive Factors Boosting COP's Performance - High-quality assets in the U.S. support low-cost production, with significant untapped drilling locations in major shale basins, providing 15 years of low-cost drilling inventory [3] - The company has a rigorous annual asset review process, recently selling Anadarko Basin assets for $1.3 billion and achieving $3 billion in asset sales towards a $5 billion target by 2026, enhancing its portfolio quality [4] - The acquisition of Marathon Oil in 2024 expands COP's low-cost resource base in the U.S. Lower 48, with an estimated $500 million in annual synergies expected to exceed $1 billion by the end of 2025 [5][8] Risk Factors to Consider - Commodity price sensitivity poses a risk, with oil prices expected to remain under pressure, potentially limiting earnings growth and stock value [9] - The Willow project in Alaska has seen capital costs rise to $8.5-$9 billion from initial estimates of $7-$7.5 billion due to inflation and localized cost escalations, which could impact project economics [10]

Core Viewpoint - A growing global oil glut is leading to declining oil prices and negatively impacting energy stocks, suggesting investors reconsider their positions in this sector as they approach the new year [1]. Oil Supply and Prices - There are currently 1.4 billion barrels of oil in transit or storage, which is 24% higher than the average for this time of year from 2016 to 2024 [2]. - West Texas Intermediate oil is trading at approximately $57 per barrel, down $15 from the start of the year, while Brent oil is priced around $60 per barrel, also down $15 from early 2025 [3]. - The average price of gasoline in the U.S. has fallen below $2.90, marking the lowest level since the COVID-19 pandemic [4]. Impact on Energy Stocks - Energy stocks are experiencing downward pressure due to falling oil prices, with Chevron's share price down 9% since early September [5]. - ExxonMobil has shown slightly better resilience but is also trending lower, while ConocoPhillips has decreased about 9% since early September [7]. - Occidental Petroleum is down 20% for the year, and Marathon Petroleum has dropped 16% over the past month [8]. Future Outlook - Analysts predict that the global oil oversupply will continue into 2026, with the International Energy Agency forecasting a supply-demand mismatch of over 3.8 million barrels per day [11]. - The U.S. Energy Information Administration anticipates that rising inventories will exert downward pressure on oil prices, projecting Brent oil to fall to $55 in the first quarter of 2026 [12]. Industry Adjustments - Major oil companies are responding to the downturn by reducing their workforces, with ExxonMobil announcing 2,000 job cuts as part of a restructuring plan [15]. - Other companies, including ConocoPhillips and Chevron, are also implementing layoffs [15]. Economic Implications - Lower oil prices can stimulate economic growth globally, except in countries heavily reliant on oil exports, which negatively affects oil companies and their shareholders [17]. - The relationship between oil prices and supply is complex, as lower prices can lead to reduced production and investment, eventually decreasing supply while increasing demand [18].

Core Viewpoint - ConocoPhillips is positioned as a more attractive investment compared to Occidental Petroleum due to its clear growth strategy and strong financial position. Group 1: Occidental Petroleum - Occidental Petroleum is a leading international energy company with operations in the U.S., Middle East, and North Africa, but it has accumulated significant debt from acquisitions [3]. - The company plans to reduce its principal debt balance below $15 billion by selling OxyChem to Berkshire Hathaway for $9.7 billion, which will allow it to focus on shareholder value creation [4]. - Despite the sale, Occidental lacks a firm action plan for growth, relying on free cash flow and asset sales to manage its debt [6]. Group 2: ConocoPhillips - ConocoPhillips has a robust growth strategy, having invested heavily in acquisitions funded primarily through equity, resulting in a strong balance sheet [6]. - The company is investing $3.4 billion in three liquefied natural gas (LNG) projects and $8.5 billion to $9 billion in the Willow oil project in Alaska, which is expected to generate an additional $6 billion in annual free cash flow by 2029 [8]. - This increasing cash flow will support dividend growth within the top 25% of S&P 500 companies and enable share repurchases, positioning ConocoPhillips for strong total returns [9].