EUROPEAN_INTEGRATED_OILS_2013_OUTLOOK:MUCH_TO_PROVE-2012-12-03.pdf
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1、Deutsche Bank Markets Research Europe United Kingdom Oil Downgrading Shell to HOLD Total (BUY, 44 TP): Still too early to buy for the operating cash uplift envisaged from 2015. But trading at the low end of their ten year relative range and with a secure 6% plus dividend yield offering absolute supp
2、ort, we see the shares as presenting an attractive risk/reward balance ahead of the broadest and potentially most exciting 2013 exploration programme amongst the European majors. Shell (HOLD, 2475p TP) After a disappointing 2012 we look to stronger performance in 2013 not least as full cash is deliv
3、ered from the megaprojects. The investment case is, however, well rehearsed and with specific upside drivers unclear we revert to a less aggressive Hold stance. See p3 for further discussion of sector valuation and risks 3 December 2012 Integrated Oils European Integrated Oils Page 2 Deutsche Bank A
4、G/London Table Of Contents Sector Investment Thesis . 3 Executive Summary: 10 key questions for 2013 4 1) Will US oil supply outpace Chinese demand? 10 2) Should we be constructive on Atlantic Basin gas prices? . 19 3) Refining: Will the 2012 uplift continue in 2013? 27 4) Volumes: How wrong will we
5、 be in 2013? . 32 5) Cash Flow: Reaching equilibrium in non-productive? 37 6) Exploration: Where to go in the majors? 41 7) Can sector performance turn in 2013? . 46 8) Will 2013 prove to be BPs epiphany year? . 50 9) Total: Will 2013 exploration excite? . 61 10) Will Eni succumb to mean reversion i
6、n 2013? . 66 BG (HOLD, 1350p TP) . 77 BP (BUY, 500p TP) 80 Galp (HOLD, 16.00 TP) . 83 Eni (BUY, 21.00 TP) 86 OMV (HOLD, 30.00 TP) 89 Repsol (HOLD, 16.00 TP) 92 Shell (HOLD, 2475p TP) 95 Statoil (HOLD, NOK160 TP) 98 Total (BUY, 44.00 TP) . 101 Appendix A DB Commodity Price Deck 104 3 December 2012 In
7、tegrated Oils European Integrated Oils Deutsche Bank AG/London Page 3 Sector Investment Thesis Outlook In our recent sector review (“Profiting from Big Oils Renaissance”, Sept-11) we argued that far from being structurally broken the integrated model remained relevant, that the sector had been under
8、going a period of strategic and operational transition, and that sentiment toward a materially undervalued group should begin to improve driven by expected growth in volumes, cash and exploration activity. In this context 2012 has proven disappointing with confidence in operational delivery once aga
9、in undermined by sharply reduced volume expectations. With this in mind, 2013-14 should prove a key staging-post for our thesis as the sector promises to show the first signs of operational rejuvenation. First, after a decade of stagnant volumes we expect the delivery of modest production growth. Se
10、eing is believing; but even allowing for normal slippage we expect the group to return a sentiment boosting uptick in volumes. Second, leveraging margin accretive barrel growth we forecast a 13% expansion in OCF by 2014 at constant oil prices driving an improvement in FCF and lowering the cash break
11、even of the group. Third, with the Majors placing a greater emphasis on frontier exploration we look to drilling activity to improve perceptions of the sustainability. However with market concerns deeply entrenched a sector-wide re-rating will likely require a sustained period of improved performanc
12、e. Recognising that each company stands at a different point in its evolution, we prefer to play this thesis on a bottom-up basis through preferred companies as opposed to a top-down sector call. Valuation We use several earnings and cash flow valuation techniques to value the oils. These include P/
13、E relative, dividend yield, CROCI, discounted cash flow models, Free Cash Flow Yield and a cash-flow asset valuation based Sum-of-the-Parts. The absolute valuation of the sector presently appears attractive: (1) the group trades at an aggregate c35% discount to SOTP with asset disposals made across
14、the past year suggesting that our asset-valuation is conservative relative to the asset-market. (2) the group trades at just 0.78x 2013e Net Capital Invested, c15% below the multiple consistent with our forecast for 2013 CROCI/COC and at odds with our assessment of potential returns on reinvestment.
15、 On a market relative basis we observe that the 12 month forward consensus PE of the sector stands at c0.75x the market as compared to a trailing 7-year average of c0.8x. Furthermore, with the sector balance sheet robust and limited absolute downside we regard the sector as defensive in the event of
16、 any market pull- back. Aggregating our company target prices implies a 2013E sector target PE multiple of 9.0x and a sector target EV/NCI of 1.0x. Risks As ever, the key risk to our estimates is the outlook for commodity prices and crude oil in particular. Specifically, we note exposure to evolving
17、 expectations for economic growth in the key consuming countries and to expectation around the behaviour of OPEC particularly in light of geopolitical tensions in the MENA region. Thus our forecasts are consequently vulnerable to moves in the price of crude about our $113/bbl 2013 oil price estimate
18、. As a sector whose functional currency is the US dollar, a sharp fall in that currency would be counter to our current expectations and could significantly undermine asset values and the local currency value of dividend payments. Considering company-specific factors we note that equity value will b
19、e sensitive to perceived changes in economic/fiscal conditions in key countries of operation, to the physical risks inherent in an asset intensive business, and to the risks borne of the environmental challenges directly associated with producing crude oil and gas. 3 December 2012 Integrated Oils Eu
20、ropean Integrated Oils Page 4 Deutsche Bank AG/London Executive Summary: 10 key questions for 2013 In this note we examine the critical issues facing the European Integrated Oil sector in 2013 by posing and seeking to answer what we consider to be the ten key questions faced by investors. The ten qu
21、estions are divided into four broad topics (macro drivers, operational momentum Macro Drivers Q1) Will US oil supply outpace Chinese demand? From 2000-2008 the gradual erosion of OPEC spare capacity through sustained non- OECD demand growth created the conditions for a bull market in oil. We worry t
22、hat we are now in the early stages of a period of sustained growth in North American supply, potentially of sufficient magnitude to largely satisfy anaemic global demand growth, which will gradually place pressure on the OPEC core (Saudi, Kuwait, UAE) to accommodate both this growth and capacity exp
23、ansion within their membership (Iraq, Angola). In this context we see 2013 as a year of transition. The US tight oil plays remain in their infancy, so whilst long-term growth potential appears significant (upwards of 500kb/d p.a.), if a structural bear case on crude is to gain traction we need to se
24、e confirmation that this kind of growth can be delivered for a second year. But with the rig-count flattening, WTI sub-$90/bbl and a lack of visibility over well performance this is an area where we do not expect to be able to reach a confident conclusion imminently. With the call on OPEC (ex-Iraq/L
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