When the Arab oil embargo hit in 1973, long gas station lines formed around the country, and frustrated motorists waited for hours in line to fill up. In a few short months, prices at the pump doubled and the decision was made to halt all U.S. oil exports as a result of the crisis. That decision was finally, at least on a partial basis reversed, as domestic energy production has jumped dramatically in the past four years.
As we and many other outlets reported, the U.S. Department of Commerce granted permission to two domestic companies to transport and export condensate, which is lighter than crude oil, but more volatile and therefore more combustible, which makes it more difficult to transport and process. A new research report from Oppenheimer views the decision by the Commerce Department as a first step in the right direction and hopes that it may be a start to lifting the 40-year oil export ban, which is long overdue in the firm’s opinion.
The report also highlighted five top stocks that are big producers in the Texas Eagle Ford Shale, where there are significant condensate yields in much of the play and easy access to export markets. In addition to the two already approved, the rest of these stocks could be in line for approval as well.
It should be noted that master limited partnership Enterprise Products Partners L.P. (NYSE: EPD) was one of the companies the Commerce Department approved, and they will be involved in the transportation of the condensate.
ConocoPhillips (NYSE: COP) is a large integrated name that draws a solid look at Oppenheimer for possible approval. The company has spent the past five years divesting assets, and although it is cash rich, the company has somewhat dampened earnings and growth expectations. Continued strong pricing could bode well for the company. Its big production ability in the Eagle Ford could bode well for the future. Investors are paid a very nice 3.2% dividend. The Thomson/First Call consensus price target for the stock is $85.64. Shares closed Wednesday at $85.62.