Michael D. Bodino, Brian M. Corales and Michael A. Glick have resurfaced—they’re now running energy research for Houston-based investment banker SMH Capital out of the Metairie, La., office. Bodino can be reached at firstname.lastname@example.org and 504-799-3565; Corales at email@example.com, 504-799-3570; and Glick at firstname.lastname@example.org, 504-799-3569. SMH Capital is a business of Sanders Morris Harris.
Bodino is director of research and senior E&P analyst, covering E&P with Corales. Mark Reichman is covering MLPs, and Bill Conroy is covering oilfield services.
The triumvirate left Jackson, Miss.-based Coker & Palmer Investment Securities in late September, resulting in that firm’s suspension of its energy-securities research. Bodino and several colleagues, including Corales, left Sterne Agee in August 2005 to join Coker Palmer and launch the research practice. Bodino was previously with Southcoast Capital, now Capital One Southcoast Inc., from 1999-2003, Sterne Agee from 2003-05. Prior to joining Southcoast, he was with San Jacinto Securities Inc.
“Although most market pundits may not consider this a propitious time to launch coverage on the E&P sector, we vehemently disagree,” Bodino reports. “Given the steep market correction, oil and gas company equities now reflect a combination of lower oil and gas prices, lower growth rates and a higher implied equity return. Thus, the risk/reward pendulum for investing in the group has oscillated.
“While current 2009 economic outlooks do not support a strong fundamental oil and gas demand picture, reduced 2009 capital budgets should impact natural gas production in 2010, and, as the U.S. economy recovers, rising consumption could ameliorate another secular industry upturn that could materially buoy energy equities. Until then, there should be ample seasonal trading opportunities. Below are our initial ratings and price targets for 26 E&P companies.”
For SMH Capital’s institutional clients, he has launched coverage of ATP Oil & Gas (target: $13; rating: Neutral); Bill Barrett Corp. ($35; Accumulate); Brigham Exploration Co. ($10; Buy); Cabot Oil & Gas Corp. ($38; Buy); Carrizo Oil & Gas ($56; Buy); Chesapeake Energy Corp. ($40; Accumulate); CNX Gas Corp. ($40; Buy); Comstock Resources Inc. ($55; Buy); Continental Resources Inc. ($35; Buy); Delta Petroleum Corp. ($8; Neutral); Encore Acquisition Corp. ($35; Accumulate); Energy XXI Ltd. ($4; Accumulate); GMX Resources Inc. ($42; Neutral); Goodrich Petroleum Corp. ($44; Buy); Harvest Natural Resources ($17; Accumulate); Helix Energy Solutions Group ($20; Accumulate); Parallel Petroleum Co. ($9; Neutral); Penn Virginia Corp. ($41; Accumulate); Petrohawk Energy Corp. ($30; Buy); PetroQuest Energy Inc. ($14; Accumulate); Plains Exploration & Production Co. ($46; Buy); Quicksilver Resources Inc. ($18; Accumulate); Range Resources Corp. ($50; Buy); Southwestern Energy Inc. ($44; Buy); Ultra Petroleum Corp. ($77; Accumulate); and XTO Energy Inc. ($60; Buy).
The group covered 20 E&Ps at Coker Palmer. New to their coverage list are Brigham, Cabot, Comstock, Continental, Encore and Penn Virginia at SMH Capital. They have not resumed coverage of Cano Petroleum, Foothills Resources and Storm Cat Energy Corp. The lattermost is in Chapter 11 bankruptcy protection.
–Nissa Darbonne, Executive Editor, Oil and Gas Investor, A&D Watch, OilandGasInvestor.com Today, OilandGasInvestor.com, A-Dcenter.com; email@example.com
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