Wall Street Transcript Interview with Leo Mariani, Analyst at RBC Capital Markets: U.S. Oil and Gas E&P Shale Developments for 2013

Wall Street Transcript

67 WALL STREET, New York - June 28, 2013 - The Wall Street Transcript has just published its Oil & Gas Review 2013 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends

Companies include: Apache Corp. (APA), EOG Resources, Inc. (EOG), Occidental Petroleum Corporati (OXY), Noble Energy, Inc. (NBL), Rex Energy Corporation (REXX), Gulfport Energy Corp. (GPOR), Carrizo Oil & Gas Inc. (CRZO), Continental Resources Inc. (CLR), Range Resources Corp. (RRC), McMoRan Exploration Co. (MMR), Freeport-McMoRan Copper & Gold (FCX), Plains Exploration & Productio (PXP), Rosetta Resources, Inc. (ROSE), Pioneer Natural Resources Co. (PXD), Approach Resources, Inc. (AREX) and many more.

In the following excerpt from the Oil & Gas Review 2013 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Your view is that M&A in the E&P space is coming back. Can you tell us about some of the recent deals that have closed? What is your outlook for M&A in 2013?

Mr. Mariani: In terms of M&A in the space in 2012, it is a little bit of lighter year that we've seen in years past. Recently announced but yet to close was the takeout of McMoRan Exploration (MMR). This definitely was somewhat of an inside deal. The company that bought it out was Freeport-McMoRan (FCX). It's the same management for these companies, and they used to be part of one another back in 1994, and it was spun out into separate companies and basically it's reconsolidated. So I don't really think that particular deal portends for a tremendous amount of M&A.

And the other deal that was recently announced was Plains Exploration (PXP), which was also bought out by Freeport-McMoRan. The guys who ran Plains were pretty good buddies with Jim Moffett and Richard Adkerson, the two guys that run Freeport-McMoRan. So this deal is - well, I think it was classified as sort of a club deal, and doesn't necessarily portend for a tremendous amount of M&A going forward. But my expectation is we could see a few more deals happen in 2013, and it gets especially true if commodity prices are sort of flattish during the year.

I think particularly in the small-to-mid-cap range, some of these companies may be looking at relatively large capex budgets over the next 10 years and say if commodity price is going to be flat, they're better off selling the company at a premium as opposed to kind of sitting around and trying to raise money on their own end, which can be dilutive to shareholders.

TWST: With the information you have and your analyses, how do you expect oil prices to trend in the first part of the year 2013?

Mr. Mariani: I'm certainly not a...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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