Wall Street Transcript Interview with Longdley Zephirin, CEO, Director of Research and Senior Analyst at The Zephirin Group, Inc.?: Cautious Overall Outlook for E&Ps as Rig Day Rates Stop Rising

Wall Street Transcript

67 WALL STREET, New York - July 5, 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: Hercules Offshore, Inc. (HERO), BP plc (BP), Petroleo Brasileiro (PBR), Transocean Ltd. (RIG), Ensco International Inc. (ESV), Diamond Offshore Drilling Inc. (DO) 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: What are you hearing about capex from the E&P group?

Mr. Zephirin: It's at all-time highs. I look at capex from approximately 22 global oil and gas and E&P companies that have positively impacted my sector. The Street is saying capex will probably go up by 10% to 15% this year. In my opinion, capex will be slightly down this year because costs have escalated from the downside to the upside, and if prices should go up a majority of that uptick will be because of a labor shortage, which could likely have an impact. I think companies will start looking to find ways to save costs.

Looking at BP (BP), for example: this company has spent approximately $20 billion-plus a year on capex spending. They recently announced that they're going to start buying back shares, and I think capital is going to be deducted from their capex budget to buy back shares. A lot of the capex spending has been shifted to international markets: offshore Brazil, Southeast Asia and offshore Africa. I've seen too much capex spending going over to Brazil. Brazil is a good market and everyone's been asking us about that market, but it has been very slow to pick up.

Petrobras (PBR) has announced a plan to spend $220 billion-plus for the next five to seven years, and I think this year the big surprise is that Petrobras will reevaluate those spending plans because those budgets were put in place three years or four years ago. Capex for the first half will be strong, but I don't expect it to...

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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