For Immediate Release
Chicago, IL – March 5, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Exxon Mobil Corporation (XOM), Enerplus Corporation (ERF), Range Resources Corporation (RRC), NGL Energy Partners LP (NGL) and Bridge Capital Holdings (BBNK).
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Here are highlights from Monday’s Analyst Blog:
Exxon Closes $2.6B Celtic Deal
ExxonMobil Canada − the Canadian unit of Exxon Mobil Corporation (XOM) has finally completed the acquisition of Calgary-based oil and gas driller Celtic Exploration Ltd. in a deal valued at C$2.59 billion ($2.63 billion).
ExxonMobil’s proposal to purchase Celtic in Oct 2012 received consent from the Canadian government towards the end of Feb 2013. The deal was valued at C$3.1 billion after taking into consideration Celtic's convertible debentures, and bank debt and working capital obligations.
The acquisition is a move towards expanding ExxonMobil’s footprint in the unconventional energy plays in North America. The closure of the deal entails delisting of Celtic shares from the Toronto Stock Exchange.
Celtic’s output and proved reserves are heavily weighted towards natural gas. Despite the collapse in natural gas prices, ExxonMobil expects unconventional gas to play a dominant role in future supplies, owing to the rapid decline in conventional production.
With the XTO Energy Inc. acquisition, ExxonMobil gained access to significant unconventional resources with a major handle on North America's newest energy discoveries. The Celtic deal is the biggest opportunity since then and will help ExxonMobil to expand its presence in the world’s largest energy market.
The company’s efforts to build an unconventional resource portfolio both in North America and overseas are aimed at increasing production through increased exposure to large energy resources with a long reserve life and low field declines. Since the XTO acquisition, the company possesses more than 1.4 million unconventional acres in the U.S. and Canada.
In a separate deal, ExxonMobil’s subsidiary Imperial Oil Ltd. purchased a 50% working interest in Celtic following the completion of the transaction. The technical expertise and financial strength of Imperial, ExxonMobil and XTO will expedite the development of energy in the acquired unconventional, liquids rich acreage.
ExxonMobil holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, there are other stocks in the oil and gas sector – Enerplus Corporation (ERF), Range Resources Corporation (RRC) and NGL Energy Partners LP (NGL) – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.
Bridge Capital Upgraded to Outperform
On Mar 2, Zacks Investment Research upgraded Bridge Capital Holdings (BBNK) to Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Bridge Capital has been witnessing rising earnings estimates owing to strong fourth quarter 2012 results. Moreover, this regional bank delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 19.9%.
Bridge Capital reported fourth-quarter results on Jan 24. Earnings per share came in at 23 cents, surpassing the year-ago earnings by 43.8%. Moreover, the earnings were in line with the Zacks Consensus Estimate. Results were primarily aided by improved net interest income as well as non-interest income, partially offset by a rise in expenses and provision for credit losses
Net interest income jumped 22.0% year over year to $15.8 million. Further, non-interest income surged 42.3% to $1.0 million. Yet, total non-interest expenses hiked 9.9% year over year to $12.2 million.
Credit quality was mixed at Bridge Capital. Provision for credit losses climbed significantly from $0.6 million in the prior-year quarter to $1.5 million. However, as of Dec 31, 2012, nonperforming assets were 0.75% of total assets, down 63 basis points from the prior-year quarter. Moreover, nonperforming loans were 1.10% of total gross loans, down 45 bps from the prior-year quarter.
The Zacks Consensus Estimate for 2013 increased 8.2% to $1.05 per share as 1 out of 2 estimates was revised higher over the last 30 days. For 2014, over the same time frame, the Zacks Consensus Estimate rose by 7.3% to $1.18 per share.
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