Global Oil & Gas_130813_Barclays

Equity Research13 August 2013

Global Oil & Gas Weekly Rising demand for China Oil Services We believe Chinas oilfield services market is at the early stages of an unprecedented growth cycle. Our colleagues in Asia recently initiated on a number of Chinese Oil service companies in China Oilfield Services: Initiation, 6 Aug 2013 in which they forecast an earnings CAGR of 30% in the 2012-2015 period. Driven by rising demand for oil services and equipment both domestically and internationally, we expect the market to double to US$2bn by 2015. Anton Oil (OW, PT HKD6.60) is our top pick given its strong positioning in the domestic Chinese market and increasing ability to handle integrated projects. Elsewhere in the world, we see the biggest beneficiaries of this trend as Hunting (OW, PT 1100p) in Europe and the Big Four in the US namely Baker Hughes (OW, PT $69), Halliburton (OW, PT$71), Schlumberger (OW, PT $123) and Weatherford (OW, PT $24).

Drilling activity to drive oilfield services demand: Drilling activity is typically an indicator of oilfield services activity. The number of wells drilled by Petrochina and Sinopec has grown at a CAGR of 9% over the past 10 years. We believe the demand for oilfield services will intensify further with the increase in unconventional oil/gas development, driven by the need for well stimulation and high-end drilling services.

Hunting and the Big Four the western way to play Chinese drilling: In Europe, Hunting opened a manufacturing facility in China in 2010 and has already commenced the manufacture of stimulation tools serving the domestic market. In the US, the Big Four have all adopted strategies to position themselves for the Chinese shale opportunity. Given their technological strength and rich experience, we believe these companies will all play an increasingly bigger role in Chinas oilfield services market.

Chinas high-end oilfield services market to grow 4-5x by 2020

Source: Spears & Associates, Barclays Research

0

1

2

3

4

5

6

2005

2006

2007

2008

2009

2010

2011

2012

E

2013

E

2014

E

2015

E

2016

E

2017

E

2018

E

2019

E

2020

E

US$ bnDrilling services Completion equipment & services Stimulation services

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies coveredin its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

Investors should consider this report as only a single factor in making their investment decision.

This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA.

PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 48.

SECTOR UPDATE

European Integrated Oil Rahim Karim, CFA +44 (0)20 3134 1853 [email protected] Barclays, London

Lydia Rainforth, CFA +44 (0)20 3134 6669 [email protected] Barclays, London

Joshua Stone +44 (0)20 3134 6694 [email protected] Barclays, London

Americas Integrated OilPaul Y. Cheng, CFA 1.212.526.1884 [email protected] BCI, New York

Asia ex-Japan Oil & GasClement Chen +852 2903 2498 [email protected] Barclays Bank, Hong Kong

Somshankar Sinha +91 22 6719 6031 [email protected] BSIPL, Mumbai

European Oil Services & DrillingMick Pickup +44 (0)20 3134 6695 [email protected] Barclays, London

U.S. Oil Services & DrillingJames C. West 1.212.526.8796 [email protected] BCI, New York

European Oil & Gas: E&PAlessandro Pozzi +44 (0)20 7773 4745 [email protected] Barclays, London

CEEMEA Oil & Gas Matthew Thomas +44 (0)20 7773 3640 [email protected] Barclays, London

Barclays | Global Oil & Gas Weekly

13 August 2013 2

Barclays Research Industries included in this report

Industry Industry view Author(s)

Americas Integrated Oil Positive Paul Cheng CFA

Asia ex-Japan Oil Positive Somshankar Sinha, Clement Chen

CEEMEA Oil Neutral Matt Thomas

European Integrated Oil Neutral Lydia Rainforth CFA, Rahim Karim CFA

European Exploration & Production Positive Alessandro Pozzi

European Oil Services & Drilling Positive Mick Pickup

European Refining & Marketing Negative Lydia Rainforth CFA

Russian Oil Services & Drilling Positive Mick Pickup

US Independent Refiners Positive Paul Cheng, CFA


13 August 2013 3

CONTENTS

CRUDE OIL AND NATURAL GAS PRICES .......................................

REFINING AND MARKETING MARGINS ...........................................

TANKER AND EXCHANGE RATES .................................................

INVENTORIES ....................................

CRACK SPREADS .............................

SHARE PRICE PERFORMANCE .....Valuations ..............................................................

REFINERS ...........................................Valuations ..............................................................

Share price performance ....................................

SERVICES ...........................................Valuations ..............................................................


E&PS ....................................................Valuations ..............................................................


GLOBAL EMERGING MARKET OILS .....................................................Valuations ..............................................................

Share price performance ....................................The data source for all charts and tables is Company data, Barclays Research, unless otherwise stated. Share prices are as of 09 August 2013 at market close, unless otherwise stated.

Corporate Calendar

2013August

13 Enquest 1H 2013 Earnings ReleaseGrupa Lotos Q2 2013 Earnings ReleaseMOL Q2 2013 Earnings ReleaseOMV Q2 2013 Earnings Release

14 Subsea 7 Q2 2013 Earnings Release

20 Cairn 1H 2013 Earnings Release

22 Premier Oil 1H 2013 Earnings Release

23 Afren 1H 2013 Earnings Release

27 Aker Solutions Q2 2013 Earnings Release

28 Seadrill Q2 2013 Earnings Release

29 Hellenic Petroleum Q2 2013 Earnings ReleaseSalamander 1H 2013 Earnings ReleaseSoco 1H 2013 Earnings Release

Source: Bloomberg, Barclays Research


13 August 2013 4

Crude oil and natural gas prices

Henry Hub Rockies Russia UK-NBP Zee NE Asia LNG

Date Brent WTI ANS Kern River Dubai OPEC WTI-Maya Brent-Urals $/mBtu $/mBtu $/kcf p/therm p/therm $/mBtu

05-Aug-13 107.6 105.1 109.4 110.4 104.4 105.3 7.3 - 3.45 3.31 - 65.69 65.42 16.15

29-Jul-13 108.7 105.5 110.8 111.1 104.8 105.3 6.1 - 3.60 3.54 - 65.61 65.73 16.25

22-Jul-13 108.7 105.9 110.7 111.9 104.4 105.6 5.8 - 3.69 3.54 - 64.81 65.64 16.10

15-Jul-13 108.9 107.0 112.7 113.2 104.3 105.5 5.9 - 3.66 3.44 - 65.38 66.12 15.60

Aug-13 107.6 105.1 109.4 110.4 104.4 105.3 7.3 - 3.59 3.44 - 65.22 65.60 15.85

Jul-13 107.8 104.7 111.4 110.7 103.5 104.4 5.3 (0.1) 3.81 3.58 11.58 60.57 64.81 14.54

Jun-13 103.1 95.8 104.0 104.3 100.3 100.9 (0.5) 0.3 4.02 3.86 11.67 66.30 66.61 14.43

May-13 103.2 94.9 104.5 104.3 100.5 100.8 (3.5) 0.5 4.17 3.99 11.91 69.72 69.57 15.11

3Q 2013 107.8 104.8 111.1 110.6 103.6 104.6 5.7 (0.1) 3.81 3.44 11.23 65.22 65.60 15.95

2Q 2013 103.0 94.1 104.3 104.7 100.8 101.0 (3.8) 0.9 4.00 3.81 11.72 65.53 67.00 14.69

1Q 2013 112.8 94.3 110.4 113.9 108.0 109.4 (8.4) 2.1 3.50 3.50 12.30 74.27 71.44 17.95

4Q 2012 110.5 88.2 106.4 109.5 107.2 107.3 (5.0) 1.6 3.41 3.41 12.82 65.39 63.97 14.30

3Q 2012 109.9 92.1 108.7 109.4 106.1 106.3 (4.9) 1.2 2.88 2.75 12.93 56.86 57.27 13.59

2Q 2012 109.5 93.9 110.2 109.1 106.9 107.4 (3.7) 2.4 2.29 2.15 13.06 57.17 57.59 17.35

2013 107.9 96.2 108.1 109.6 104.3 105.1 (3.9) 1.2 3.73 3.62 11.90 69.23 68.70 16.23

2012 112.1 94.3 110.9 111.9 109.1 109.6 (5.5) 1.7 2.75 2.68 12.87 59.56 59.32 15.14

2011 111.0 95.1 109.6 112.4 106.1 107.6 (3.6) 1.7 3.94 3.79 11.80 56.84 57.56 13.77

2010 79.7 79.5 78.9 82.8 78.1 77.5 9.2 1.4 4.37 3.94 9.77 42.52 43.06 11.13

2009 62.2 62.1 61.1 64.6 62.1 61.1 5.8 0.6 3.94 3.17 8.21 30.81 31.20 8.91

2008 97.2 99.1 97.9 91.5 93.2 93.5 15.5 3.3 8.82 6.30 10.98 58.11 58.99 11.42

2007 72.7 72.3 71.7 62.3 68.4 68.8 12.5 3.2 6.94 4.10 7.92 29.85 30.38 6.96

2006 65.8 66.2 63.6 55.1 61.6 61.0 15.1 4.9 6.75 5.27 7.19 40.20 43.33 6.46

2005 55.0 56.6 53.7 45.0 49.4 50.7 11.4 4.5 8.91 7.15 5.68 38.30 40.94 5.60

2004 38.4 41.2 38.9 33.0 33.8 36.0 14.3 3.7 5.89 5.10 4.40 24.45 23.92 4.86

Source: Bloomberg Source: Bloomberg, Natural Gas Week, European Gas Markets Source: WGI

Crude - $/blNatural gas


13 August 2013 5

Refining and marketing margins

Date NW Europe US Gulf US W. Coast Singapore Med Eur 6 France Germany Italy UK PADD1 PADD2 PADD3 PADD4 PADD5

05-Aug-13 1.37 3.84 7.99 7.41 0.49 18.55 11.43 20.46 24.62 9.62 14.73 11.03 10.44 35.31 9.10

29-Jul-13 1.06 6.15 10.71 8.10 0.21 18.05 9.18 18.65 24.62 9.14 11.26 7.27 7.48 31.08 4.88

22-Jul-13 0.86 5.50 10.68 8.50 0.17 18.03 12.01 22.03 23.27 6.97 11.27 8.20 8.41 29.79 4.69

15-Jul-13 2.09 6.21 11.41 8.84 1.43 13.14 6.74 17.51 19.04 1.53 6.36 3.47 3.55 27.41 (0.58)

Aug-13 1.37 3.84 7.99 7.41 0.49 18.55 11.43 20.46 24.62 9.62 14.73 11.03 10.44 35.31 9.10

Jul-13 1.38 5.75 10.52 8.71 0.62 15.27 8.88 18.33 20.93 5.11 9.03 6.10 5.86 31.75 1.95

Jun-13 2.03 9.37 15.50 9.10 1.81 19.00 14.24 20.45 23.59 11.94 13.12 24.54 10.73 41.94 1.73

May-13 1.15 10.79 13.55 7.27 1.09 16.12 11.28 20.67 19.28 8.77 11.04 22.43 9.10 36.68 3.70

3Q 2013 1.37 5.43 10.10 8.49 0.60 16.91 10.16 19.39 22.78 7.36 11.88 8.57 8.15 33.53 5.52

2Q 2013 1.28 11.27 13.63 7.35 1.60 18.52 14.14 20.76 22.46 11.98 12.87 20.81 10.33 37.22 4.38

1Q 2013 1.04 18.89 14.09 8.89 2.33 16.83 14.98 15.67 23.80 6.88 11.45 7.72 5.25 16.11 (4.27)

4Q 2012 1.57 19.37 12.34 7.24 2.18 18.55 12.21 20.36 25.68 13.65 18.51 13.37 10.54 37.63 9.46

3Q 2012 4.73 21.77 13.32 10.16 5.12 13.89 6.89 19.00 19.24 5.07 10.22 13.08 5.65 28.02 4.55

2Q 2012 3.30 17.51 10.13 8.19 5.12 19.85 14.00 18.98 28.30 15.08 15.98 17.28 13.56 39.46 15.95

2013 1.20 13.27 13.15 8.19 1.71 17.30 13.51 18.31 22.81 8.72 11.77 12.54 7.50 27.40 0.63

2012 2.61 18.66 11.31 8.45 3.59 16.69 11.16 18.58 23.46 9.56 12.52 11.46 7.72 28.38 6.87

2011 0.22 15.02 6.91 8.49 1.33 17.74 14.18 14.27 27.47 9.01 11.65 11.46 8.57 17.26 7.08

2010 1.42 1.29 8.37 4.66 2.46 13.81 10.34 11.36 22.55 6.20 9.07 9.42 7.62 14.49 6.14

2009 1.53 1.68 10.34 3.15 2.95 8.03 7.68 9.22 11.91 3.32 8.26 7.55 6.85 9.02 1.41

2008 3.94 1.42 9.51 8.43 6.54 12.54 11.71 9.76 19.83 8.85 13.30 10.86 11.52 13.87 7.58

2007 2.63 5.72 17.56 6.65 6.08 9.32 7.87 8.10 14.90 6.39 10.56 11.35 8.99 13.02 2.39

2006 1.26 3.53 16.94 5.00 6.05 7.60 5.61 5.80 13.61 5.36 12.52 8.64 10.27 11.49 2.60

2005 2.90 4.62 14.16 6.39 6.40 6.55 4.32 3.01 10.87 4.17 9.08 7.16 8.16 8.73 2.64

2004 2.79 1.75 11.59 6.24 6.42 6.14 2.78 1.50 7.95 0.95 10.02 7.94 6.82 9.18 5.04

Source: Bloomberg, Barclays Research Source: European Energy Commission, Barclays Research Source: Oil & Gas Journal, Bloomberg, Barclays Research

Refining margins - $/bl US gasoline marketing margins - $/blEuropean marketing margins - $/bl


13 August 2013 6

Tanker and exchange rates

Date Suezmax Aframax Clean Dirty EUR/USD GBP/USD GBP/EUR USD/NOK USD/CAD USD/AUS

05-Aug-13 18,977 11,936 14,299 12,062 1.33 1.55 1.16 5.91 1.04 1.11

29-Jul-13 21,406 14,172 15,518 12,250 1.33 1.52 1.15 5.93 1.03 1.11

22-Jul-13 12,803 18,397 13,080 13,704 1.32 1.54 1.16 5.91 1.03 1.08

15-Jul-13 10,463 9,725 12,713 14,525 1.31 1.52 1.16 6.01 1.04 1.09

Aug-13 13,891 13,232 13,428 13,449 1.33 1.54 1.16 5.92 1.04 1.11

Jul-13 6,128 10,967 10,076 12,585 1.31 1.52 1.16 6.03 1.04 1.09

Jun-13 12,200 9,855 11,303 11,902 1.32 1.55 1.17 5.89 1.03 1.06

May-13 18,060 14,950 14,252 14,734 1.30 1.53 1.18 5.82 1.02 1.01

3Q 2013 15,735 12,834 13,555 12,453 1.33 1.54 1.16 5.92 1.04 1.11

2Q 2013 12,134 11,765 11,833 12,983 1.31 1.53 1.18 5.84 1.02 1.01

1Q 2013 15,176 14,118 14,293 21,518 1.32 1.55 1.18 5.63 1.00 0.96

4Q 2012 11,577 13,954 15,610 15,348 1.30 1.61 1.24 5.68 0.99 0.96

3Q 2012 10,176 13,638 11,069 9,467 1.25 1.58 1.26 5.91 1.00 0.96

2Q 2012 20,986 16,017 18,545 10,934 1.28 1.58 1.23 5.89 1.01 0.99

2013 14,045 12,921 13,155 16,351 1.32 1.54 1.17 5.79 1.02 1.03

2012 17,738 14,881 14,769 13,162 1.29 1.59 1.23 5.82 1.00 0.97

2011 19,239 13,528 10,535 12,644 1.39 1.60 1.15 5.61 0.99 0.97

2010 31,259 19,745 14,956 11,292 1.33 1.55 1.17 6.05 1.03 1.09

2009 28,205 15,969 12,738 8,869 1.39 1.57 1.12 6.29 1.14 1.28

2008 78,573 50,923 37,239 25,508 1.47 1.85 1.26 5.65 1.07 1.20

2007 44,781 35,865 30,533 26,018 1.37 2.00 1.46 5.86 1.07 1.19

2006 52,931 39,338 30,758 27,227 1.26 1.84 1.47 6.41 1.13 1.33

2005 53,579 41,650 37,639 31,145 1.24 1.82 1.46 6.44 1.21 1.31

2004 74,236 49,227 39,054 29,010 1.24 1.83 1.47 6.74 1.30 1.36

Source: Clarksons Shipping Weekly Source: Datastream

Tanker rates - $/ship/day Exchange rates


13 August 2013 7

Inventories

US crude oil inventories, m bl US gasoline inventories, m bl US distillate inventories, m bl

240

280

320

360

400

440

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

7 Year Range 2012 2013Week

170

190

210

230

250

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


80

100

120

140

160

180

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


US total inventories, m bl US Refinery Utilisation, % Natural Gas Storage, bcf

800

900

1,000

1,100

1,200

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


65

75

85

95

105

Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12

Refinery utilisation Rolling 12 month average

1,000

2,000

3,000

4,000

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


Non-commercial Paper Positions, m bl Futures Curve - Brent, $/bl Baker Hughes US Rotary Rig Count

050

100150200250300350400

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

2012 2013Week

707580859095

100105110115

Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18

Brent WTI

Source: Energy Information Administration (EIA), Commitments of Traders report - US CFTC, American Petroleum Institute (API), Bloomberg, Datastream, Barclays Research

0

400

800

1,200

1,600

2,000

Jun-03 Jun-05 Jun-07 Jun-09 Jun-11 Jun-13

Gas Rigs Oil Rigs


13 August 2013 8

Crack spreads

European Gasoline Brent Crack Spread, $/bl European Diesel Brent Crack Spread, $/bl European Naptha Brent Crack Spread, $/bl

-10

0

10

20

30

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 5210 Year Range 2012 2013Week

-10

0

10

20

30

40

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


-30

-20

-10

0

10

20

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


European Kerosene Brent Crack Spread, $/bl European LSFO Brent Crack Spread, $/bl European HSFO Brent Crack Spread, $/bl

-10

0

10

20

30

40

50

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


-50

-40

-30

-20

-10

0

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52


-60

-50

-40

-30

-20

-10

0

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 5210 Year Range 2012 2013Week

Brent-Urals Crude Spread, $/bl Brent-WTI Spread, $/bl Brent Spot Price $/bl

-5

-3

-1

1

3

5

7

9

Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13

-10

0

10

20

30


30

60

90

120

150


Source: Energy Information Administration (EIA), Commitments of Traders report - US CFTC, American Petroleum Institute (API), Bloomberg, Datastream, Barclays Research


13 August 2013 9

Share price performance

European Integrateds vs European Market European Services vs European Market European Refiners vs European Market

70

75

80

85

90

95

100

105

Aug-12 Nov-12 Feb-13 May-13 Aug-13

65707580859095

100105110


90

95

100

105

110

115

120

125


European E&P vs European Market European Integrateds vs European Services European Integrateds vs European Refiners

70

75

80

85

90

95

100

105


859095

100105110115120125130


60

70

80

90

100

110


European Integrateds vs European E&P European Services vs European Refiners European Services vs European E&P

85

90

95

100

105

110


50

60

70

80

90

100

110


80

85

90

95

100

105

110


Source: Datastream, Barclays Research. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage. Source: Datastream, Barclays Research. Relative calculations use the FTSE 300 Integrated Sector (Euro) for the European companies and the S&P500 Integrated Sector (US) for the US companies.


13 August 2013 10

Integrateds


13 August 2013 11

Valuations IntegratedsChange in

Price Target Up/(Down) cons in

Company Rating 09-Aug Price side, % 13F 14F 15F 13F 14F 15F 13F 14F 15F 13F 14F 15F 13F 14F 15F EPS EPS last mnth

MajorsBP U/W 443 475 7 5.3 4.9 4.8 8.7 8.1 8.1 (1.2) 2.9 2.9 5.3 5.6 5.9 10.3 9.9 9.9 50.8 50.8 -6

Chevron* E/W 123 145 18 6.6 6.5 6.1 10.5 10.5 9.7 0.9 0.6 1.4 3.2 3.5 3.8 16.4 13.8 13.8 11.7 12.1 -2

ExxonMobil* E/W 90.7 102.0 12 8.8 8.7 8.4 12.5 12.4 12.0 2.4 3.2 3.4 2.7 3.0 3.3 18.3 15.6 15.6 7.3 7.7 -5

Royal Dutch Shell A E/W 2091 2400 15 5.2 5.1 5.0 8.5 8.7 8.8 5.1 4.8 4.6 5.7 5.9 6.2 12.3 10.8 10.8 3.8 3.9 -8

Royal Dutch Shell B E/W 2182 2400 10 5.4 5.3 5.2 8.9 9.1 9.2 4.9 4.6 4.4 5.3 5.6 5.8 12.3 10.8 10.8 3.8 4.0 -5

Total U/W 40.3 42.5 6 4.6 4.4 4.3 8.1 8.2 8.4 (0.4) 1.6 0.2 6.0 6.1 6.2 12.6 10.9 10.9 4.9 5.0 -1

Arithmetic average 11 6.0 5.8 5.6 9.5 9.5 9.4 1.9 3.0 2.8 4.7 5.0 5.2 13.7 12.0 12.0 -5

Integrated - EuropeBG Group O/W 1211 1350 11 9.3 8.6 7.1 15.6 13.2 10.7 (6.8) (5.3) 1.2 1.5 1.7 1.9 8.8 10.2 10.2 77.9 80.1 -3

Eni O/W 17.1 20.0 17 4.9 4.2 3.9 11.9 8.9 8.4 0.3 7.0 7.5 6.4 6.6 6.8 6.5 9.5 9.5 1.4 1.6 -12

Galp O/W 12.6 16.0 27 16.3 15.7 13.7 31.4 27.6 20.7 (2.0) (2.5) (2.1) 2.3 2.7 3.3 5.6 7.1 7.1 0.4 0.4 -7

MOL U/W 16450 17000 3 5.7 5.4 4.9 9.8 9.8 9.3 12.9 8.3 10.2 3.1 3.1 3.2 3.2 3.5 3.5 1679 1888 -5

OMV U/W 34.4 31.0 (10) 4.3 4.4 4.5 8.4 9.0 9.0 7.2 1.7 2.3 3.6 3.6 3.6 10.5 8.2 8.2 4.1 4.4 -3

Repsol O/W 18.2 19.0 5 5.8 5.3 4.9 12.1 10.6 9.6 2.9 6.3 7.3 5.5 5.5 5.5 7.2 9.2 9.2 1.5 1.7 0

Statoil E/W 127.0 150.0 18 4.1 4.2 4.3 9.0 9.2 9.3 (0.7) (1.6) (1.8) 5.5 5.7 5.9 12.0 9.4 9.4 14.1 15.0 -2


Integrated - US*ConocoPhillips O/W 66.8 80.0 20 6.4 6.2 6.0 11.2 11.0 10.4 (1.3) (1.2) (0.3) 4.0 4.1 4.2 11.7 11.2 11.2 6.0 5.7 4

Hess O/W 74.9 86.0 15 6.2 5.7 5.0 11.5 11.9 10.3 (6.7) 5.0 6.1 0.9 1.3 1.3 8.3 8.0 8.0 6.5 6.5 4

Murphy E/W 70.9 70.0 (1) 5.6 5.0 4.8 11.6 11.0 10.7 (8) (2.9) 0.1 1.8 1.8 1.8 11.0 9.2 9.2 6.1 5.7 3

Arithmetic average 12 6.0 5.6 5.3 11.6 12.2 11.4 (3.8) 0.2 1.7 2.2 2.3 2.3 10.0 8.9 8.9 2

The price targets for the European companies are based on a sum-of-the-parts based DCF methodology. For the US they are based on return on market capitalisation under mid-cycle assumptions.

P/E, x Dividend yield, % RoACE, %FCF yield, %EV:EBIDA, xBarclays

2013Cons 2013

Source: Company data, Datastream, Barclays Research. * Chevron, Exxon Mobil and the US Integrateds are covered by Barclays Integrated oil research team, headed by Paul Cheng, in New York. The forecasts for these companies are based on assumptions which are aligned but may sometimes differ from those used for the European companies.

26643Rectangle

26643Rectangle


13 August 2013 12

Valuations Integrateds

EV:EBIDA, x P/E, x Dividend yield, %

0

5

10

15

20

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

EV/EBIDA 2013 Average

05

101520253035

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

P/E 2013 Average

01234567

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

Dividend Yield, % 2013 Average

Free cash flow yield, % RoACE, % Gearing - Net Debt to Equity, %

-5

0

5

10

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

FCF Yield, % 2013 Average

0

5

10

15

20

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

RoACE, % 2013 Average

-100

102030405060

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

2012 2013

Datastream consensus e relative to Barclays EPS, % Dollar EPS change y/y, % EV/b, $

-10

-5

0

5

10

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

Cons vs BC EPS (%) 2013 Average

-0.40-0.30-0.20-0.100.000.100.20

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

EPS Growth 2013 Average

0

5

10

15

20

B

P

C

V

X

X

O

M

R

D

S

T

O

T

B

G

E

N

I

G

a

l

p

M

O

L

O

M

V

R

E

P

S

T

L

C

O

P

H

E

S

M

U

R

EV: 2P reserves 2013 Average

Source: Datastream, Barclays Research estimates


13 August 2013 13

Share price performance Integrateds

Change in USD share price over last week, % Change in USD share price over last month, % Change in USD share price over last three months, %

-2 -1 0 1 2 3

BPCVX

XOMMOLCOPREPTOT

OMVENI

RDSAGALP

STLBG

-5 0 5 10 15

XOMBP

MOLRDSA

CVXSTL

COPOMV

BGTOTREP

GALPENI

-15 -10 -5 0 5 10

STLRDSA

ENIBP

OMVCVX

XOMMOL

BGGALP

REPTOTCOP

Change in USD share price over last year, % European Integrateds vs Brent European Integrateds vs US Integrateds

-20 -10 0 10 20 30 40 50

STLRDSA

BGMOL

BPXOM

ENICVXTOTCOP

GALPOMV

REP

80

85

90

95

100

105

110

115


85

90

95

100

105


BP vs European Integrateds Chevron vs US Integrateds ConocoPhillips vs US Integrateds

400

420

440

460

480

500

90

95

100

105

110


BP vs Sector BP, p

50

70

90

110

130

90

95

100

105

110

115


CVX vs Sector CVX, $

40

45

50

55

60

65

70

90

95

100

105

110

115


COP vs Sector COP, $

Source: Datastream, Barclays Research. Relative calculations use the FTSE 300 Integrated Sector (Euro) for the European companies and the S&P500 Integrated Sector (US) for the US companies.


13 August 2013 14


Exxon Mobil vs US Integrateds Royal Dutch Shell A vs Royal Dutch Shell B Royal Dutch Shell A vs European Integrateds

60

70

80

90

100

90

94

98

102

106

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13XOM vs Sector XOM, $

96

97

98

99

100

101

102

103


2000

2250

2500

2750

3000

85

88

91

94

97

100

103

Aug-12 Nov-12 Feb-13 May-13 Aug-13RDSA vs Sector RDSA, p

Total vs European Integrateds BG Group vs European Integrateds Eni vs European Integrateds

30

32

34

36

38

40

42

44

85

90

95

100

105

110

115

Aug-12 Nov-12 Feb-13 May-13 Aug-13TOT vs Sector TOT, E

800

900

1000

1100

1200

1300

1400

40

50

60

70

80

90

100

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13BG vs Sector BG, p

10

12

14

16

18

20

90

95

100

105

110

115

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13ENI vs Sector ENI, E

Galp vs European Integrateds Repsol vs European Integrateds Statoil vs European Integrateds

10

11

11

12

12

13

13

14

80859095

100105110115120125

Aug-12 Nov-12 Feb-13 May-13 Aug-13GALP vs Sector GALP, E

10111213141516171819

60

80

100

120

140

160

Aug-12 Nov-12 Feb-13 May-13 Aug-13REP vs Sector REP, E

110

120

130

140

150

160

80

85

90

95

100

105

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13STL vs Sector STL, NOK

Source: Datastream, Barclays Research. Relative calculations use the FTSE 300 Integrated Sector (Euro) for the European companies and the S&P500 Integrated Sector (US) for the US companies.


13 August 2013 15


BP vs Total BP vs Shell Total vs Eni

80

85

90

95

100

105

110

115


80

90

100

110

120

130


80

85

90

95

100

105

110

115


Total vs Shell BG vs Statoil Eni vs Repsol

70

80

90

100

110

120

130


60

70

80

90

100

110

120


60

70

80

90

100

110


OMV vs Repsol BG vs Eni Eni vs Statoil

60

70

80

90

100

110

120


50

60

70

80

90

100

110


70

80

90

100

110

120

130


Source: Datastream, Barclays Research


13 August 2013 16

Share price performance Integrateds Local Price

09-Aug -1d -5d -10d -30d MTD QTD YTD 1Q 13 4Q 12 3Q 12 2Q 12 1Q 12 4Q 11

Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6Hang Seng 21808 0.7 -1.7 -0.7 4.8 -0.4 4.8 -3.8 -1.7 8.8 7.3 -5.3 11.5 -8.1

Integrated - MajorsBP 443 0.2 -1.0 -4.9 -0.3 -0.1 -0.3 -0.3 1.1 -2.5 6.5 -10.5 3.3 44.4Chevron 123 -0.5 -2.0 -4.0 3.5 -2.7 3.5 13.3 9.9 -7.8 10.5 -1.6 0.8 57.7ExxonMobil 90.7 -1.2 -1.3 -4.3 0.4 -3.2 0.4 4.8 4.1 -5.7 6.9 -1.3 2.3 49.7Royal Dutch Shell A 24.3 0.8 0.8 -4.9 1.7 -4.5 1.7 -5.2 -5.5 -1.9 2.5 -3.4 -4.3 48.5Royal Dutch Shell B 2182 0.8 1.3 -4.5 2.6 -3.7 2.6 -4.2 -6.2 -1.5 1.7 -0.7 -7.9 62.4Total 40.3 -0.4 -0.2 1.1 10.2 0.9 10.2 4.5 -6.7 1.5 10.2 -11.5 -0.7 14.7Arithmetic Average 0.0 -0.4 -3.6 3.0 -2.2 3.0 2.1 -0.6 -3.0 6.4 -4.8 -1.1 46.2

Integrated - EuropeBG Group 1211 1.3 3.2 2.8 10.9 4.5 10.9 14.3 4.2 -20.3 -1.0 -11.9 8.2 41.3Eni 17.1 -0.7 -0.5 2.8 11.2 3.5 11.2 -5.6 -6.9 8.1 2.8 -9.1 12.7 13.4Galp 12.6 0.5 2.0 5.7 14.0 5.7 14.0 8.7 1.2 -6.4 27.9 -22.8 11.2 -2.7OMV 34.4 1.7 -0.9 4.7 1.7 3.8 1.7 27.2 18.1 1.6 11.5 -11.4 16.6 1.5Repsol 18.2 0.4 0.0 3.6 15.1 1.6 15.1 23.1 0.7 7.9 21.0 -33.1 -18.7 49.6Statoil 127 1.3 1.7 -0.2 5.9 0.6 5.9 -13.0 -3.1 -3.9 8.6 -12.2 5.4 36.8Arithmetic Average 0.8 0.9 3.2 9.8 3.3 9.8 9.1 2.4 -2.2 11.8 -16.7 5.9 23.3

Integrated - USConocoPhillips 66.8 -0.4 -0.6 1.7 10.5 3.0 10.5 15.2 3.6 1.0 2.3 -3.6 4.3 49.1Hess 74.9 0.7 -0.6 2.3 12.6 0.6 12.6 41.4 35.2 -1.8 23.6 -26.3 3.8 13.7Husky Energy 29.0 -0.3 -2.9 -4.2 5.8 -2.4 5.8 -4.8 -2.8 8.1 7.6 -1.7 5.3 1.6Imperial Oil 41.7 -0.1 -2.5 -3.6 6.4 -5.5 6.4 -5.6 -4.8 -7.7 10.1 -7.9 1.7 22.3Murphy 70.9 1.0 -0.5 4.7 16.4 4.7 16.4 19.1 7.0 8.3 6.8 -10.6 1.0 13.9Suncor 33.2 0.9 -1.4 1.8 9.7 2.1 9.7 -1.9 -8.8 -1.3 13.8 -11.4 13.0 -2.0Arithmetic Average 0.2 -2.4 -0.3 8.8 -0.4 8.8 10.9 5.6 1.3 11.4 -11.5 5.3 22.1

Source: Datastream, Barclays Research. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for

companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted

average for our coverage.

26643Rectangle

26643Rectangle


13 August 2013 17

Refiners


13 August 2013 18

Valuations RefinersChange in



Refiners - EuropeEssar Energy O/W 130 170 30 18.6 14.2 8.9 9.8 6.1 5.7 (23) (4.4) 10.1 0.0 1.6 1.7 6.0 6.8 6.8 13.31 12.87 -

Hellenic E/W 7.98 9.00 13 8.5 7.3 6.7 14.3 9.7 8.9 8.1 12.0 13.0 5.6 5.6 5.6 5.9 7.8 7.8 0.56 0.57 -16

Grupa Lotos E/W 37.6 34.0 (9) 9.6 8.6 8.8 15.3 11.1 12.3 3.6 5.7 4.8 0.0 0.0 0.0 3.3 3.6 3.6 2.45 3.25 -8

Motor Oil O/W 8.09 9.50 17 8.3 6.6 6.4 12.0 8.0 8.5 13.9 18.1 17.3 6.2 6.2 6.2 7.9 10.7 10.7 0.67 0.72 -19

Neste Oil U/W 13.16 12.0 (9) 7.4 6.7 5.8 12.4 11.8 10.4 8.5 9.7 11.6 3.1 3.4 3.4 6.9 7.2 7.2 1.06 1.19 5

PKN Orlen U/W 45.4 40.0 (12) 6.4 5.5 4.5 15.9 12.7 9.9 7.1 9.4 12.3 0.0 0.0 0.0 5.3 6.8 6.8 2.85 3.47 -14

Saras U/W 0.94 1.00 7 5.5 4.1 3.6 (93) 38 39.0 7.5 13.4 13.3 0.0 0.0 0.0 9.6 2.9 2.9 -0.01 0.01 -180

Tupras U/W 41.8 42.8 2 8.1 7.7 7.2 7.2 7.0 8.3 (26) 3.2 7.8 9.0 9.7 10.1 18.9 16.9 14.0 5.78 4.27 -11

Arithmetic average 5 9.0 7.6 6.5 (0.7) 13.0 12.9 (0.0) 8.4 11.3 3.0 3.3 3.4 8.0 7.8 7.5 -39

Refiners - US*Alon USA Energy U/W 12.2 23.0 88 4.1 4.5 2.7 6.0 9.4 4.6 22.8 13.5 25.3 3.1 2.5 3.8 14.4 18.8 18.8 2.05 1.18 -39

Delek US Holdings O/W 29.4 52.0 77 5.1 6.3 3.8 10.0 11.1 5.8 7.1 5.9 14.0 2.6 2.6 3.2 24.0 26.1 26.1 2.95 3.14 -27

Tesoro O/W 53.1 120 126 7.8 6.8 5.4 11.4 10.1 6.8 (14) 7.2 8.9 1.7 2.4 3.2 14.2 16.5 16.5 4.65 4.86 -14

Valero O/W 37.1 72.0 94 5.7 4.9 4.4 8.8 7.4 6.8 9.4 8.0 9.3 2.3 2.7 3.5 10.6 12.3 12.3 4.20 4.17 -20


The price targets for the European companies are based on a sum-of-the-parts based DCF methodology. For the US they are based on an assumed discount to the estimated greenfield replacement value.

Source: Company data, Datastream, Barclays Research. *The US Refiners are covered by Barclays Integrated oil research team, headed by Paul Cheng, in New York.

Dividend yield, %EV:EBIDA, x P/E, x FCF yield, %Barclays

2013Cons 2013

RoACE, %


13 August 2013 19

Valuations Refiners


0

5

10

15

20

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

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P

K

N

S

R

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T

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A

L

J

D

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T

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L

O


0

5

10

15

20

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

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L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O

P/E 2013 Average

0

2

4

6

8

10

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O



-20

-10

0

10

20

30

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O


05

1015202530

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

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L

O


-500

50100150200250300

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O

2012 2013

Datastream consensus e relative to Barclays EPS, % Dollar EPS change y/y, % EV: Capital employed, x

-20

0

20

40

60

80

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O


-100%

-50%

0%

50%

100%

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O


0.00.51.01.52.02.53.0

E

S

S

R

H

E

P

L

O

T

M

O

H

N

E

S

T

O

R

L

P

K

N

S

R

S

T

U

P

A

L

J

D

K

T

S

O

V

L

O

EV/Capital Employed 2013 Average

Source: Datastream, Barclays estimates


13 August 2013 20

Share price performance Refiners


-2 0 2 4 6 8

BrentESSR

TUPRSNES1V

ORLSector

PKNSRSLTS

MOHELPE

-5 0 5 10 15 20 25

BrentTUPRS

ORLPKNSRSLTS

SectorESSRMOHELPE

NES1V

-30 -20 -10 0 10

TUPRSORL

ESSRSRS

ELPEPKNLTS

SectorMOHBrent

NES1V

Change in USD share price over last year, % European Refiners vs Brent European Refiners vs US Refiners

-20 0 20 40 60 80 100

ORLBrent

TUPRSSRS

ESSRPKN

SectorLTS

ELPENES1V

MOH

708090

100110120130140150160


60

70

80

90

100

110

120

130


Essar vs European Refiners Hellenic Petroleum vs European Refiners Lotos Group vs European Refiners

60

80

100

120

140

160

60

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13ESSAR vs Sector ESSR, p

2345678910

5060708090

100110120130

Aug-12 Nov-12 Feb-13 May-13 Aug-13ELPE vs Sector ELPE, E

5

15

25

35

45

55

80

90

100

110

120

130

140

Aug-12 Nov-12 Feb-13 May-13 Aug-13LTS vs Sector LTS, PLN

Source: Datastream, Barclays Research. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage.


13 August 2013 21


Motor Oil vs European Refiners Neste Oil vs European Refiners ORL vs European Refiners

2

4

6

8

10

50

70

90

110

130

150

170

Aug-12 Nov-12 Feb-13 May-13 Aug-13MOH vs Sector MOH, E

4

8

12

16

20

60708090

100110120130140150

Aug-12 Nov-12 Feb-13 May-13 Aug-13NES1V vs Sector NES1V, E

100

120

140

160

180

200

220

50

60

70

80

90

100

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13ORL vs Sector ORL, ILS

PKN Orlen vs European Refiners Saras vs European Refiners Tupras vs European Refiners

25

35

45

55

65

60

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13PKN vs Sector PKN, PLN

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

60

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13SRS vs Sector SRS, E

202530354045505560

60

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13Tupras vs Sector TUPRS, TRY

Source: Datastream, Barclays Research. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage.


13 August 2013 22


PKN Orlen vs Lotos Group Saras vs Motor Oil Saras vs Neste

60

70

80

90

100

110


40

50

60

70

80

90

100

110


50

60

70

80

90

100

110


Neste vs Tupras Tupras vs Saras Hellenic vs Motor Oil

60

80

100

120

140

160

180


60

80

100

120

140

160


60

70

80

90

100

110


Essar vs Neste

10

30

50

70

90

110

130


Source: Datastream, Barclays.


13 August 2013 23

Share price performance RefinersLocal Price


Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6Refiners - EuropeEssar Energy 130 2.8 -2.5 -6.8 3.5 0.0 3.5 4.2 7.9 1.2 -3.1 -22.9 -6.9 -61.9Hellenic 7.98 0.8 6.1 18.1 16.6 8.4 16.6 9.2 -1.4 18.1 39.6 -22.5 -6.6 12.5Grupa Lotos 37.6 -2.6 6.4 11.8 11.1 15.7 11.1 -10.0 -5.5 32.0 17.2 -4.3 28.7 -19.9MOL 16450 -0.9 -1.0 1.4 -1.2 -1.2 -1.2 -8.0 -12.4 -4.6 14.5 -12.9 16.1 -15.0Motor Oil 8.09 0.4 5.6 6.2 13.7 6.6 13.7 -1.3 -11.1 36.7 13.4 -15.6 5.7 -13.4Neste Oil 13.16 -0.3 0.4 18.2 20.3 21.5 20.3 36.4 9.7 -3.9 16.8 -8.6 21.4 -30.0ORL 1.53 -0.3 0.9 -2.3 -2.8 0.8 -2.8 -19.3 -2.0 32.0 -18.1 -14.6 13.7 19.7PKN Orlen 45.4 -0.8 2.6 7.6 3.5 6.7 3.5 -9.5 -1.2 11.9 26.7 -6.4 21.3 -7.1Saras 0.94 -0.5 3.7 -1.6 -3.2 3.0 -3.2 -4.0 -6.8 -3.1 30.1 -27.0 6.5 -39.4Tupras 41.8 0.2 -0.7 3.2 -10.6 2.4 -10.6 -24.4 5.3 25.7 6.7 -16.2 20.5 14.7Arithmetic Average -0.1 2.1 5.6 5.1 6.4 5.1 -2.7 -1.8 14.6 14.4 -15.1 12.0 -14.0

Refiners - USAlon 12.2 -3.7 -6.4 -10.0 -15.5 -10.5 -15.5 -32.4 5.3 28.8 61.9 -6.5 3.9 44.4Delek 29.4 -1.3 -1.6 -0.1 2.1 -2.9 2.1 16.0 55.8 -2.5 44.9 13.4 35.9 55.7HollyFrontier 44.8 -1.5 -0.8 0.9 4.6 -1.8 4.6 -3.9 10.5 12.2 16.5 10.2 37.4 82.0Marathon Petroleum 73.2 1.0 1.8 1.8 3.1 -0.1 3.1 16.3 42.2 13.8 21.5 3.6 30.2 NASunCoke Energy 16.4 2.3 2.8 1.6 17.1 3.9 17.1 5.3 4.7 -6.5 10.0 3.1 26.9 NATesoro 53.1 -0.5 -4.0 -2.6 1.5 -6.6 1.5 20.5 32.9 2.4 67.9 -7.0 14.9 111.2Valero 37.1 0.3 5.8 3.0 6.8 3.8 6.8 19.1 33.3 6.2 31.2 -6.3 22.4 22.0Arithmetic Average -0.5 -0.3 -0.8 2.8 -2.0 2.8 5.8 26.4 7.8 36.3 1.5 24.5 63.0

Source: Datastream, Barclays Research. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies

under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage.

26643Rectangle


13 August 2013 24

Services


13 August 2013 25

Valuations ServicesChange in



Services - EuropeAker Solutions U/W 90 105 17 7.5 6.6 6.4 12.3 8.6 7.3 1.4 7.3 8.5 4.1 5.2 6.1 11.5 14.5 15.7 7.28 6.96 -4

Amec U/W 1090 1350 24 11.6 9.9 8.3 12.1 10.9 9.4 7.2 8.9 10.1 3.7 4.1 4.8 20.4 20.7 21.0 80.69 87.56 -1

CGG Veritas U/W 18.0 22.0 22 16.7 8.8 5.9 16.5 8.7 6.7 (13) (4.8) (0.9) 0.0 0.0 0.0 5.2 7.9 10.0 1.10 1.19 -2

Hunting O/W 862 1100 28 10.6 9.3 8.0 13.9 12.0 10.5 4.3 6.3 8.2 2.4 2.8 3.1 9.4 10.6 11.9 62.05 62.63 -1

PGS O/W 80.7 135 67 7.2 4.7 3.9 9.6 5.7 4.7 (0.6) 1.8 1.6 6.2 6.2 6.2 11.2 16.3 18.1 1.45 1.42 -5

Polarcus O/W 5.27 10.0 90 4.0 2.7 1.9 4.8 2.9 2.5 4.8 6.7 7.8 0.0 0.0 0.0 0.4 0.2 0.1 0.19 0.12 -33

Saipem O/W 16.0 20.0 25 16.7 7.5 5.6 (21) 11.7 8.1 (8.2) 18.1 18.5 0.0 2.8 4.1 0.2 6.9 9.6 -0.76 -0.75 3

SBM Offshore O/W 15.4 19.3 25 12.4 7.2 5.7 12.7 7.5 5.3 (22) (5.1) (3.1) 0.0 4.0 5.6 9.8 12.6 14.8 1.22 1.57 5

Subsea 7 O/W 113 180 59 10.0 6.1 4.9 25.3 10.3 8.2 1.4 7.8 9.8 1.3 3.1 3.9 4.3 9.3 11.3 1.58 0.91 -41

Technip O/W 83.5 113 35 9.3 7.3 6.2 15.2 12.1 10.7 5.7 7.1 8.7 2.3 2.7 3.0 11.2 13.6 14.8 5.48 5.38 0

Tecnicas Reunidas E/W 34.4 47 37 10.9 8.4 5.0 12.9 10.9 9.8 8.5 11.3 11.6 4.3 5.0 5.6 27.1 28.5 27.1 2.66 2.54 -4

TGS U/W 188 220 17 4.4 3.5 3.1 11.4 8.9 8.0 3.4 6.0 7.2 4.3 5.6 6.2 23.3 25.9 24.7 2.81 2.79 -7

Wood Group O/W 900 1100 22 11.9 10.0 8.4 13.7 12.1 10.8 5.2 7.5 8.1 1.4 1.6 1.8 15.1 16.2 16.3 0.66 0.64 0

Arithmetic average 32 10.2 7.4 5.7 10.8 9.2 7.6 (2.6) 2.7 11.1 2.4 3.4 4.1 12.6 14.8 15.5 -8Source: Company data, Datastream, Barclays Research - Price targets are based on a sum-of-the-parts based DCF methodology.

RoACE, %EV:EBIDA, x P/E, x FCF yield, % Dividend yield, %Barclays

2013Cons 2013


13 August 2013 26

Valuations Services


-10-505

1015

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-30-20-10

0102030

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P/E 2013 Average

01234567

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-10

-5

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05

101520253035

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-200-150-100

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2012 2013

Datastream consensus e relative to Barclays EPS, % Dollar EPS change y/y, % EV:Capital Employed, x

-20

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-100%100%300%500%700%900%

1100%

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-4

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EV/Capital Employed 2013 Average

Source: Datastream, Barclays Research estimates


13 August 2013 27

Share price performance Services


-5 0 5 10 15 20 25 30 35

SPMBrentAMCTEC

CGGPFC

SectorAKSO

PGSSUBWG

HTGSBMO

TREMT

-20 0 20 40 60 80

TREBrentCGGPFCTECWG

SectorSUBHTGAMCPGS

AKSOSPM

SBMOMT

-40 -30 -20 -10 0 10 20

SPMMT

SUBPFCPGSTRE

SectorCGGTEC

AMCBrentHTG

AKSOWG

SBMO

Change in USD share price over last year, % European Services vs US Services Amec vs European Services

-80 -60 -40 -20 0 20 40 60 80

SPMPFCMT

SectorSUBCGGPGS

AKSOBrentAMCTRETEC

HTGWG

SBMO

60

70

80

90

100

110

120


700

900

1100

1300

70

80

90

100

110

120

130

Aug-12 Nov-12 Feb-13 May-13 Aug-13AMEC vs Sector AMEC, p

Aker Solutions vs European Services CGG Veritas vs European Services Maire Tecnimont vs European Services

405060708090100110120130

80

90

100

110

120

130

140

150

Aug-12 Nov-12 Feb-13 May-13 Aug-13AKSO vs Sector AKSO, NOK

8

12

16

20

24

28

32

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13CGG vs Sector CGG, E

0.0

0.5

1.0

1.5

2.0

1030507090

110130150170

Aug-12 Nov-12 Feb-13 May-13 Aug-13MT vs Sector MT, E

Source: Datastream, Barclays Research. Relative calculations use the Barclays Oil Services Index calculated as a market capitalisation weighted average for companies under coverage


13 August 2013 28


Petrofac vs European Services PGS vs European Services Saipem vs European Services

1100

1200

1300

1400

1500

1600

1700

1800

60

70

80

90

100

110

120

Aug-12 Nov-12 Feb-13 May-13 Aug-13PFC vs Sector PFC, p

40

50

60

70

80

90

100

110

60

70

80

90

100

110

120

130

Aug-12 Nov-12 Feb-13 May-13 Aug-13PGS vs Sector PGS, NOK

10

15

20

25

30

35

40

45

10

30

50

70

90

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13SPM vs Sector SPM, E

SBM Offshore vs European Services Subsea 7 vs European Services Technip vs European Services

0

5

10

15

20

25

406080

100120140160180200

Aug-12 Nov-12 Feb-13 May-13 Aug-13SBMO vs Sector SBMO, E

80

100

120

140

160

80859095

100105110115120125

Aug-12 Nov-12 Feb-13 May-13 Aug-13SUB vs Sector SUB, NOK

40

50

60

70

80

90

100

80

90

100

110

120

130

140

Aug-12 Nov-12 Feb-13 May-13 Aug-13TEC vs Sector TEC, E

Tecnicas Reunidas vs European Services Wood Group vs European Services

30

32

34

36

38

40

80

90

100

110

120

130

140

150

Aug-12 Nov-12 Feb-13 May-13 Aug-13TRE vs Sector TRE, E

600

650

700

750

800

850

900

950

80

90

100

110

120

130

140

Aug-12 Nov-12 Feb-13 May-13 Aug-13WG vs Sector WG, p

Source: Datastream, Barclays Research. Relative calculations use the Barclays Oil Services Index calculated as a market capitalisation weighted average for companies under coverage.


13 August 2013 29


Amec vs Wood Group Saipem vs Technip Petrofac vs Wood Group

70

75

80

85

90

95

100

105

110


30

40

50

60

70

80

90

100

110


60

70

80

90

100

110

120

130


Maire Tecnimont vs Tecnicas Reunidas PGS vs CGG Veritas Petrofac vs Maire Tecnimont

10

30

50

70

90

110

130


70

80

90

100

110

120

130

140

150


70

90

110

130

150

170

190

210


Petrofac vs Tecnicas Reunidas Subsea 7 vs Saipem Subsea 7 vs Technip

50

60

70

80

90

100

110

120


70

120

170

220

270

320


70

80

90

100

110

120


Source: Datastream, Barclays Research.


13 August 2013 30

Share price performance Services Local Price

09-Aug -1d -5d -10d -30d MTD QTD YTD 1Q 13 4Q 12 3Q 12 2Q 12 1Q 12 4Q 11Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6

Oil Services - EuropeAker 90 1.2 1.8 2.2 13.3 2.2 13.3 -24.4 -8.2 5.3 34.3 -16.4 60.1 12.4AMEC 1090 0.8 1.7 3.5 11.0 3.7 11.0 3.8 -1.7 -12.6 17.8 -11.2 25.5 15.8CGG Veritas 18.0 -0.4 -0.4 -4.7 8.9 -4.7 8.9 -19.2 -24.2 -7.1 28.7 -13.1 25.6 32.3Hunting 862 0.8 4.5 4.2 20.6 6.5 20.6 4.2 5.0 -6.5 17.9 -25.3 29.9 75.5Maire Tec 1.13 8.4 30.9 27.2 49.5 27.0 49.5 9.3 -10.7 -38.0 2.2 -1.7 -34.3 -59.0Petrofac 1275 1.0 0.5 0.1 9.0 -0.5 9.0 -25.0 -17.5 1.3 18.3 -21.7 24.1 29.9PGS 80.7 1.3 3.4 1.1 14.0 2.9 14.0 -19.4 -9.9 -0.5 36.2 -16.8 33.1 35.7Polarcus 5.27 4.2 7.8 6.8 11.4 8.4 11.4 -24.3 -8.2 5.1 58.0 -30.4 111.1 -27.6Saipem 16.0 0.8 -1.2 3.4 31.7 0.3 31.7 -44.7 -20.3 -21.0 8.3 -13.9 20.9 39.1SBM 15.40 -0.3 5.1 6.9 22.3 6.4 22.3 51.1 19.6 -4.9 3.3 -32.3 -1.3 45.3Subsea 7 113 1.0 2.1 1.7 11.2 2.6 11.2 -18.3 -1.4 0.1 17.2 -22.6 42.1 28.7Technip 83.5 -0.3 0.1 -1.3 9.9 1.2 9.9 -2.6 -10.3 0.0 7.0 -11.6 24.8 66.5Tecnicas 34.4 2.0 3.4 -5.3 0.2 1.0 0.2 -0.6 1.5 -1.8 11.5 0.3 15.4 -21.6TGS 188 2.5 2.5 1.2 11.3 0.5 11.3 -1.4 15.7 -2.6 21.6 -1.9 23.3 95.8Wood Group 900 0.0 2.4 2.2 13.8 2.2 13.8 18.3 11.4 -10.8 20.7 -6.1 14.9 109.1Arithmetic Average 1.5 4.1 3.1 15.2 3.8 15.2 -6.1 -3.9 -3.2 19.2 -15.1 27.7 27.9

Source: Datastream, Barclays. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage.


13 August 2013 31

Share price performance Services Local Price

09-Aug -1d -5d -10d -30d MTD QTD YTD 1Q 13 4Q 12 3Q 12 2Q 12 1Q 12 4Q 11Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6Oil Services - U.S.Baker Hughes 47.4 -1.0 -2.0 -1.1 2.8 0.0 2.8 16.1 13.6 -9.3 10.0 -2.0 -13.8 16.6Basic Energy Systems 12.08 1.6 -2.0 -1.1 -0.1 5.6 -0.1 5.9 19.8 5.7 8.7 -40.5 -11.9 164.1Bristow Group 69.1 1.0 -0.2 0.7 5.8 1.6 5.8 28.7 22.9 6.9 24.3 -14.8 0.7 61.4Cameron Int 57.5 -0.8 -2.4 0.6 -6.0 -3.0 -6.0 1.9 15.5 1.0 31.3 -19.2 7.4 51.8CARBO 84.8 -0.9 -4.4 -3.7 25.8 -3.5 25.8 8.3 16.2 22.8 -18.0 -27.2 -14.5 68.8Chart industries 110.7 -1.7 -3.4 9.3 17.7 -2.6 17.7 66.0 20.0 -10.0 7.4 -6.2 35.6 250.4Core Laboratories 150.4 -0.4 -2.5 0.3 -0.8 0.5 -0.8 37.6 26.2 -9.4 4.8 -11.9 15.5 54.5Diamond Off 68.2 -1.0 0.4 0.4 -0.9 1.1 -0.9 0.4 2.4 2.3 11.3 -11.4 20.8 -13.4Dresser-Rand 61.4 0.1 -0.7 1.1 2.4 0.9 2.4 9.4 9.8 2.9 23.7 -4.0 -7.1 59.1Dril-Quip 101.7 -0.3 0.6 11.0 12.6 11.8 12.6 39.2 19.3 2.4 9.6 0.9 -1.2 49.5ENSCO 58.9 -0.3 0.7 0.0 1.3 2.6 1.3 -0.7 1.2 8.2 16.2 -11.3 12.8 16.8Exterran Holdings 28.3 -0.6 -11.5 -11.0 0.7 -10.8 0.7 29.2 23.2 8.0 59.1 -3.3 44.9 -64.9FMC Tech 53.9 0.0 -2.1 -1.1 -3.1 1.2 -3.1 25.9 27.0 -8.7 18.0 -22.2 -3.5 95.5Global Geophysical 3.33 -4.3 -21.5 -19.8 -29.4 -24.1 -29.4 -13.5 -36.4 -30.9 -10.0 -42.3 57.9 -2.0Gulfmark Offshore 48.9 -0.3 -2.9 0.1 8.5 -0.7 8.5 42.0 13.1 2.5 -2.9 -25.9 9.4 55.8Halliburton 46.0 -0.2 -0.6 0.1 10.3 1.9 10.3 32.7 16.5 3.0 18.7 -14.5 -3.8 38.2Helmerich & Payne 67.9 0.1 3.5 4.9 8.7 7.5 8.7 21.2 8.4 19.4 9.5 -19.4 -7.6 60.0Hercules Offshore 6.97 -0.7 -2.8 -5.3 -1.0 1.0 -1.0 13.0 20.3 26.4 37.7 -25.2 6.5 81.2Hornbeck Offshore 58.3 -0.5 -0.7 7.2 8.9 10.1 8.9 69.7 35.3 -7.1 -5.5 -7.7 35.5 102.7ION Geophysical 5.26 -5.9 -18.3 -13.1 -12.6 -14.5 -12.6 -19.2 4.6 -5.8 5.3 2.2 5.2 70.3Key Energy Ser 6.51 2.7 2.7 -4.5 9.4 2.7 9.4 -6.3 16.3 -0.3 -7.9 -50.8 -0.1 68.9Nabors 15.6 -0.4 -1.0 4.4 1.8 1.2 1.8 7.8 12.2 2.8 -2.6 -17.7 0.9 -1.6National Oilwell 72.5 -0.4 0.2 1.3 5.2 3.3 5.2 6.1 3.5 -15.1 24.3 -18.9 16.9 104.5Noble Corp. 39.9 1.4 0.4 3.5 6.2 4.5 6.2 14.6 9.6 -2.2 10.0 -13.2 24.0 -7.2Oceaneering 81.6 -0.9 -3.4 1.1 13.0 0.6 13.0 51.7 23.5 -1.9 15.4 -11.2 16.8 109.1Parker Drilling 6.14 1.3 0.8 -1.1 23.3 1.2 23.3 33.5 -7.0 7.2 -6.2 -24.5 -16.7 98.1Patterson-UTI 20.1 0.6 -0.9 0.0 3.8 1.6 3.8 7.8 28.0 18.4 8.7 -15.8 -13.5 53.2Rowan Comp 36.1 0.2 2.0 4.9 5.9 5.0 5.9 15.4 13.1 -6.7 4.5 -1.8 8.6 39.8Schlumberger 80.5 -0.9 -2.9 -1.7 12.3 -1.0 12.3 16.1 8.1 -4.5 11.4 -7.2 2.4 23.6Seacor 85.8 0.1 -2.1 0.0 3.3 -2.0 3.3 32.0 13.3 -3.2 -6.7 -6.7 7.7 27.4Seadrill 257 -0.3 0.5 5.1 9.4 2.7 9.4 20.2 -0.6 -9.1 10.0 -5.1 11.6 87.8Superior Energy 25.4 0.5 -3.2 -4.8 -2.0 -0.8 -2.0 22.6 25.3 2.3 1.4 -23.3 -7.3 52.2Tenaris 17.3 0.4 4.0 5.7 15.0 2.4 15.0 12.1 -0.9 -1.6 16.7 -8.1 2.7 5.9Tetra 11.35 0.4 9.5 11.2 10.6 12.2 10.6 49.5 35.2 22.8 -15.1 -24.3 0.9 7.1Thermon 19.5 1.9 -2.4 -6.0 -4.3 -2.4 -4.3 -13.4 -1.4 -11.8 20.7 1.3 16.1 NATidewater 55.9 -0.2 -8.1 -6.6 -1.9 -5.2 -1.9 25.1 13.0 -6.9 4.7 -14.2 9.6 28.6Transocean 47.5 -2.2 -1.7 -0.4 -0.9 0.7 -0.9 6.4 16.3 -3.4 0.4 -18.2 42.5 -21.5Weatherford 14.5 -0.1 0.2 5.2 6.0 4.0 6.0 29.8 8.5 -10.5 0.4 -16.3 3.1 10.7Arithmetic Average -0.3 -2.1 -0.1 4.4 0.5 4.4 19.6 13.0 0.2 9.2 -15.3 8.3 51.4

Source: Datastream, Barclays. The European Market is the Eurostoxx, the European Integrateds, is the corresponding FTSE 300 index. The Barclays European Refining Index is calculated using arithmetic averages for companies under coverage. The Barclays European Services Index is calculated using market capitalisation weighted averaged for companies under coverage. The Barclays E&Ps Index is calculated using a free float weighted average for our coverage.


13 August 2013 32

E&Ps


13 August 2013 33

Valuations E&P - EuropeChange in


Company Rating 09-Aug Price side, % 13F 14F 15F 13F 14F 15F 13F 14F 15F 13F 14F 15F NAV NAV last mnth

E&Ps - EuropeAfren O/W 144 210 46 2.7 3.6 4.4 7.0 5.8 4.9 4.7 1.1 (1.0) 3.1 (0.7) 1.7 210 189 1

Bowleven O/W 60.8 235 287 nm nm nm nm nm nm (6.9) (3.4) (0.9) (10) (2.2) (0.1) 235 181 6

Cairn Energy E/W 274 355 30 nm nm nm nm nm 7.2 (10) (20) (38) (37) (20) 16 355 366 0

Caracal Energy O/W 400 640 60 6.9 1.8 1.5 nm 3.6 3.0 (0.5) (0.3) (0.0) 7.4 24 16.1 640 - -

Enquest E/W 126 160 27 3.0 1.8 1.1 6.0 5.2 5.3 7.5 12.8 12.6 (8.0) (18.2) (25.3) 160 155 -2

Oryx Petroleum O/W 14.3 21.0 47 nm nm nm nm nm nm (0.2) (0.2) (0.3) (0) 0.2 0.6 21 20 -6

Premier Oil O/W 361 600 66 3.7 4.0 3.1 8.3 7.9 5.6 (2) (4.5) (1.5) 54 52 45 600 499 1

Rockhopper Exploration O/W 133 290 118 nm nm nm nm nm nm (2) (3.8) (4.1) (67) (63) (58) 290 328 -13

Salamander Energy O/W 119 275 131 3.0 2.9 2.7 7.0 5.6 5.5 (27) 0.9 16.5 55 47 31 275 244 -2

Soco International U/W 377 385 2 5.8 5.3 4.4 7.6 7.8 7.5 9.6 10.3 10.7 (28) (35) (41) 385 424 5

Tullow Oil O/W 1067 1500 41 12.2 12.6 14.9 29.9 29.6 34.9 (1.5) (4.2) (11.0) 25 37 65 1500 1286 -3

Arithmetic average 78 5.3 4.6 4.6 11.0 9.4 9.3 (2.6) (1.1) (1.6) (0) 1.9 4.7 -1Source: Company data, Datastream, Barclays Research - Price targets are based on a sum-of-the-parts based DCF methodology.

11.3 5.0

12.4 11.6

49.5 19.7

1.7

EV/2P+2Cx

6.4

-

23.0

-

10.2

5.9

- 2.0

19.5

15.7

10.5

12.7 6.0

9.6

24.6

23.0

21.5

Barclays 2013

Cons 2013

EV:EBIDA, x P/E, x FCF yield, % Net Debt/Equity, %EV/2P

x


13 August 2013 34

Valuations E&P - Europe

EV:EBIDA, x P/E, x Free cash flow yield, %

-10

-5

0

5

10

15

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


-10

-5

0

5

10

15

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W

P/E 2013 Average

-10

-5

0

5

10

15

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


Gearing - Net Debt to Equity, % Dollar EPS Growth, y/y % EV:2P, x

-100%

-60%

-20%

20%

60%

100%

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W

2012 2013

-500%-400%-300%-200%-100%

0%100%

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


0102030405060

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


EV/2P+2C, x Datastream consensus relative to Barclays NAV, % ROACE, %

0

5

10

15

20

25

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


-20

-10

0

10

20

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


-20%

0%

20%

40%

A

F

R

B

L

V

N

C

N

E

C

R

C

L

E

N

Q

O

X

C

P

M

O

R

K

H

S

M

R

S

I

A

T

L

W


Source: Datastream


13 August 2013 35

Share price performance E&P - Europe


-2 -1 0 1 2 3 4 5

BrentBLVNENQ

PMODNO

SectorOXCAFR

SMDRRKHCNETLW

SIA

-20 -10 0 10 20 30

SMDRBLVNBrentTLWOXCENQ

SectorSIA

RKHCNEAFR

PMODNO

-40 -30 -20 -10 0 10

SMDRBLVNPMOENQOXC

SIACNERKH

SectorTLW

BrentAFR

Change in USD share price over last year, % European E&P vs Brent European E&P vs European market

-60 -40 -20 0 20 40 60 80

SMDRRKHTLW

BLVNCNE

PMOSectorBrentENQSIA

AFRDNO

80

85

90

95

100

105

110

115


70

75

80

85

90

95

100

105


Afren vs European E&P Bowleven vs European E&P Cairn Energy vs European E&P

40

80

120

160

200

405060708090

100110120130

Aug-12 Nov-12 Feb-13 May-13 Aug-13AFR vs Sector AFR, p

40

50

60

70

80

90

100

110

10

30

50

70

90

110

130

150

Aug-12 Nov-12 Feb-13 May-13 Aug-13BLVN vs Sector BLVN, p

200

220

240

260

280

300

320

40

50

60

70

80

90

100

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13CNE vs Sector CNE, p

Source: Datastream, Barclays Research. Relative calculations use the Barclays European E&P Index for the European companies. The index is calculated using free float weighted averages for the E&P companies under coverage.


13 August 2013 36

Share price performance E&P - Europe

Enquest vs European E&P Premier Oil vs European E&P Rockhopper Exploration vs European E&P

90

100

110

120

130

140

150

80

85

90

95

100

105

110

115

Aug-12 Nov-12 Feb-13 May-13 Aug-13ENQ vs Sector ENQ, p

200

250

300

350

400

450

60

70

80

90

100

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13PMO vs Sector PMO, p

80

100

120

140

160

180

200

220

6065707580859095

100105

Aug-12 Nov-12 Feb-13 May-13 Aug-13RKH vs Sector RKH, p

Salamander Energy vs European E&P Soco International vs European E&P Tullow Oil vs European E&P

100

120

140

160

180

200

220

240

40

60

80

100

120

140

Aug-12 Nov-12 Feb-13 May-13 Aug-13SMDR vs Sector SMDR, p

200

250

300

350

400

450

60

70

80

90

100

110

120

130

Aug-12 Nov-12 Feb-13 May-13 Aug-13SIA vs Sector SIA, p

600

800

1000

1200

1400

1600

60

70

80

90

100

110

Aug-12 Nov-12 Feb-13 May-13 Aug-13TLW vs Sector TLW, p

Source: Datastream, Barclays Research. Relative calculations use the Barclays European E&P Index for the European companies. The index is calculated using free float weighted averages for the E&P companies under coverage


13 August 2013 37

Share price performance E&P-Europe

Tullow Oil vs Cairn Energy Bowleven vs Salamander Energy Cairn Energy vs Premier Oil

50

60

70

80

90

100

110

120

130


40

60

80

100

120

140

160


70

75

80

85

90

95

100

105

110


Tullow Oil vs Soco International Soco International vs Premier Oil Premier Oil vs Tullow Oil

30

50

70

90

110

130


80

90

100

110

120

130

140


70

80

90

100

110

120

130

140


Afren vs Cairn Energy Afren vs Premier Oil Afren vs Soco International

70

80

90

100

110

120

130

140


80

90

100

110

120

130


60

70

80

90

100

110

120


Source: Datastream, Barclays.


13 August 2013 38

Share price performance E&P - Europe & Israel Local Price

09-Aug -1d -5d -10d -30d MTD QTD YTD 1Q 13 4Q 12 3Q 12 2Q 12 1Q 12 4Q 11Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6

E&P - EuropeAfren 144 2.1 2.1 8.1 13.7 8.3 13.7 4.8 1.0 -7.1 39.1 -23.7 60.0 11.3BowLeven 60.8 -0.6 1.3 -1.4 5.0 -1.2 5.0 -11.4 36.6 -16.3 36.1 -42.8 52.9 -45.2Cairn Energy 274 -0.4 3.0 3.9 10.9 4.3 10.9 -1.1 -3.5 -4.5 6.9 -19.5 10.6 -32.0Enquest 126 0.0 2.1 1.7 9.1 4.2 9.1 0.3 11.8 4.5 9.7 -16.2 40.2 -1.0Oryx Petroleum 14.3 1.0 1.0 0.3 4.5 -0.1 4.5 NA NA NA NA NA NA NAPremier Oil 361 1.2 1.3 1.3 10.9 2.5 10.9 2.4 7.9 -7.1 9.3 -15.4 11.1 21.8Rockhopper Exploration 133 2.3 1.9 6.2 10.5 4.0 10.5 -17.6 -8.7 -10.1 -30.5 -23.0 25.1 -1.6Salamander Energy 119 0.0 2.3 -6.7 -15.3 2.2 -15.3 -40.1 2.2 -5.7 20.6 -4.0 9.5 -8.3Soco International 377 0.3 3.5 4.5 10.4 4.9 10.4 0.5 -2.0 7.4 17.4 -4.0 4.0 -21.7Tullow Oil 1067 2.3 1.6 5.2 9.1 5.3 9.1 -19.2 -8.8 -9.2 -4.1 -5.5 12.0 45.4Arithmetic Average 0.5 1.8 1.7 5.1 3.0 5.1 -8.6 3.4 -4.7 9.0 -18.4 30.7 10.7E&P - IsraelAvner 2.70 0.3 0.7 3.9 6.9 0.6 6.9 10.6 4.5 20.7 1.7 -18.2 6.3 48.3Delek Drilling 15.8 0.6 1.3 5.2 8.4 1.4 8.4 10.9 4.9 23.8 4.5 -18.8 1.5 51.1Delek Energy Systems 2015 -1.8 6.7 8.8 17.5 7.3 17.5 32.1 5.3 6.3 14.7 -19.8 6.0 62.3Isramco Negev 0.63 -0.3 -1.2 2.9 4.8 -1.5 4.8 10.6 9.1 31.0 1.3 -12.5 13.2 5.0Ratio Oil 0.38 4.4 4.8 8.8 16.9 7.4 16.9 18.0 0.3 29.7 -8.1 -22.6 9.1 64.2Arithmetic Average 0.6 2.5 5.9 10.9 3.0 10.9 16.5 4.8 22.3 2.8 -18.4 7.2 46.2

Source: Datastream, Barclays Research. The European E&P Sector is the corresponding Euro Stoxx indices and the US E&P Sector is the corresponding S&P 500 indices.


13 August 2013 39

Share price performance E&P US (Large Cap) Local Price


Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6E&P - US (Large-Cap)Anadarko 89.8 -0.8 -0.7 1.5 4.5 1.4 4.5 20.8 17.7 5.2 5.6 -15.5 2.6 105.4Apache 83.2 0.0 1.5 1.4 -0.8 3.7 -0.8 6.0 -1.7 -9.2 -1.6 -12.5 10.9 8.2Canadian Natural Res 31.4 -0.7 -3.4 -2.6 8.5 -1.6 8.5 6.0 11.5 -8.9 15.1 -19.0 -11.7 12.8Canadian Oil Sands 20.5 0.9 0.3 0.8 7.8 2.6 7.8 -1.8 1.8 -3.8 10.6 -8.1 -7.8 -10.0Cenovus Energy 29.9 1.6 -1.7 -1.9 2.0 -2.0 2.0 -13.3 -7.4 -5.2 9.8 -11.6 8.1 29.0Devon 58.5 -0.3 4.5 4.8 12.8 6.3 12.8 12.4 8.4 -14.4 4.3 -18.5 14.7 2.2Encana 17.5 0.3 -0.7 -3.0 3.3 -0.1 3.3 -11.4 -1.5 -13.2 5.2 6.0 6.0 -39.2EOG Resources 159 0.2 3.8 9.0 20.6 9.2 20.6 31.5 6.0 5.8 24.3 -18.9 12.8 -0.6Kosmos 10.1 -0.9 -5.3 -7.8 -0.7 -4.5 -0.7 -18.3 -8.5 7.4 3.1 -16.5 8.0 NANewfield Exploration 24.7 0.4 0.4 -0.5 3.2 0.2 3.2 -8.0 -16.3 -14.7 6.9 -15.5 -8.1 -21.1Noble 63.8 -0.2 -1.7 0.6 6.3 2.1 6.3 25.5 13.7 10.3 9.3 -13.3 3.6 54.2Occidental 88.3 -0.2 -0.7 -2.7 -1.1 -0.9 -1.1 15.2 2.3 -11.3 0.3 -9.9 1.6 22.1QEP Resources 29.5 -1.8 -2.5 -3.1 6.2 -3.2 6.2 -2.5 5.2 -5.6 5.6 -1.7 4.1 0.0Pioneer Natural 176 -0.4 -3.1 13.5 21.3 13.5 21.3 64.8 16.6 2.6 18.4 -21.0 24.7 51.9Range Resources 79.5 -0.5 -2.3 -1.2 2.8 0.5 2.8 26.5 29.0 -10.8 12.9 6.4 -6.1 54.1Southwestern Energy 37.5 -0.6 -3.0 -4.7 2.6 -3.4 2.6 12.2 11.5 -5.5 8.9 4.3 -4.2 -17.7Talisman 11.6 1.0 -0.1 -4.1 -1.4 -0.9 -1.4 -0.7 8.2 -16.8 16.7 -8.8 -1.6 -15.8Ultra Petroleum 22.0 0.0 -1.6 3.5 11.0 1.6 11.0 21.3 10.9 -21.0 -4.7 1.9 -23.6 -33.4WPX Energy 19.2 -1.2 -0.1 -1.8 1.2 -0.3 1.2 28.8 7.7 -13.2 2.5 -10.2 -0.9 NAArithmetic Average -0.2 -0.9 0.1 5.8 1.3 5.8 11.3 6.0 -6.4 8.1 -9.6 1.7 11.9


26643Rectangle


13 August 2013 40

Share price performance E&P US (Mid Cap) Local Price


Indices & marketsFTSE All 3502 0.6 0.9 1.8 9.0 2.2 9.0 8.2 2.1 2.5 6.8 -5.5 8.0 18.2StoxxEuro 286 0.2 1.3 3.9 11.8 3.0 11.8 11.1 -0.6 7.3 9.3 -12.7 12.3 -2.4S&P 500 1691 -0.4 -1.1 0.0 5.3 0.3 5.3 18.6 10.0 -1.3 5.8 -3.3 12.0 22.4MSCI EMG 1768 0.2 0.3 1.7 7.9 2.5 7.9 10.2 4.4 5.2 6.1 -8.4 10.0 5.6E&P - US (Mid-Cap)ARC Resources 25.2 -0.3 -5.1 -3.5 -6.3 -3.0 -6.3 -0.4 7.6 -0.7 8.1 -2.0 -7.1 32.9Baytex Energy 41.7 0.1 -2.5 -2.7 12.5 -0.3 12.5 -6.1 -2.7 -9.8 12.9 -18.8 -7.4 87.2Bonavista Energy 13.0 0.8 0.9 -2.0 -2.2 1.0 -2.2 -15.0 -1.2 -17.1 13.5 -22.7 -21.1 19.4Chesapeake 25.0 0.0 0.2 9.4 22.7 7.3 22.7 50.4 22.8 -13.8 1.5 -19.7 3.9 7.1Cimarex 80.5 0.9 0.9 6.7 23.8 5.3 23.8 39.4 30.7 -1.1 6.2 -27.0 21.9 -11.7Comstock 16.1 -0.1 -4.9 -11.0 2.2 -4.1 2.2 6.3 7.5 -21.5 11.9 3.7 3.5 -44.0Concho Resources 98.5 0.7 4.2 13.1 17.7 9.8 17.7 22.3 20.9 -17.4 11.3 -16.6 8.9 73.5Crescent Point 39.7 2.5 1.9 2.9 14.0 1.7 14.0 2.0 -0.1 -15.6 18.7 -13.2 -2.6 26.2Crimson Exploration 3.2 -0.3 0.0 -2.1 13.1 -0.6 13.1 16.4 4.4 -36.0 -7.0 10.6 45.1 10.9Denbury Resources 17.5 1.1 -2.2 0.1 1.2 0.1 1.2 8.1 15.1 -1.3 6.9 -17.1 20.7 4.1Enerplus 17.6 4.2 2.9 4.3 15.8 5.1 15.8 31.6 12.8 -23.4 29.1 -42.6 -12.0 18.0Exco Resources 7.84 1.2 -10.5 -7.8 2.6 -9.6 2.6 15.8 5.3 -18.8 5.5 14.5 -36.6 -29.9Forest Oil 5.13 0.4 -0.2 2.0 25.4 0.2 25.4 -23.3 -21.4 -21.8 15.3 -39.5 -10.6 -29.6Pengrowth Energy 5.95 2.2 0.8 -0.6 17.9 0.3 17.9 16.2 2.6 -26.9 6.3 -32.3 -11.5 15.5Penn West Petroleum 12.7 4.6 1.8 1.8 17.2 4.3 17.2 13.7 -0.9 -23.5 6.1 -31.3 -1.7 3.9Penn Virginia 23.5 -0.9 -8.3 -12.6 -13.9 -9.2 -13.9 -9.5 -7.2 3.6 3.6 12.2 -14.5 23.0Petrobakken Energy NA NA NA NA NA NA NA NA NA NA NA NA NA NAPeyto Exp 27.8 1.5 -4.4 -2.8 -6.4 -6.1 -6.4 16.9 14.9 -7.0 30.4 15.2 -31.6 74.9Plains Exp NA NA NA NA NA NA NA NA NA NA NA NA NA NAProgress Energy NA NA NA NA NA NA NA NA NA NA NA NA NA NAQuicksilver 1.65 0.0 5.8 5.1 -1.8 13.8 -1.8 -42.3 -21.3 -31.7 -24.5 7.5 -24.9 -40.1Resolute 8.39 -0.1 -3.7 2.7 5.1 0.2 5.1 3.2 41.6 -8.7 -7.3 -15.9 5.4 -13.3Sandridge 5.30 -1.5 -5.7 -0.9 11.3 -2.2 11.3 -16.5 -17.0 -9.7 4.3 -14.6 -4.0 37.8SM Energy 68.0 0.1 -3.6 3.0 13.3 -1.1 13.3 30.2 13.4 -3.8 10.2 -30.6 -3.2 82.1Stone Energy 28.1 2.1 11.2 13.7 27.7 15.5 27.7 37.1 6.0 -17.0 -0.9 -11.4 8.4 133.9Swift Energy 11.9 0.7 -1.2 -8.6 -0.4 -6.3 -0.4 -22.4 -3.8 -27.0 12.2 -35.9 -2.3 11.9Trilogy Energy 28.8 -0.6 0.0 -3.5 -6.2 -1.3 -6.2 -4.5 -1.4 9.4 13.0 -12.5 -28.5 323.0Vermilion Energy 56.9 0.3 -1.3 5.1 13.4 3.1 13.4 5.8 -0.8 11.1 4.1 -2.1 3.3 40.8W&T Offshore 15.6 -0.4 -8.3 -5.3 9.2 -4.2 9.2 -2.6 -11.4 -15.9 22.7 -27.4 -0.6 130.8Whiting PTL 51.0 -0.1 -3.2 0.0 10.7 -0.9 10.7 17.6 17.2 -7.9 15.2 -24.3 16.3 20.6Arithmetic Average 0.7 -1.3 0.2 8.9 0.7 8.9 7.1 4.9 -13.1 8.5 -14.6 -3.1 37.4



13 August 2013 41

Global Emerging Market Oils


13 August 2013 42

Valuations GEM Change in



Integrated - RussiaAlliance Oil E/W 46.2 62.0 34 3.9 2.7 2.8 2.9 1.9 2.4 (17) 34 28 0.0 0.0 0.0 13.5 12.5 12.5 2.49 1.58 -12

Bashneft E/W 58.9 71.0 21 4.3 3.6 3.6 5.9 5.0 5.2 11.0 15.2 15.6 8.5 10.1 9.7 24.3 23.0 23.0 10.00 8.51 -1

Gazprom O/W 7.7 9.0 16 2.8 2.8 2.8 2.6 2.6 2.6 4.4 5.5 6.3 4.8 9.4 9.2 10.1 8.4 8.4 1.47 1.31 -6

Gazprom Neft O/W 18.4 25.0 36 2.9 3.0 3.1 3.3 3.0 3.2 5.4 (7.7) (0.0) 7.6 8.2 7.8 18.0 13.6 13.6 1.12 1.11 2

Lukoil O/W 58.3 74.0 27 2.9 2.9 3.1 4.0 3.9 4.2 0.5 2.0 0.5 5.8 6.7 7.7 13.2 10.1 10.1 14.70 13.74 0

Novatek O/W 114.4 140.0 22 10.7 8.2 7.2 11.5 9.0 8.2 3.0 4.7 5.7 2.6 3.3 3.1 24.0 24.7 24.7 1.00 0.89 0

Rosneft O/W 7.1 10.0 41 4.0 3.9 3.8 5.6 5.9 6.6 4.1 9.7 12.0 4.4 4.3 3.8 11.8 8.9 8.9 1.26 1.31 -2

Surgutneftegas U/W 7.7 9.6 25 (0.7) (0.7) (1.0) 5.4 5.4 5.4 17.2 9.4 13.0 2.5 2.5 2.5 16.2 15.2 15.2 0.14 0.16 4

Tatneft U/W 37.6 42.0 12 4.1 3.4 2.7 5.2 4.3 4.0 6.3 11.6 21 3.9 4.6 5.0 17.8 18.9 18.9 1.21 1.14 -1


Integrated - OtherPetrobras E/W 14.3 20.0 40 6.1 5.8 5.5 6.3 6.0 5.3 (20) (15) (10) 5.2 5.4 5.1 6.8 7.2 7.2 2.25 1.91 -9

Sasol E/W 463.1 430.0 (7) 8.1 7.7 6.7 10.0 9.5 8.4 4.2 4.8 6.5 3.4 3.7 4.0 24.0 23.2 23.2 46.54 45.19 2

Arithmetic average 16 7.1 6.7 6.1 8.1 7.7 6.9 (7.9) (4.9) (1.7) 4.3 4.5 4.6 15.4 15.2 15.2 -4

ServicesC.A.T. Oil E/W 13.1 8.0 (39) 7.6 6.7 5.4 3.8 2.9 2.2 0.2 0.2 0.5 0.0 0.0 0.0 8.6 12.3 12.3 0.72 0.77 4

COSL E/W 17.8 18.7 5 2.9 2.7 2.7 13.3 13.0 12.7 9 10 10 1.5 1.5 1.6 8.4 7.4 7.4 1.34 1.49 -1

Eurasia Drilling O/W 40.0 42.0 5 6.3 5.1 3.6 nm nm nm 8.3 10 13 0.0 0.0 0.0 20.7 18.0 18.0 3.66 2.99 -1

Integra O/W 10.8 4.5 (58) 11.4 9.0 7.5 0.3 0.2 0.1 4 6 8 0.0 0.0 0.0 15.5 21.8 21.8 0.37 -3.17 13

Arithmetic average (22) 7.0 5.9 4.8 5.8 5.3 5.0 5.5 6.6 7.9 0.4 0.4 0.4 13.3 14.9 14.9 4

Source: Company data, Datastream, Barclays Research - Price targets are based on a sum-of-the-parts based DCF methodology.

FCF yield, %Barclays

2013Cons 2013

RoACE, %EV:EBIDA, x P/E, x Dividend yield, %


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Valuations GEM


-202468

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02468

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P/E 2013 Average

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Free cash flow yield, % Gearing - Net Debt to Equity, % Datastream consensus e relative to Barclays EPS,%

-10-505

101520

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2012 2013

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Documents

Global Oil & Gas_130813_Barclays