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Sterne Agee Managing Director Michael McAllister on why he believes now is the time to invest in oil, despite recent market risk.
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-- this month -- energy analyst Michael McCallister the managing director of starting to He says that this is a great time to invest.
In a few.
Particular energy companies if you can stomach the -- great to see you.
I hate when while I'm watching this and and it's been so hard to anticipate -- the oil markets are going because sometimes it's fundamentals and other times it's just a fear factor or something -- that is the sort of a more for us you can't you can't.
Put -- shake to it but.
Why do you believe that there's more opportunity right now and that their names to get into.
Well you know this -- we saw a lot of stocks good analyzed.
And that look like the price of oil was about 65 dollars according to stocks so.
You know people got a little spooked out and we -- decided -- let's look at companies that -- are you know very diversified.
More international therefore they're more.
Levered to the Brent price which is obviously higher in -- seems to be much more robust.
Yes spread by the way today is a 114.
And on your screen you see there 87 so there is certainly a spread but let's get to these names -- Anadarko Petroleum.
Anadarko Petroleum is you know a very large AMP company and it does have risk that can't deny that and however they've taken a very robust plan position taken the cash flows from it and has executed incredibly.
Impressive offshore exploration program off of West Africa as well as East Africa so international what's impressive about Apache -- Apache is kind of more of a grinder -- their business models they buy assets from majors that have kind of forgotten them and they take the Apache model and then they developed and we see production growth for the next probably 45 years at 6% 14%.
It's down 15% so you wouldn't be buying high that's good noble energy and noble of course has has an opportunity in Israel right now little bit of a yield one proceed.
Little bit -- yield I don't know if anybody's really investing for that.
These stocks you kind of are investing for value either by growing production or reserves.
Noble is my top pick.
Similar to Anadarko they have a very good land position where they've taken -- cash flows and have applied it to an international offshore program.
Exploration program.
The big catalyst for me is right now they're -- the well offshore Cyprus which could be huge.
It could be you know and she kind of type.
Situation.
They've had she's major success is off of Israel you see a lot of Saber allying with Turkey in this particular well.
There's political rest of not going to deny always track but cypress is an EU nation and I believe that if they it is a discovery always -- Mike McCallister -- -- -- thank you you know getting ahead of this possibly if oil goes higher but also all of the other energy pieces they're thank you so much for joining.
