Credit Suisse (NYSE:CS) slashed earnings estimates on a number of oil and gas producers, basing their decision on lower price expectations for oil and gas in 2011.
For the overall average price of oil, Credit Suisse is looking at $72.50 a barrel next year. For gas, CS sees the price in a range dropping from their prior $6.50 down to $5.25 per million BTUs. Long term they see the top number remaining viable.
For ConocoPhillips (NYSE:COP), earnings per share was downwardly revised from $6.57 to $5.36, while Exxon was cut from $6.29 to $5.47 for 2011.
Some companies they like, especially because of new exploration projects, are Hess (NYSE:HES), Bunge Limited (NYSE:BG) and Marathon Oil (NYSE:MRO). The idea is this will help them stand out from their competitors.
Another idea from Credit Suisse is the large oil companies need to increase their dividends in order to attract more investors, as it would confirm management is confident about the future cash flows.
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