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Fly News Breaks for December 10, 2019
WPX, PXD, PE, FANG, EOG, CXO, VET, HES, DVN
Dec 10, 2019 | 07:54 EDT
JPMorgan analyst Arun Jayaram is more sanguine on the Exploration & Production sector heading into 2020. The transition to free cash flow that began in 2019 should support better free cash flow metrics and cash return given efficiency gains and oilfield services deflation, Jayaram tells investors in a research note. Further, U.S. shale growth is poised to disappoint, which could lift the back end of the curve, a key for new money entering the space, adds the analyst. As part of his 2020 outlook, Jayaram upgraded Devon Energy (DVN) to Overweight from Neutral and Hess Corp. (HES) to Neutral from Underweight. He also downgraded Vermilion Energy (VET) to Neutral Overweight saying he sees a smaller margin of error for the company. The analyst reshuffled his ratings to more appropriately position his estimates and ratings distribution. His top picks include Cabot Oil & Gas (COG), Concho Resources (CXO), Devon, EOG Resources (EOG), Diamondback Energy (FANG), Parsley Energy (PE), Pioneer Natural (PXD) and WPX Energy (WPX).