Summary
- Continuing my potential M&A analysis of domestic O&G producers, today, I compare two of America's best: EOG and ConocoPhillips.
- From a high-level perspective, it is clear that EOG is valued at a significant premium as compared to COP.
- Yet COP realizes ~$8/boe higher pricing due to its conventional assets in places like Alaska and Australia (to name just two).
- Meantime, COP generated more than 3x the FCF as compared to EOG, and production is only 1.7x higher.
- In my opinion, EOG is overvalued, and COP significantly undervalued - especially when compared to EOG.
EOG Resources (EOG) is generally considered to be at or near the top of the Lower-48 shale players. I agree, and in light of the recent Chevron (CVX) agreement to purchase Anadarko (APC), today, we'll compare EOG versus another top-tier E&P - ConocoPhillips (COP) - with respect to a potential takeover M&A target for a large integrated oil major (Exxon Mobil (XOM), for example).
To start with, here is a table comparing the high-level metrics of ConocoPhillips (taken from the recent Seeking Alpha article COP: A Major M&A Target) with those of EOG:
