Tuesday, June 4, 2013

Investopedia: Statoil's Turnaround Proceeding Much Too Slowly

I bought Statoil (NYSE:STO) on the idea that this Norwegian energy giant was troubled, but that it would get its house back in order and deliver on its strong legacy of profitably developing energy reserves in challenging locations. So far, not so good. Statoil is one of the worst-performing energy majors over the past year, rising about 3% while Chevron (NYSE:CVX) has risen 29% and Exxon Mobil (NYSE:XOM), Total (NYSE:TOT), BP (NYSE:BP) are all up about 18%.

Statoil continues to struggle to keep a handle on production costs, and unplanned outages have wrecked havoc with a relatively fixed operating expense structure. Though I still believe that Statoil can do better, and is significantly undervalued on that basis, it's getting harder and harder to stay patient with the stock.

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