The 2013 All-America Research Team: Integrated Oil, No. 2: Douglas Leggate

Douglas Leggate advances from runner-up to reclaim the second-place spot he held two years ago.

Douglas Leggate
Bank of America Merrill Lynch

First-place appearances: 0

Total appearances: 6

Team debut: 2006

Douglas Leggate advances from runner-up to reclaim the second-place spot he held two years ago. He also earns a runner-up spot in Oil & Gas Exploration & Production. The Bank of America Merrill Lynch analyst believes that the sector is in the midst of a “huge transition,” wherein some of the larger names are morphing into pure-play exploration and production companies. This shift is “creating an enormous opportunity for investors and an enormous knowledge gap,” he contends. So “it’s important to identify the valuation gap, joining the dots between what the market’s prepared to value as an E&P company and is not valuing for the same assets held within a traditional integrated oil company.” Houston-based Leggate’s top picks are Anadarko Petroleum Corp., Hess Corp. and Occidental Petroleum Corp. Leggate thinks Anadarko, based in Woodlands, Texas, will start monetizing assets once it resolves legal issues related to the 2010 Deepwater Horizon oil spill. He credits Hess for “jettisoning noncore assets and realizing significant value for them” and expects the New York–based outfit to buy back 15 to 20 percent of its shares in the next year. Finally, Los Angeles–based Occidental is embarking on “a major restructuring, which is probably going to split the company into at least two and maybe three different parts,” he says. “The great things about Doug are his confidence and enthusiasm when articulating his high-conviction calls,” observes one grateful investor. — Carolyn Koo

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