Higher crude oil and natural gas prices and a 15% increase in production drove CNOOC Limited's (CEO) third-quarter results. The significant volume growth was due to two new projects that came on stream during the period. Despite the negative macro backdrop, CNOOC plans to stick to its original spending plans, providing strong support to its production growth profile. Our continued favorable view of CNOOC Ltd. shares reflects the company's positive production growth profile, exclusivity in the offshore China region, and LNG investments. We have lowered our estimates and price objective to reflect a lower commodity-price deck. We rate the shares a Buy. Based on most conventional valuation metrics, the ADRs are attractive here relative to the Chinese and other emerging market players. Our new $120 price objective, reduced from $155 before, is based on a 2009 P/E multiple of 9.3x, still at a

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Demand Softness and Storage Overhang Weigh on Natural Gas PricesFeatured in this post are these companies: Nabors (NBR), Patterson-UTI (PTEN), EnCana (ECA), EOG Resources (EOG), XTO Energy (XTO) and Chesapeake (CHK).In its weekly natural gas status report, the Energy Information Administration (EIA) reported yesterday that gas in storage totaled 3,167 billion cubic feet (Bcf) for the week ended December 12, 2008. This represents a net withdrawal of 124 Bcf from the preceding week, the largest this heating season, but modestly below the 128 Bcf withdrawn this week last year and on average over the last five years.Current storage levels are now 1.3% below last year's level, but still above the 5-year average by 3.7%. Colder than average weather prevailed in all regions east of the Rockies, helping increase heating-related consumption and playing a role in the sizable ...

Some of the valuations in today’s market are absurd, says Chris Mayer. Though market volatility means high risks in the short-term, now is the time to “plant the seeds of monster future returns.” Chris picks four deep value stocks with big upside potential.

This from The Rude Awakening:

The panic in this market is incredible. It’s leading to some absurd valuations. Particularly among the smaller-cap stocks. These stocks have really been hit hard because they have less liquidity than large cap stocks.

When waves of selling sweep through the stock market, they might rock a large cap stock from stem to stern. But the same waves will capsize a small cap stock. So the conditions in the financial markets are very scary right now for any investor who’s holding small-cap resource stocks. But unless we slip into some global depression, these stocks will come back - and

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The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell-off has by all measures been overdone.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub-sectors very compelling, in our view. Our best ideas are in the integrated, oilfield service and offshore drilling sub-sectors.

* While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels. * We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of

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For Russia lately, when it rains it pours. Not only have plummeting oil prices destroyed the country’s economy, but virtually nobody paid attention to its semi-aggressive war games last month. Even worse, Putin swears he will not be running for president anytime soon. Ford, Volkswagen and Renault are cutting their Russian production. And now the country’s currency gets a public smack in the face.

There is no doubt, the country will be glad to see 2008 come to an end.

Out of all of the horrific economic events taking place in Russia these days, none is more intriguing than Standard & Poor’s move it made earlier today. The company cut Moscow’s debt rating to just two notches above the dreaded “junk” status.

Thanks to a huge outflow of cash from Russia’s once-monumental reserves, the country’s debt is starting to join the ranks of failing companies like Ford (NYSE:F) and General Motors

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The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell-off has by all measures been overdone.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub-sectors very compelling, in our view. Our best ideas are in the integrated, oilfield service and offshore drilling sub-sectors.

While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels. We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of room to go. The large-cap ...

A favorable macro backdrop helped Exxon Mobil Corp. (XOM) achieve impressive year-over-year earnings growth in the third quarter, offsetting the effects of production declines and hurricanes.

Upstream income jumped 48% to $9.35 billion on the back of high realized crude oil and natural gas prices. We believe that despite recent volatility in the commodity and credit markets, the fundamentals of Exxon's business remain strong. As such, our Buy recommendation remains unchanged, though we have lowered our estimates to reflect a lower commodity-price deck.

Exxon Mobil shares have outperformed the peer group as well as the broader equity markets in the current market turmoil owing to its status as a defensive play in turbulent times. Historically, the stock has traded at a premium to its super-major peers, reflecting its industry-leading returns, financial strength, and a highly regarded management team. Our new $100 price objective, reduced from $105 before, reflects a 2009

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Georgia Gulf (GGC) is a leading North American manufacturer and marketer of two integrated chemical product lines, chlorovinyls and aromatics. The company is suffering from potentially overpaying for Royal Plastics, a company that makes vinyl-based housing products. The $1.5 billion acquisition resulted in an equal increase in debt. The company recently renegotiated its debt compliance (leverage and interest coverage) ratios, as the company is in danger of non-compliance.Also, Georgia Gulf saw high production cost due to volatile energy prices. The company was unable to recover costs by increasing prices of its products. Prices for natural gas (the key input) are increasing, which is negating the impact of product price increases. This has compressed margins for the company. Natural gas prices are expected to rise further, stemming from strong US consumption, low inventory, and limited drilling activity.Georgia Gulf's end markets are primarily housing related. Until ...

Following yesterday's discussion about the coal industry, where stock pullbacks seemed more or less undeserved, today we look at the oil and gas sector with Zacks senior analyst Sheraz Mian. With the price of a barrel of oil pulling back drastically, does this warrant the significantly lower oil prices?

With oil prices headed to roughly half what they were just a few months ago, how has this affected oil companies under your coverage?

The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell off has by all measures been over-done.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub sectors very compelling, in our view. Our

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Blue Ridge CapitalBlue Ridge Capital | John A. Griffin Holdings AnalysisThis post is being written as part of my Investment Securities Tool which analyzes the holdings of hedge fund managers.Blue Ridge Capital is ran by John A. Griffin. Griffin is similar to Steve Mandel at Lone Pine Capital and Lee Ainslie at Maverick Capital in that they all are 'Tiger Cubs' (a.k.a. pupils of Julian Robertson while at Tiger Management). Griffin though, is more well known because he was Julian Robertson's right hand man. So, needless to say, the dude knows his stuff. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies who have fundamental problems. And, right off the bat that presents us with a bit ...