The document discusses the relative value emerging in the Lower Quality Oily group after a year of underperformance, driven by factors such as potential market rebalancing and improved capex efficiency. It highlights the preference for names like WPX and OAS due to their growth-FCF equations. The document also expresses a neutral stance on Higher Quality gassy names, noting that current trading levels compensate for higher risk. It discusses the hedging status of oily names, with an average hedge ratio of 44% for FY 18E production, and anticipates an increase in liquids hedge ratio by the next earnings updates.
doj/DataSet10/EFTA01385335.pdf
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