Energy Sector

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Energy Sector

• SIM Stock Presentation
• Yenfrino Gunadi
• Drew H Harrison
• Vishal Hiranandani

November 27th, 2007
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Sector Presentation Highlights

• We believe
• The total return of the SP-10 will keep
  increasing because of the crude oil prices
• If an increase in energy prices crowds-out the
  rest of the economy, increasing the weight in
  SP-10 will act as a hedge in the portfolio
• Negligible Demand Destruction in short-term
• We recommended to increase our current weight by
  300 bp

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Portfolio Statistics

• Weight Recommendation
• SP 500 11.75
• SIM - 8.43
• Underweight 332 bp
• Stock Recommendation
• BTU (Peabody) 2.15
• BP (BP plc) 4.28
• WFT (Weatherford) 2.00

• Current Weight
• SP 500 11.75
• SIM - 6.43
• Underweight 532 bp
• Current Stock
• BTU (Peabody) 2.15
• BP (BP plc) 4.28

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Target Prices Expected Value
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Peabody - Hold
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BP plc - Hold
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Weatherford International

• Provider of equipment and service used for
  drilling, evaluation, completion and production,
  and intervention of oil and natural gas wells.
• Product lines 10
• No. of countries 108
• Employees 33,646
• of employees outside US 70
• Manufacturing Facilities 85

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Market Position Dominance
Source company website
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Sales Diversified
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Absolute Valuations
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Relative Valuations SP-10
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Key Factors
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Analyst Opinions Ratings

• Calyon Securities TP- 76
• Credit Suisse TP - 82
• Thompson TP - 78.81
• Bloomberg TP - 76.53
• Reuters Ratings 2.09

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Key Factors

• Very diversified
• Oil Production on the rise
• Cheap v. SP-10
• Good stock to buy based on the analysts

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Questions?