Acergy S.A. (ADR) (ACGY)

oil will rise over the mid and long terms

Another oil player added to my portfolio. Going long on oil.

Obama says drill, I say ACGY

Beaten down too much. When the market picks up this should be back up.

Cheap according to my calculations.

Peak oil isn't going away. It is just being postponed for a few years. It was felt that growth in Russian supplies of petroleum were keeping pace with China's growing consumption. Then Russian production stopped growing -this more or less corresponds to the rapid rise in oil prices. Demand exceeded supply and demand for oil is inelastic. Small shortages lead to rapid price increases.

Russia needs to invest a lot more in its petroleum extraction infrastructure but with the price of oil falling from $140 to $70 Russia has less income. The Russian economy has been riding on a wave of oil revenues -to the extent that Putin felt he could walk back onto the world's big stage by invading Georgia and selling (giving?) missiles to Iran and Syria.

Russia is being devastated by the drop in oil prices. It seams unlikely that Putin will divert his ever scarcer foreign earnings to upgrade Russia's oil production capacity.

China and India are growing more slowly for a while but as long as the world continues to heat buildings with oil furnaces demand for oil is not on a long downward trend. Twice as much petroleum is used to heat buildings as is used to fuel automobiles.

Acergy has the kind of skill and technology that is very difficult to accumulate. It's business is healthy and its customers are wealthy cash rich oil companies. The current P/E suggests that the market thinks the company is dying. Comments abound regarding political resistance to drilling in coastal waters but this company's expertise is in bringing home oil from deep sea wells that are often far from shore.

My guess is that the continuing selloff is based on the assumption that oil isn't going to make any money during the recession so exploration will stop. The fact is that even the more exotic forms of oil production -like tar sands or coal to fuel are quite profitable at $70/bbl. If this is as bad as it is going to get then the oil industry is in good shape -the fact that the recent economic meltdown only brought oil down to $70/bbl is in an indication of how little cheap oil there is left and how much we continue to consume.

This is a bargain at $6. If it only doubles in value in 2 years I would be very surprised.

We are going to slam into the peak oil wall again soon and it will be a lot cheaper developing alternate supplies than trying to stabilize the middle east.

With a PEG of 0.22, a Pr/Sals of 0.50, a Price/Book of 1.5, a forward P/E of 4.9, and an ROE of +20%, this looks like a good investment to me; especially because of the demand for their products and services. sues2

JohnnyLC

Energy,solid Performer, undervalued

energy

Delays in contract awards? WHOOPS!

need more oil

Acery has renewed all their contracts and they have a great potential to sign new contracts with Petrobras, for instance, when they start working on the new reservers (ok, this is long term however ACGY is still recovering from a drop from a $30 some months ago, so it's still good for short - medium term)

Technical analysis also confirm that... (even though I'm not big fun of the charts).

LN

Oil, good value and effective market position.

With oil going sky high and with recent offshorre activities off the coast of West Africa, this company is heading for the tops. Also, all the contracts would make the stock price jump through the roofs.

Long term hold. Offshore oil more attractive and winning big bids by big players every month.

Technology is only going to demand more and more.

Contracts in 2008, especially in W. Africa, should get ACGY's margins closer perfect-executer, Technip.