Jefferies Energy Update (CLR, APC, COG)

Jefferies published its Energy Update today and noted that M&A could play a big role for selective shales in 2011.

In a note to clients, Jefferies writes, "While international M&A has been occurring for some time on 3P capture, such valuations have stopped at our borders. However, we sense a slight shift in the valuation approach of US E&P players to more in line with their international counterparts. Only inevitable as new resource capture becomes incrementally difficult. However, we do believe the M&A theme will be limited only to shale plays that are economic at the prevailing strip."

"Our top way to play this theme is Continental Resources (NYSE: CLR, $57.91, Buy) for the Bakken, Anadarko (NYSE: APC, $70.25, Buy) for Eagle Ford oil and Cabot (COG, $37.37, Buy) for Marcellus."