Anadarko Petroleum: Moderate Potential Upside But Strong Growth Prospects
Caiman Valores • 10 Comments
Caiman Valores • 10 Comments
Today, 8:10 AM
- Exxon Mobil (NYSE:XOM) is in advanced negotiations with Eni (NYSE:E) over acquiring a minority stake in natural gas discoveries off Mozambique, Bloomberg reports.
- XOM also is in talks with Anadarko Petroleum (NYSE:APC) over acquiring a stake in the adjacent Area 1 in Mozambique’s offshore Rovuma Basin, according to the report.
- Exxon is already focused on Mozambique after winning three exploration licenses in October for offshore blocks to the south of the APC and Eni discoveries, and it has a working interest in Statoil’s Block 2 in Tanzania, north of the Rovuma Basin.
Yesterday, 11:59 AM
- Anadarko Petroleum (APC -1.8%) is maintained with a Buy rating with a $68 price target, raised from $67, at Goldman Sachs, after APC reported a smaller than expected Q2 loss aided by cost cuts.
- “Street concerns regarding consolidation, weak balance sheet, ability to sell assets, production mix, Permian impact, exploration potential and timing of development growth are overdone," Goldman's Paul Singer writes.
- APC's Permian and Gulf of Mexico update were positive, Singer says, with the company raising its 2016 production guidance by 1%, driven by higher than expected production growth in the two regions.
- APC also indicated that it had sold assets worth $2.5B through H1, with potential for further sales of $1B-plus, inspiring confidence that more manageable leverage "can open door for APC shares to trade at [a] greater multiple."
Tue, Jul. 26, 5:49 PM
- Anadarko Petroleum (NYSE:APC) is flat AH after posting a narrower than expected Q2 loss after cutting costs to cope with the oil industry downturn.
- APC says its Q2 costs fell 11.8% Y/Y, and has closed $2.5B in asset sales YTD with a target of $3.5B for the full year; the company also laid off 1,000 workers in March and previously cut its dividend.
- APC raises the mid-point of its FY 2016 sales volume forecast by 2M boe from a prior estimate of 282M-286M boe after adjusting for divestitures, citing record sales volumes from its Lucius and Caesar/Tonga fields in the Gulf of Mexico, as well as the improving well performance in the Delaware and DJ basins.
- "Should the commodity-price outlook continue to improve, we will evaluate redeploying some of the additional cash generated via operations and asset sales toward our highest-quality U.S. onshore opportunities," CEO Al Walker says.
Tue, Jul. 26, 4:09 PM
Mon, Jul. 25, 5:35 PM
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Thu, Jul. 21, 11:44 AM
- Samsung Heavy Industries (OTC:SMSHF) says it expects to receive an order this year from Eni (NYSE:E) to build a floating liquefied natural gas platform to process huge gas reserves in Mozambique, a sign a long-delayed project is moving ahead.
- Samsung Heavy is in exclusive talks with Eni as part of a consortium with France's Technip and Japan's JGC in a project worth ~$5.4B; Samsung's share would be worth $2.5B.
- Samsung's statement appears to open the door for Eni to make its final investment decision this year, which analysts say would make Anadarko Petroleum's (NYSE:APC) plans for a vast onshore development more likely to proceed.
Thu, Jul. 14, 5:57 PM
- Energy companies including Anadarko Petroleum (NYSE:APC), Noble Energy (NYSE:NBL), Whiting Petroleum (NYSE:WLL), DCP Midstream (NYSE:DPM) and Synergy Resources (NYSEMKT:SYRG) have donated millions of dollars to derail a push by Colorado environmentalists to place measures on November's election ballot that would stifle oil and gas drilling in the state, Reuters reports.
- Environmental groups are gathering signatures for two statewide initiatives that would transfer regulatory control of oil and gas development to local governments and create tougher setback requirements to keep oil and gas activities away from occupied structures.
- Opponents of the proposed ballot initiatives say they would seriously damage oil and gas exploration in Colorado, the seventh largest oil and gas producing state in the U.S.; a state agency tasked with encouraging energy development says 90% of surface acreage in Colorado would be unavailable for oil and gas development under the new setback laws.
Wed, Jul. 6, 10:05 AM
- Exxon Mobil (XOM -0.2%) and Qatar Petroleum are teaming up to evaluate gas fields in Mozambique owned by Anadarko Petroleum (APC +1.2%) and Eni (E -1.2%), Bloomberg reports.
- Investment from XOM and Qatar Petroleum, which have partnered in joint ventures for at least 15 years, would bring much needed funds for development and a tax windfall to Mozambique, which is trying to cope with a deepening debt crisis.
- XOM already has established a presence in Mozambique after winning three offshore exploration licenses in October for blocks to the south of the APC and Eni operations in the Rovuma Basin.
Sat, Jun. 25, 8:25 AM
- The U.S. currently pumps ~8.7M bbl/day of crude oil, 480K less than at the end of 2015, but more than 500K bbl/day of new crude from the Gulf of Mexico is set to come online this year and next, WSJ reports, threatening to prolong the oil glut and hold down prices.
- One reason is a handful of massive oil fields sanctioned for development years ago by companies such as BP and Freeport McMoRan (NYSE:FCX) that will start pumping later this year, but another is that companies have found that smaller satellite fields can be tapped inexpensively by tieback wells linked to existing offshore oil platforms via underwater pipelines.
- Exxon (NYSE:XOM) this year began pumping from the tieback Julia offshore well, with production piped back to a Chevron (NYSE:CVX) platform; CVX also recently executed a tieback that will produce 50% more oil and gas than it originally expected.
- Noble Energy (NYSE:NBL) nearly doubled its Gulf output in Q1 and has another well starting to pump later this summer; Anadarko (NYSE:APC) has more than 30 tieback well prospects in satellite fields, and will drill up to seven this year.
- Companies also are getting better at accessing deepwater finds; Shell (RDS.A, RDS.B) saved $1B drilling its Stones project, which will start up later this year, by using a slim-well design offshore engineers borrowed from onshore shale operations.
Fri, Jun. 10, 7:05 PM
- Western Colorado has 40x more natural gas than previously thought, potentially making it the second-largest formation in the U.S., according to a new estimate from the U.S. Geological Survey.
- The Mancos Shale formation in Colorado’s Piceance Basin holds ~66.3T cf of gas, up from just 1.6T estimated in 2003, the USGS says, and the revision puts the basin second only to the Marcellus Shale in terms of the largest total gas reserves in the U.S.
- Current prices of ~$2/MMBtu are considered too low for companies to begin drilling to any large extent; companies likely would begin drilling if prices reached $3.50/MMBtu, says David Ludlam of the West Slope Colorado Oil and Gas Association.
- Among Colorado's top current oil and gas producers: APC, NBL, ECA, XOM, CVX, OXY, WLL, BBG, SYRG, PDCE, BCEI, CRZO
Tue, May 24, 12:48 PM
- Anadarko Petroleum (APC +1.7%) is reaffirmed as a Focus List Buy at Argus, which says it likes the company's focus on higher margin liquids, cutting costs, selling non-core assets and improving well productivity.
- APC's "megaprojects" under development or in production in the Gulf of Mexico, Ghana and Mozambique, plus an onshore project in Algeria, which the firm expects will generate high returns on capital and strong free cash flow, with stable long-term production growth and low incremental operating and maintenance expenses.
- In addition to its successful exploration program and active portfolio management, APC boasts a strong balance sheet and adequate liquidity, and Argus believes the company's current asset portfolio and deepwater and exploration expertise may make it an attractive acquisition target for larger integrated firms.
Tue, May 17, 11:59 AM
- South Africa, seeking to reduce its dependence on coal-fired power, is creating a unit to import liquefied natural gas for power plants as suppliers including Cheniere Energy (LNG +1.9%) await fuel tenders for at least 3M tons in annual shipments.
- Bloomberg reports that Cheniere is among companies interested in supplying South Africa’s gas-to-power program, which plans to add 3,126 MW of capacity during 2019-25.
- The new government unit may consider regional gas supplies from Botswana and Mozambique, which expects Anadarko Petroleum (APC +1.8%) and Eni (E -1.1%) to make final investment decisions on LNG export projects later this year.
Tue, May 10, 5:35 PM
Wed, May 4, 3:23 PM
- Anadarko Petroleum (APC -6%) is sharply lower after shares are downgraded to Neutral at both Credit Suisse and BMO Capital, following its narrower than expected Q1 loss.
- Credit Suisse’s Edward Westlake sees limited upside to his $55 stock price target even though APC had managed its debt maturities well and has a large asset base; APC probably should be more assertively building cash as it is seven years into a business cycle, Westlake says, noting that the company has a large asset base - with footprints in the Marcellus, Eagle Ford, East Texas, Louisiana and Mozambique - from which to rebuild its cash position through disposals.
- BMO says its previous Outperform rating was based on APC's low maintenance capex, quality asset base, exploration optionality and valuation, factors which now are playing out; the firm maintains its $50 price target.
- Now read Reuters: Some U.S. energy CEOs ready for new drilling
Wed, May 4, 10:59 AM
- At least some U.S. oil executives say they are getting ready for new drilling projects, as crude prices rising to ~$45/bbl from nearly $25 since February leads them to believe the worst of the oil downturn may be over, according to a Reuters analysis.
- "The outlook for commodity prices is improving... Things look better today than they did 90 days ago," Anadarko Petroleum (APC -4.2%) CEO Al Walker said yesterday at his company's earnings conference call.
- Halliburton (HAL -2%) CEO Dave Lesar said yesterday in his company's earnings call that "We do think that potentially we'll see an upswing in the rig count in the back half of the year... When this thing snaps back, it's going to snap back hard."
- Pioneer Natural Resources (PXD -1.5%) said recently that it would add rigs if oil stays near or rises from $50/bbl, and Whiting Petroleum (WLL +0.6%) said it would soon frack 44 wells to bring them online, just weeks after saying it would freeze virtually all new work.
Tue, May 3, 3:28 PM
- Anadarko Petroleum (APC -3.7%) is sharply lower, along with nearly every oil and gas stock today, despite reporting a narrower than expected Q1 loss and saying its total costs in the quarter plunged 61%.
- APC also says it hit ~100 ft. of oil pay with its fifth well at the Paon discovery offshore Ivory Coast in the company's first ever deepwater horizontal well.
- Goldman Sachs maintains a Buy rating on APC while raising its stock price target to $60 from $58, saying growth in oil production at the Permian Basin is progressing on track even as costs decline, and although Q1 net debt was higher than expected because of one-time charges the company should be able to deleverage its balance sheet in Q2 following additional asset sales and tax benefits.
- Citigroup also keeps its Buy rating and raises its price target to $65 from $62, noting that APC's core DJ Basin holdings, particularly with its Land Grant acreage, are among the most economic North America oil resource plays.
- Deutsche Bank says operational execution continues to build momentum, although the firm continues to rate APC as a Hold with a $58 price target.
- Now read Anadarko Petroleum has Colombia exposure and solid exploration prospects
Anadarko Petroleum Corp. is an independent exploration and production company. Its asset portfolio includes positions in onshore resource plays in the Rocky Mountains region, the southern U. S. and the Appalachian basin. The company is also an independent producer in the deepwater Gulf of... More
Sector: Basic Materials
Industry: Independent Oil & Gas
Country: United States
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