Anadarko Petroleum: Moderate Potential Upside But Strong Growth Prospects
Caiman Valores • 10 Comments
Caiman Valores • 10 Comments
Nov. 18, 2015, 12:58 PM
- Two planned crude and condensate pipelines serving the DJ Basin in Colorado are merging into a single project, FuelFix reports.
- The merger brings together the 200K bbl/day Saddlehorn Pipeline and the 130K bbl/day Grand Mesa Pipeline into a single 340K bbl/day pipeline running from Colorado to the Cushing, Okla., hub more than 550 miles away.
- Saddlehorn is a joint venture owned by Magellan Midstream Partners (MMP -0.8%) and Plains All American Pipeline (PAA -3.2%), each with 40% stakes, and Anadarko Petroleum (APC -0.5%) with 20%; Grand Mesa is 100% owned by NGL Energy Partners (NGL +5.9%).
- Each company will own the capacity it is bringing to the combined pipeline, with Saddlehorn owning 190K bbl/day and Grand Mesa owning the remaining 150K; MMP will head construction and operation of the pipeline.
Nov. 17, 2015, 10:58 AM
- Apache's (APA -0.1%) asset base does not warrant a premium and the company is unlikely to be taken over, even after its recent rejection of an offer from Anadarko Petroleum (APC -1.1%), Canaccord analyst Sam Burwell says.
- The analyst says that while APA has one of the largest leaseholds in the Permian basin, not much of it is in good areas, and APA's remaining asset base in Mid-Continent, non-core Eagle Ford, Canada, Egypt and North Sea also is not very significant.
- Burwell says APC's offer was based on the belief that APA was close to fairly priced at the prevailing $25B enterprise value, and APA's rejection suggests that bid-ask spreads remain wide for corporate M&A.
Nov. 16, 2015, 11:48 AM
- Apache (APA -0.2%) and Anadarko Petroleum (APC +0.3%), whose brief merger possibilities broke apart last week, are run by CEOs with smaller golden parachutes than similar-sized oil and gas companies, according to a Bloomberg analysis.
- The dollar incentive for takeovers for APA CEO John Christmann was $8.4M as of the company’s fiscal year-end when he was COO, and APC CEO Al Walker’s was $31.2M at year-end 2014, regulatory filings show; by comparison, Cheniere Energy (LNG +5.9%) CEO Charif Souki has a $147.8M payout, the highest of 83 U.S. oil and gas companies with a market value less than $45B as of their fiscal year-end.
- According to the Bloomberg report, among companies with the smallest golden parachute for its CEO is SM Energy (SM +1.5%), whose payout for Javan Ottoson would be $1.26M as of Dec. 31, 2014, when he was COO.
- The biggest parachute relative to company size is the $36.2M that would be due to Energy XXI (EXXI +0.6%) CEO John Schiller Jr., whose award was equal to ~15% of the company’s $249M market cap at its June 30 fiscal year-end.
Nov. 13, 2015, 11:57 AM
- Anadarko Petroleum (APC +2.5%) is upgraded to Focus Stock from Outperform with a $93 price target at Scotia Howard Weil, citing APC's penchant to divest and acquire at opportune times with one of the most capable managements in the business.
- Weil expects APC's onshore portfolio may decline slightly, but only because of management's discretion not to grow in a challenging crude environment.
- APC holds a resilient portfolio with the Wattenberg and Permian likely to encapsulate most of 2016's onshore budget, the firm adds.
Nov. 11, 2015, 12:21 PM
- Investors are dumping Apache (APA -6.6%) shares after Anadarko Petroleum (APC -4.1%) withdrew its takeover bid for the company, but Oppenheimer analyst Chris Kotowski says the two companies were “not a good fit.”
- "Many investors believe APC’s pre-emptive action was in self defense to make it more difficult for a potential buyer to make a bid... [but] we do not think the combination of APC and APA would be a good fit that would create value for their shareholders, and our view was reflected by the market reaction," Kotowski writes.
- RBC analyst Leo Mariani says APA is undervalued and has a strong enough balance sheet to wait out the current weakness in oil prices.
Nov. 11, 2015, 8:40 AM
- Anadarko Petroleum (NYSE:APC) issues a statement confirming it recently sent Apache (NYSE:APA) a non-binding offer to acquire the company.
- APC says its attempts to explore the merits of a potential deal were "summarily rejected and no discussions of substance occurred... based on our analysis, which shows that Apache appears to trade at or near full value currently, the offer was withdrawn."
- APC +3.2% premarket after falling 6.6% yesterday as word of the offer leaked; APA -6.8% premarket.
Nov. 10, 2015, 12:42 PM
- Anadarko Petroleum (APC -6%) plunges following a Bloomberg report that it approached Apache (APA -2.9%) about a possible takeover.
- APA reportedly rejected an initial proposal from APC and is working with Goldman Sachs to advise on its options; it is not clear whether talks will resume, other bidders may emerge, or APC will walk away.
- Bloomberg wrote over the weekend that APA had rejected an unsolicited takeover approach from an unidentified party.
Nov. 3, 2015, 4:46 PM
- Anadarko Petroleum (NYSE:APC) declares $0.27/share quarterly dividend, in line with previous.
- Forward yield 1.53%
- Payable Dec. 23; for shareholders of record Dec. 9; ex-div Dec. 7.
Oct. 29, 2015, 12:19 PM
- Anadarko Petroleum (APC +3.5%) is downgraded to Perform from Outperform at Oppenheimer, which foresees continued losses and cash flow deficits in a sub-$70 oil price environment.
- Analyst Fadel Gheit believes APC will continue to incur losses and cash flow deficits despite cost savings and efficiency improvements if oil prices remain below $70/bbl.
- Gheit says APC intentionally deferred the completion of nearly 200 wells through Q3 while planning to exit 2015 with 175-225 intentionally drilled uncompleted wells.
- Earlier: Anadarko posts huge but expected Q3 loss, shares down slightly (Oct. 27)
Oct. 28, 2015, 11:56 AM
- Anadarko Petroleum (APC +1.9%) Chairman, President and CEO Al Walker says the company will not try to expand beyond its existing oil fields until it becomes profitable to do so, which may not happen for a while as crude prices remain weak.
- "Growth will not be rewarded in this environment, and focusing on building and preserving value is more important at this time,” Walker tells investors in the morning's earnings conference call.
- "When we see value in pursuing growth, we’ll be prepared to accelerate activity,” the CEO said, adding that APC expects to keep capex in line with cash flow next year and will keep its focus on cutting costs, moderating decline rates at its oil fields, and drilling more efficiently.
- Walker also says drilling efficiencies have made APC's fields in west Texas competitive with its core Wattenberg field in Colorado, as the company has been able to save $1M per well after it improved how it designed its wellbores.
- Earlier: Anadarko posts huge but expected Q3 loss, shares down slightly
Oct. 27, 2015, 6:44 PM
- Anadarko Petroleum (NYSE:APC) -0.4% AH after reporting a Q3 loss that met Wall Street expectations as total revenue, which includes gains and losses on divestitures, sank to $1.69B from $5.01B a year ago.
- APC lost $2.24B in its Q3 before $2.6B in impairments on the value of its oil producing properties and exploration assets; a year ago, APC earned $1.1B in profits, before the crude oil price collapse.
- In its key Wattenberg field in Colorado, APC says it has cut drilling costs per foot by 15% and reduced drilling times by 20%, and has focused on improving how much oil and gas it can extract; in west Texas, APC’s Wolfcamp Shale wells have started to bring up 1M boe/well, which on average cost ~$7.5M to drill and complete and the company believes it can bring the cost down by $1.5M-$2M/well.
- APC says Q3 total sales volumes of oil and gas averaged 787K boe/day, down from 849K boe/day in the year-ago period.
- Also says its appraisal of the giant Shenandoah discovery in the deepwater Gulf of Mexico was successful, paving the way for large-scale development.
Oct. 27, 2015, 4:17 PM
- Anadarko Petroleum (NYSE:APC): Q3 EPS of -$0.72 beats by $0.01.
- Revenue of $1.7B (-66.1% Y/Y) misses by $610M.
Oct. 26, 2015, 5:35 PM
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Oct. 8, 2015, 1:57 PM
- Oppenheimer energy analysts expect just one of the 15 pure-play E&P companies it covers to report positive EPS in Q3, just two to post positive EPS in Q4, and only two to finish in the green for 2016.
- Devon Energy (DVN +1.5%) is the only large E&P Oppenheimer expects to post a profit in Q3 and one of only two, along with Range Resources (RRC +1.5%), seen recording a profit in Q4.
- The firm sees Anadarko Petroleum (APC +2.4%), Hess (HES +4.1%) and Murphy Oil (MUR +3.5%) as the hardest hit stocks in Q3, forecasting respective EPS losses of $0.76, $0.91 and $1.13.
- Oppenheimer projects only ConocoPhillips (COP +1.2%) and Occidental Petroleum (OXY +1.9%) coming through with a profit for full-year 2016.
Sep. 28, 2015, 7:02 PM
- Wolfe Research's Paul Sankey says he is bracing for some ugly Q3 earnings reports among oil and gas producers and a soft environment well into 2016, arguing that with oil prices stuck ~$45/bbl for West Texas crude, "there is real bankruptcy risk for probably one-quarter of the U.S. oil industry.”
- The analyst advises clients to stick with quality companies that can weather a prolonged stretch of soft prices, which means larger independent producers such as EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Chevron (NYSE:CVX) among the majors.
- Sankey says “all will be fine in due course,” although the next 6-12 months could be “tough sledding” for their businesses.
- Sankey likes a number of refiners, who will benefit from cheap crude oil, including Valero Energy (NYSE:VLO), Marathon Oil (NYSE:MRO), Western Refining (NYSE:WNR) and HollyFrontier (NYSE:HFC).
Sep. 4, 2015, 6:45 PM
- The Morgan Stanley commodity team lowers its crude oil price estimates, forecasting WTI at $51.07/bbl at the end of 2015, $56.45 at the end of 2016 and $60 at the end of 2017; the group had foreseen a 2017 price of $80.
- At the firm's recent Houston Energy Summit, EOG Resources (NYSE:EOG) was considered the most bullish in terms of expectations for oil prices, expecting "U.S. production to come off 100Mbld per month in year end" for a total decline from a peak of 700M bbl/day at year-end.
- Many other companies in attendance, including Anadarko Petroleum (NYSE:APC) and Apache (NYSE:APA), expect a more modest pickup in crude prices.
- Of all the companies in its coverage universe, Stanley sees InterOil (NYSE:IOC), Marathon Oil (NYSE:MRO) and Devon Energy (NYSE:DVN) as offering the highest upside to its price target.
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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