Anadarko Petroleum: Moderate Potential Upside But Strong Growth Prospects
Caiman Valores • 10 Comments
Caiman Valores • 10 Comments
Aug. 13, 2015, 7:27 PM
- Oil companies are bracing for "lower for longer” prices as a global supply glut persists, dragging U.S. crude to the lowest close since March 2009 at just above $42/bbl.
- More capitulation notes are out; Oppenheimer's Fadel Gheit wrote today that the "new normal" for oil in a recovery would be $65-$75, and that "the vast majority of oil companies are living beyond their means, with operating cash flow falling short of capital investments and dividend... Unless oil prices rebound significantly above future strip prices, oil stocks could sink further, as takeover premiums shrink with potential sellers significantly outnumbering potential buyers."
- The world’s biggest producers will need to trim investments by another $26B, Jefferies believes; capital spending will have to fall 10% next year, according to Banco Santander.
- CNBC's Bob Pisani says when energy stocks staged a brief bounce recently, investors repeated a frequent mistake: They tried to buy oil stocks ahead of a recovery in crude oil, instead of the other way around.
- The result today was heavy losses for many of the sector's big names: CHK -6.6%, MRO -5.4%, COP -2.8%, APC -2.4%, SWN -4.2%, RRC -4.4%, RIG -6.5%, DVN -3.9%, APA -2.6%, BHI -2.9%, CAM -3.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXI, FIF, PXJ, NDP, RYE, FXN, DDG
Aug. 12, 2015, 8:09 AM
- Mozambique names deputy trade minister Omar Mitha as new chairman of the state oil company, months before decisions are due on projects that could make the country the world’s third-biggest liquefied natural gas exporter.
- Anadarko Petroleum (NYSE:APC), which has said it targets a final decision on whether to develop a project in the country before year-end, estimates it has 100T cf of gas in its offshore concession.
- Eni (NYSE:E) has the rights to a neighboring resource and is working with APC to develop the infrastructure needed for gas liquefaction.
- Mitha is a native of Cabo Delgado, the province where the APC and Eni projects are located.
Aug. 4, 2015, 3:28 PM
- Anadarko Petroleum (NYSE:APC) declares $0.27/share quarterly dividend, in line with previous.
- Forward yield 1.45%
- Payable Sept. 23; for shareholders of record Sept. 9; ex-div Sept. 4.
Jul. 29, 2015, 2:49 PM
- Anadarko Petroleum (APC +4.8%) pushes to strong gains a day after reporting an unexpected Q2 profit by boosting oil production but keeping operating costs low.
- All of APC’s large projects are advancing, and "new discoveries, which will likely be unappreciated in this market, should add long-term value, all else being equal,” says Stifel analyst Michael Scialla.
- CEO Al Walker noted in today's earnings conference call that oil prices have fallen faster than service costs in places such as the Wattenberg field in Colorado, one of APC's major regions, but even an increase in crude prices might not bring the company back to into expansion mode because margins - not top-line revenue growth - are most important.
- Case in point: The cost to bring a well into production has fallen by ~45% this year in the Wattenberg, as drilling costs in the area have fallen below $1M per well, meaning APC will be able to drill 70 wells in the area this year vs. 35 last year.
- APC says the Delaware Basin in west Texas has offered up similar efficiencies, and the company plans to bring an eighth drilling rig into the region and is considering a ninth, as costs have come down by ~$1M per well.
Jul. 28, 2015, 5:28 PM
- Anadarko Petroleum (NYSE:APC) -1.1% AH after reporting better than expected Q2 earnings but revenues fell 40% Y/Y to $2.64B from $4.44B a year ago.
- APC says improved drilling practices and ongoing operating efficiencies helped deliver more than 18K bbl/day of higher-margin oil sales volumes above its guidance during Q2.
- Following Q2 production of 77M boe (846K boe/day), APC says it is adjusting its FY 2015 sales volumes to 298M-302M boe (816K-827K boe/day), and sees Q3 total sales volumes of 71M-73M boe (772K-793K boe/day).
- Improved efficiencies have allowed APC to increase its production by 13%, or 35K bbl/day of oil a day this year, CEO Al Walker, which is “enhancing our relative cash margins and enabling us to drill more than 100 additional wells this year, all while staying within our capital guidance.”
- APC also says its liquefied natural gas project in Mozambique continues to advance, and contractors have been chosen for initial development of onshore facilities.
Jul. 28, 2015, 4:20 PM
- Anadarko Petroleum (NYSE:APC): Q2 EPS of $0.01 beats by $0.52.
- Revenue of $2.64B (-40.5% Y/Y) misses by $20M.
- Shares -1.2%.
Jul. 27, 2015, 5:35 PM
- AFL, AIZ, AJG, AKAM, APC, ARI, ATML, ATR, ATRC, AXS, BBRG, BGFV, BLDP, BMR, BOOM, BWLD, BXMT, CALX, CAP, CEB, CHRW, CINF, CLMS, CTXS, CUZ, DHT, EEFT, EQR, ESRX, ETH, EW, EXAC, EXAM, GAS, GCA, GILD, GPRE, HA, HT, HURN, IACI, IPHI, KIM, LNDC, MTSI, NATI, NCR, NEU, NGD, NUVA, NVDQ, NVMI, OIS, PEI, PNRA, RGR, RNR, RPXC, RRC, RSYS, RUBI, SLCA, SM, SPWR, SSW, TSS, TWTR, ULTI, VDSI, VR, VRSK, VRTU, WNC, WRI, WSH, X, YELP
Jul. 22, 2015, 2:37 PM
- A reduction in non-OPEC production eventually will provide an opportunity for U.S. producers to get back in the game, Credit Suisse analyst Mark Lear says as he upgrades the oil and gas E&P sector to Overweight and changes ratings for several individual stocks.
- Lear sees a handful of names with limited downside at WTI prices of ~$60/bbl and “decent” upside with prices in the $70’s, and expects a better year for natural gas in 2016 as dropoffs in production and higher demand could lead to higher winter prices.
- "We may be early,” but Credit Suisse assumes coverage at Outperform on some E&P stocks: EOG, EPE, PXD, DNR, APC, DVN.
- Upgraded to Outperform from Neutral: HES, CXO, CRZO, NBL
- Upgraded to Neutral from Underperform: MUR.
- Assumed coverage at Neutral: APA, DNR
- Assumed at Underperform: SD, SWN
- Downgraded to Underperform from Neutral: REXX, CRK
Jul. 16, 2015, 2:57 PM
- Global oil majors have $150B of firepower than can be used for M&A and have the ability to defer another $325B in capex on marginal projects; with so much cash available for potential deals and up to 15M bbl/day of production potentially available for purchase, Goldman Sachs analyst Ruth Brooker sees a pickup in M&A activity in the oil and gas space coming soon.
- The firm thinks shale production has the potential to double by 2025, and Brooker argues majors likely will take the current opportunity to increase their exposure to U.S. shale at historically low prices.
- Goldman sees seven companies as most likely to draw buyout attention from the majors: EOG, PXD, CLR, COG, NBL, APC, RRC.
Jul. 8, 2015, 3:49 PM
- The U.S. E&P industry is "between a rock and a hard place" entering earnings season, Deutsche Bank says, expecting continued headwinds for the group; while momentum has been building for moderate acceleration in activity levels in H2, macro concerns from China to Greece have weighed on crude prices and introduced an “additional layer of uncertainty.”
- Among the major integrated oils, the firm prefers EOG Resources (EOG -2.5%) and Anadarko Petroleum (APC -2.8%) into Q2 results but cuts its stock price target for Marathon Petroleum (MPC -2.6%) in half to $62.
- U.S. refiners, on the other hand, continue to defy fears of a collapse in margins, with demand strength and robust gasoline cracks again driving upside to earnings estimates; the firm sees 7% upside on average to current Q2 estimates for the group, with particular strength from Tesoro (TSO -1.2%), Valero (VLO -0.9%) and HollyFrontier (HFC -1.4%).
Jul. 7, 2015, 11:49 AM
- Jefferies upgrades its ratings on Anadarko Petroleum (APC +0.3%), EOG Resources (EOG -0.1%) and Noble Energy (NBL -1.5%), citing “more realistic embedded oil price and growth.”
- APC is lifted to Buy from Hold with an $88 price target, raised from $85, as the firm notes increased confidence in “a deep, future Delaware Basin (Wolfcamp) development, the potential for opportunistic monetizations (i.e., Mozambique, WGP shares) and a now more attractive valuation.”
- EOG and NBL are raised to Hold from Underperform following recent pressure on the shares, which now better reflect “a slower ramp.”
Jul. 6, 2015, 4:39 PM
- Legacy Reserves (NASDAQ:LGCY) says it reached agreements with affiliates of Anadarko Petroleum (NYSE:APC) and Western Gas Partners (NYSE:WES) to purchase natural gas properties and gathering and processing assets in east Texas for a combined $440M.
- LGCY estimates proved reserves from the assets of ~420B cfe, all natural gas with 95% classified as proved developed producing and 95% are operated; it projects Q3 production would increase by ~70M cfe/day.
- LGCY also says TPG Special Situations Partners agrees to fund horizontal development of certain of LGCY's Spraberry, Wolfcamp and Bone Spring rights in the Permian Basin.
- TGP initially commits $150M to fund the first tranche which, based on LGCY's anticipated 2-3 rig drilling program, will take about one year; it initially will control an 87.5% stake of LGCY’s working interest in the oil and gas properties in exchange for covering 95% of the costs related to drilling and completion.
Jun. 29, 2015, 10:14 AM
- The U.S. Supreme Court turns down appeals from BP (BP -0.9%) and Anadarko Petroleum (APC -1.4%) over Clean Water Act fines related to the 2010 Gulf of Mexico oil spill.
- The Court let stand a lower court ruling that said the owners of the blown-out Macondo well could not avoid federal fines for the spill by blaming another company's failed equipment.
- The companies argued that oil had not leaked from a well they co-owned, but from a broken underwater pipe owned by Transocean (RIG -0.4%).
Jun. 25, 2015, 11:39 AM
- Anadarko Petroleum (APC +0.2%) is in talks with newly formed Japanese joint venture vehicle Jera, set to become the world's biggest buyer of liquefied natural gas, to sell long-term supply from its Mozambique export scheme, Reuters reports.
- APC's gas finds in Area 1 of Mozambique's Rovuma Basin will feed the initial $23B 10M metric tons/year export project, which is due to start by 2021.
- Last year, APC had allotted two-thirds of the capacity of its planned Mozambique LNG project, but needed more before taking a final investment decision, which is still pending.
Jun. 16, 2015, 5:45 PM
- The strained finances at U.S. E&P shale companies caused by collapsing crude oil prices is well known, and some analysts say the pain may be compounded by a steep drop in prices for natural gas liquids caused by oversupply, partly due to infrastructure constraints.
- SM Energy (NYSE:SM) said yesterday the price it is receiving for NGLs at the Mont Belvieu delivery point fell 36% Q/Q to $16.67/bbl and that the price declines would lower its 2015 total budgeted revenue by ~$25M while not affecting its drilling or production.
- Barclays recently said Chesapeake Energy (NYSE:CHK) could see 2016 cash flow cut by up to 3% if NGL price weakness persists, while Range Resources (NYSE:RRC) may see its cash flow cut by up to 5%; APC, DVN, PXD, QEP, SWN, ECA and EOG also could see reduced cash flow related to NGL pricing, the firm said.
- Analysts at Tudor Pickering have a more optimistic view and expect an NGL pricing recovery next year, as cresting U.S. nat gas and crude production looks to be flat-to-declining through 2016, giving U.S. infrastructure time to catch up; the firm upgrades SWN to Accumulate from Hold, with GPOR, MRD, COG, RICE and ECA as other top picks, and UPL and EQT recommended on weakness.
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, KOLD, UNL, DCNG
Jun. 4, 2015, 3:58 PM
- Western Gas Equity Partners (WGP -8.2%) tumbles following Anadarko Petroleum's (APC -0.5%) plans, announced late yesterday, for a secondary offering of 2M WGP common equity units.
- APC also said it will concurrently sell 6.5M of its tangible equity units at $50 a piece, with each consisting of a prepaid equity purchase contract and a senior amortizing note.
- WGP is an APC subsidiary that was formed to hold partnership interests in Western Gas Partners (WES -2.8%), another APC subsidiary that owns and operates pipeline and other midstream energy assets; APC owns 193.4M WGP units, or 88.3% of its outstanding stock, which would fall to ~87.4% after the upcoming offering is completed.
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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