- Anadarko derives more than 60% of its revenues from oil products and is currently focusing its business more on oil rather than natural gas.
- The company has completed all major work at the Lucius Project and has completed the Heidelberg Project.
- The company achieved production milestones in two of its oil projects during the second quarter which will further enhance the oil segment’s contribution to total revenue.
- Anadarko is also building one of the largest LNG projects ever taken up by a Western energy company in Mozambique but there are certain risks associated with this project.
- These projects would significantly increase production volume but due to falling oil, natural gas, and LNG prices the profit margin is going to be squeezed in the coming years.
- Anadarko’s second quarter total hydrocarbon production stood at 848,000 barrels of oil equivalent per day, 50,000 barrels more per day than the previous year, and a record for the company.
- Deutsche Bank choose Anadarko Petroleum Corp. as one of their top picks with a $137 price target, 29% higher than the current price.
- Anadarko has consistently added about 51% more hydrocarbon reserves to its existing reserves than its production each year.
- The Wattenberg Field continues to benefit the company in the long term, as the company seeks to drill over 360 additional wells in the current year.
- Additionally, Anadarko has a well-positioned portfolio of U.S. assets, and is determined to increase its liquid contribution to around 45 percent of the total production.
- The company expects its 2014 capital budget to be around $8.6-$8.8 billion, and aims to retain the historical reserve replacement ratio of 150 percent.
- However, the $15 billion LNG project poses certain risks, such as start-up delays and overrun costs.
- Anadarko Petroleum’s focus towards growing liquid and oil production is paving the path for future growth.
- Its industry-leading liquid and oil assets with higher margins and strong cash generating potential putts it in a position to post big profits in the coming quarters.
- Anadarko is an attractive pick with the recent fall in price.
- Anadarko’s onshore assets, particularly the Wattenberg field, are well positioned to ensure bright long-term growth prospects for the company.
- The company expects to grow its hydrocarbon sales volume from the Wattenberg field by a CAGR of 20% in the long run.
- The company is also well positioned in the Gulf of Mexico.
- With the progression of recent projects, the company is expected to deliver increased sales volume.
- Anadarko has seen its stock skyrocket from $80 in April to around $110. The rise was mostly due to the settlement of a US Justice Department case.
- The financial metrics look good for Anadarko. Among these metrics are EV/EBITDA, Return on Capital, and Debt to Equity (even with the new bond issue).
- Anadarko is a strong player in many major finds throughout the world, including Eagle Ford and Marcellus Shale.
- Catalysts for an increase in stock price include; issues in the Middle East, a possible merger/acquisition, and high net asset value per share.
Anadarko Petroleum Isn't The Best House In The Independent Drilling NeighborhoodAbba's Aces • Mon, Jul. 7
- The ominous cloud over the spill cleanup case has been lifted.
- The stock is fairly valued on 2015 earnings estimates.
- The technicals indicate some more downward momentum on the price of the stock.
Anadarko Petroleum - Fresh Highs On Deal Hopes, Too Late To Join The Momentum
- Anadarko Petroleum's shares hit fresh highs after renewed takeover chatter.
- Strong growth, interesting assets and a resolvement of the Tronox case increase the probabilities of a deal.
- Yet shares have already reflected a great deal of good news, it is too late for me to jump on the bandwagon.
Tronox Settlement Will Unleash The True Potential Of Anadarko
- Anadarko has entered into an agreement with the Tronox Adversary Proceeding's plaintiff to settle all claims by paying a penalty of $5.15 billion.
- The company has enough cash holdings to pay out this amount, so its financial position won't be too impacted.
- With settlement issues resolved, Anadarko can now concentrate on improving its operational performance. It has various high-value assets that will help to grow its production in the coming years.
Here's Why I'm Bullish On Anadarko Petroleum In The Wake Of Its Recent Dividend Boost
- On Tuesday, May 13, Anadarko announced it would be increasing its quarterly dividend by 50%.
- Comparatively speaking, Anadarko is trading at just under 19x forward earnings whereas two of its peers are trading at just under 25x and 31x their respected forward earnings.
- Recent trend behavior signals a buying mode for most long-term investors.
Anadarko Petroleum - Growth And Tronox Settlement Have Pushed Shares Above $100The Value Investor • Wed, May. 7
- Settlement of the Tronox case has diminished appeal in my opinion.
- Growth is impressive, yet valuation is more than fair amidst current leverage position.
- Growth and portfolio management of assets could create value, if executed at the right prices.
- At $99, I project fair value to reach $110 on the basis of increased production outputs, which should spur long-term earnings per share growth.
- With close to $4 billion in cash on the books and $9 billion in operating cash flow, Anadarko is well positioned to execute in any direction that it wants.
- Over the past four years, Anadarko has grown its output from onshore American plays by 65%, from 353,000 BOE/d to 583,000.
- Morgan Stanley reiterated the positive outlook of the company and set the price target at $110, reflecting an upside potential of 34%.
- The capital budget of 2014 is strategically allocated to increase the production mix allocation to higher-yielding hydrocarbons, such as focusing more on liquids.
- The continued success of the Wattenberg program has led the company to drill more than 360 wells by operating 13 rigs in 2014.
- The Lucius development project and the Heidelberg project in the Gulf of Mexico are also expected to contribute to the total production by the end of 2014 and 2015, respectively.
- Anadarko is set to deliver production growth, but the Tronox case will remain a headwind to the stock price till the final verdict.
Thu, Oct. 16, 2:32 PM
- Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) and partners including Anadarko Petroleum (NYSE:APC) and Kosmos Energy (NYSE:KOS) are planning to invest $2.2B next year to drill wells in Ghana’s Jubilee and Tweneboa-Enyenra-Ntomme, or TEN, oil fields, the deputy general manager of Tullow Oil Ghana says.
- The partners plan to invest $20B over the next decade to boost the country's crude oil output to 500K bbl/day from 103K now.
- Tullow, the operator of the projects, plans to drill two wells in the TEN field and as many as three wells at Jubilee.
Thu, Oct. 9, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Thu, Oct. 9, 9:56 AM
- Global oil producers open broadly lower as oil prices continue to slide on concerns about high supplies and weak global economic growth (also): RDS.A -2.7%, STO -2.7%, TOT -2.5%, HES -2%, APC -1.7%, BP -1.6%, CVX -1.5%, COP -1%, XOM -0.8%.
- Brent prices slump to $91/bbl, approaching two-year intraday lows, and Nymex crude tumbles to $86.67/bbl to an 18-month intraday low.
- The EIA said yesterday that U.S. crude supplies rose by a more than expected 5% last week, while gasoline and distillate inventories unexpectedly grew as well.
- Barclays is cutting its oil price forecasts: It now sees U.S. crude averaging $85/bbl in Q4 and $89 in 2015, down from previous estimates of $98 in Q4 and $100 next year, and Brent crude averaging $93/bbl in Q4 and $96 in 2015, down from a respective $106 and $107 previously.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Tue, Sep. 30, 10:58 AM
- Exxon Mobil (NYSE:XOM) had secured the best strategic position of any western oil company in Russia, but instead its Russian ambitions are on ice because of western sanctions, and questions about its sluggish growth and weak share price performance vs. some leading rivals are returning to the fore.
- "Russia was going to be Exxon’s next mega-area, and the list of mega-areas in the world is very short," says Wolfe Research's Paul Sankey.
- FT reports many Russian oil executives believe western sanctions will prove relatively short-lived, but some analysts think the Russians may overestimate U.S. willingness to sacrifice foreign policy goals to help American businesses.
- If the road in Russia remains blocked, analysts say XOM could use its financial strength to invest more in the U.S. oil and gas boom; rumors have swirled about an XOM bid for Anadarko Petroleum (NYSE:APC), BG Group (OTCPK:BRGXF, OTCQX:BRGYY) or even BP, an option that could be particularly attractive if weak oil prices put pressure on company valuations.
Fri, Sep. 12, 8:19 AM
- Mitsubishi agrees to buy a 20% stake in an oil exploration project led by Anadarko Petroleum (NYSE:APC) offshore of Ivory Coast, pending approval by the African country's government.
- If enough oil is found and the project moves to the development phase, the total investment would be ~Y800B ($7.5B), of which Mitsubishi would pay 20%.
- APC, the operator and owner of 55% of the block, aims to start production in 2019, and output is expected to reach ~60K bbl/day at its peak.
Mon, Sep. 8, 6:43 PM
- The energy sector has seen little M&A activity despite a growth shortfall and cheap borrowing rates, but UBS analysts think a focus on incremental returns may lead to less exploration and more deals as resource prices on the market have fallen.
- The firm figures four large-cap E&P companies - Anadarko Petroleum (NYSE:APC), EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO) and Pioneer Natural Resources (NYSE:PXD) - could prove tantalizing acquisition targets, but the buyer likely would need very deep pockets.
- In the case of EOG, UBS says the company's strong position in the three biggest tight oil plays - the Eagle Ford, Bakken and Permian - make it a perfect fit for an integrated major looking to expand in those areas.
Mon, Sep. 8, 12:32 PM
- The day's five biggest decliners in the S&P 500 are all energy companies - Newfield Exploration (NFX -5.6%), EOG Resources (EOG -3.6%), Anadarko Petroleum (APC -2.9%), Cimarex Energy (XEC -3.3%) and Pioneer Natural Resources (PXD -3.4%) - as crude oil prices slide to new lows, including Brent crude's first move below $100/bbl in more than a year.
- Brent crude dropped $1.12, or 1.1%, to $99.70/bbl after falling to as low as $99.36, a 16-month low, while U.S. crude slipped more than a percent to below $92 after settling at $93.29 on Friday for its sixth weekly drop in seven.
- Traders are concerned crude demand won't keep up, with data from the U.S. and China, the world's top oil consumers, suggesting their economies aren't growing as quickly as had been hoped.
- ETFs: USO, OIL, UCO, SCO, XOP, BNO, DTO, DBO, IEO, CRUD, PXE, USL, DBE, UWTI, DWTI, DNO, RJN, SZO, OLO, JJE, ONG, RGRE, OLEM, UBN
Tue, Sep. 2, 2:15 PM
- Russia's Lukoil (OTCPK:LUKOY, OTC:LUKOF) has made a discovery at Ghana’s offshore Cape Three Points project, Bloomberg reports.
- Ghana and its partners, including Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) and Anadarko Petroleum (NYSE:APC), plan to spend $20B in the next decade to boost oil production to 500K bbl/day from current output of ~100K bbl/day.
- If commercially viable, the Lukoil find would be Ghana’s fifth planned offshore field.
Thu, Aug. 28, 10:58 AM
- The Marcellus region is now the world's biggest natural gas shale play, and there’s still $90B to be made by tapping the area’s reserves, according to a study by Wood Mackenzie.
- The energy consultant predicts that the top 20 operators in the Marcellus will earn nearly $86B over the life of the play after the costs of reaching the reserves; for comparison, it estimates ~$118B to be made by extracting the resources in North Dakota’s Bakken region, but most production there is higher-priced oil.
- Major Marcellus shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Thu, Aug. 21, 3:29 PM
- Mozambique will invest more than $30B to begin building capacity in its natural gas sector to produce 20M metric tons/year of liquefied natural gas, with the first exports due to start in 2018, according to the head of the national oil company.
- The investments will be made to develop the northern ports of Pemba and Palma, where a giant logistics base and LNG production plants are planned that will use gas produced from offshore fields in the Rovuma Basin being developed by Anadarko Petroleum (NYSE:APC) and Eni (NYSE:E).
- Commitments from APC and Eni already run into several billions of dollars, but the national oil company estimate is the first to put an overall price tag on the first phase of Mozambique's LNG ambitions.
Thu, Aug. 21, 11:43 AM
- Hedge funds are having a difficult time of it again this year, up 1% vs. a 7.5% gain for the S&P 500, according to Goldman Sachs, which crunched the numbers on 775 funds with $1.9T in AUM.
- Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
- ACT, AAPL, FB, AGN, AAL, GM, TWC, AIG, MSFT, HTZ, CHTR, MU, WMB, LNG, C, DAL, HCA, APC, CBS, ALLY, GOOGL, APD, NRF, BAC, EBAY, LBTYK, PCLN, VRX, BIDU, DTV, DISH, DG, EQIX, MA, WAG, ARCP, GILD, LINTA, MON, FOXA, VC, AMZN, BRK.A, BRK.B, SUNE, CMCSA, JPM, MIC, CCI, HES, LAMR.
- A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
Fri, Aug. 15, 8:42 AM
- Mozambique’s lawmakers approve petroleum laws that open the way for new oil and gas bids as well as a special tax break for offshore fields operated by Anadarko Petroleum (NYSE:APC) and Eni (NYSE:E) to aid their development.
- The government is finalizing the process for new oil and gas bids and will conclude this by the end of the year, the mineral resources minister says; while the new bill enables the two companies to pay less tax, the final percentages have yet to be released.
- Mozambique’s offshore fields may hold enough gas to meet global demand for more than two years, according to the state-owned oil company that holds stakes in the Rovuma-1 deposit operated by APC.
Tue, Aug. 12, 10:45 AM
- Anadarko Petroleum's (APC -1.7%) plan to develop a massive gas resource offshore Mozambique is the subject of a page one story in today's WSJ; it is a highly promising new resource but there are plenty of challenges.
- The nearest viable customers are thousands of miles away, so for APC to make the most of its investment - which has cost it $1B already and could cost tens of billions more - it will need to build plants to liquefy the gas to make it easier to export.
- Mozambique's large gas reserves should provide an opportunity for the country to earn much needed revenue, but APC’s plans already require the resettlement of ~3K villagers; the company is working on a plan to compensate them, but local groups so far have refused to cooperate.
Tue, Aug. 5, 7:17 PM
- Natural gas production in the Marcellus region exceeded 15B cf/day in July, the most productive period ever recorded there, according to a new report from the U.S. Energy Information Administration.
- Marcellus, located mostly in West Virginia and Pennsylvania, now accounts for nearly 40% of total U.S. shale gas production, and its rapid growth isn’t expected to ebb soon, the report says.
- New wells in the region are expected to deliver another 600M cf/day, more than offsetting decline rates, for a net production increase of 247M cf/day.
- Major Marcellus shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN.
Tue, Aug. 5, 7:53 AM
Mon, Aug. 4, 2:31 PM
- Noble Energy (NBL +5.8%) and Anadarko Petroleum (APC +5.3%) spike higher on news of an agreement to remove anti-fracking initiates from the ballot in Colorado.
- Gov. Hickenlooper and U.S. Rep. Polis are forming a task force to craft regulations to minimize conflicts over the siting of oil and gas facilities in Colorado; under the proposal, two initiatives aimed at tightening controls would be withdrawn and two initiatives considered pro-industry also would be pulled.
- Wells Fargo views the deal as a positive for companies with exposure to the Denver-Julesburg Basin, including NBL, APC, Bill Barrett (BBG +4.8%), PDC Energy (PDCE +10.1%), Whiting Petroleum (WLL +4.5%) and Carrizo Oil & Gas (CRZO +4.3%).
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