- 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.
Tue, Jul. 29, 4:47 PM
- Anadarko Petroleum (NYSE:APC) posts a 76% drop in Q2 earnings due in part to the $5.15B Tronox payout to settle environmental pollution charges, but says sales volumes were above the high end of quarterly guidance at ~77M boe, or 845K boe/day, and raises its FY 2014 sales volume outlook.
- APC says record U.S. onshore sales volumes averaged 667K boe/day, up 21% Y/Y, driven primarily by strong results from APC's Wattenberg field, Eagleford shale and Delaware Basin assets.
- Algerian sales volumes totaled ~73K bbl/day, up 70% Y/Y, driven mostly by El Merk, which recently achieved record daily gross volumes of 150K-plus bbl/day.
- Raises its FY 2014 sales volume guidance to 299M-302M boe from earlier guidance of 293M-298M boe.
- APC +0.4% AH.
Tue, Jul. 29, 4:11 PM| Comment!
Mon, Jul. 28, 5:35 PM
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Fri, Jul. 25, 9:59 AM
- A fracking ban in Longmont, Colo., was thrown out by a judge yesterday, rejecting the city's argument that the ban is legitimate because the fracking amounts to a purely local matter.
- Colorado's governor and business leaders aim to defeat ballot initiative proposals that would amend the state constitution to require wells to be set back 2,000 feet from structures and provide communities with more control over where drilling takes place.
- Anadarko Petroleum (NYSE:APC), Whiting Petroleum (NYSE:WLL) and Encana (NYSE:ECA), which are drilling in the Denver-Julesburg Basin, plan to spend $50M to fight the measures.
Mon, Jul. 21, 5:17 PM
- FMC Technologies (NYSE:FTI) says it signed an agreement to create a joint industry program that includes Anadarko (NYSE:APC), BP, ConocoPhillips (NYSE:COP) and Royal Dutch Shell (RDS.A, RDS.B) to develop the next generation of subsea production equipment.
- The companies plan to jointly work on a new generation of standardized subsea production equipment and systems designed to meet the challenges of producing oil and gas from deepwater reservoirs with pressures of up to 20K psi and temperatures of 350 F at the mudline.
Fri, Jul. 18, 5:38 PM
- Colorado Gov. Hickenlooper and business leaders say they will do “whatever it takes” to defeat initiatives proposed for fall elections that would restrict oil and gas drilling generating $30B/year for the state economy.
- Hickenlooper is trying to head off a ballot measure that would prohibit drilling within 2,000 feet of structures, a step energy companies say would effectively ban fracking in the state; another proposal would provide communities with more control over where drilling takes place.
- Anadarko Petroleum (NYSE:APC), Whiting Petroleum (NYSE:WLL) and Encana (NYSE:ECA), which are drilling in the Denver-Julesburg Basin, one of the nation’s richest oil and gas fields, said this week they will spend $50M to fight the measures.
Tue, Jul. 15, 11:46 AM
- Anadarko Petroleum (APC +2.6%) shares are strong after its financial update says its 8M acres of mineral rights in the Rocky Mountains are accelerating beyond last year’s $675M revenue boost.
- The disclosure has encouraged investors who want APC to sell some interest in the land or find a way to more fully recognize its value, Oppenheimer's Fadel Gheit says; the rights, which date back to land grants given 150 years ago, are in one of the fastest-growing areas for oil drilling in the U.S.
- APC is weighing a deal that would amount to “renting” some of the acreage and the revenue it generates to investors, Citi analyst Robert Morris says, adding that a similar deal within the next year could be worth as much as $750M.
Tue, Jul. 15, 8:42 AM
- Anadarko Petroleum (NYSE:APC) +1.5% premarket after providing a financial update, including the establishment of a new unsecured five-year credit facility, the issuance of senior notes, and the sale of Western Gas Equity Partners (NYSE:WGP) common units.
- Oil and natural gas revenues from both operated and non-operated production totaled ~$675M in 2013, and is trending higher in 2014 based on Q1 results, CFO Bob Gwin says.
- APC says it pared its stake in WGP and made $335M in cash on the offering.
Thu, Jul. 3, 11:35 AM
- Sasol (SSL) says it is teaming with Eni (E) and Mozambique's state-run energy company to study the viability of building a gas-to-liquids plant in the African country.
- The plant would service the gas fields off Mozambique's northern coast in the deepwater Rovuma Basin being developed by Eni and Anadarko Petroleum (APC) which could contain 35T-65T cu. ft. of recoverable natural gas.
- If SSL goes ahead with the plant, it will be the first gas-to-liquids facility in the country; gas production would not begin until at least 2018, and SSL does not say how much such a plant would cost.
Wed, Jul. 2, 11:46 AM
- Schlumberger (SLB +0.1%) makes its debut on the UBS Equity Focus List, as UBS and other Wall Street analysts think the oilfield services company will continue to drive margins on execution, technologies and efficiencies.
- UBS raises its rating on the sector to Neutral from Underweight, citing the growing drive for North American energy independence by the end of the decade.
- UBS also likes other top E&P and oilfield services leaders: Halliburton (HAL +0.3%) should enjoy a boost from a forecast 5% increase in margins over the next three years combined with a tightening frac calendar in some regions, Apache (APA -0.5%) trades at a discount vs. peers, and Anadarko (APC -0.9%) is favored amid rising demand for natural gas.
Tue, Jul. 1, 4:57 PM
- Anadarko Petroleum (APC) plans to sell $1.25B of debt, to include $625M each of 10- and 30-year notes, Bloomberg reports.
- APC last issued bonds in Aug. 2010, when it sold $2B of 6.4% notes due 2017 that yielded ~415 bps more than government bonds; the 10-year notes that may be issued as soon as today may yield 90 bps more than similar-maturity Treasurys, while the 30-year debentures may yield 115 bps more than benchmarks.
- Proceeds from the offering may be used for general corporate purposes, including debt repayment, working capital, capex and acquisitions.
Mon, Jun. 30, 6:07 PM| Comment!
Mon, Jun. 30, 12:42 PM
- New York’s cities and towns can block fracking within their borders, the state’s highest court rules, upholding the dismissal of lawsuits challenging bans in two small upstate towns.
- The ruling could lead the oil and gas industry to abandon fracking in New York, or it could mean that a patchwork of rules eventually may govern whether exploration can take place across the state; the case also may invigorate local challenges to the practice in states across the U.S.
- Parts of New York sit above the Marcellus Shale, some of whose top producers are: CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN.
Thu, Jun. 12, 9:11 AM
- An Anadarko Petroleum (APC) takeover by Exxon Mobil (XOM), as rumored yesterday, is unlikely, J.P. Morgan says.
- APC listed its net asset value in March at above $140/share, and the firm thinks management could require a premium to net asset value in a corporate takeover.
- JPM believes a more likely scenario is APC undertaking accretive transactions, including the monetization of assets.
- APC -0.8% premarket.
Wed, Jun. 11, 12:18 PM
- Anadarko Petroleum (APC +3.1%) moves to 52-week highs before pulling back a bit amid speculation it may be the subject of takeover interest from Exxon Mobil (XOM +0.6%).
- APC has “an asset base that would be coveted by any large player looking to make that kind of a splash," says a Raymond James analyst. "The question would be, is now the time for that?"
- APC says it doesn't comment on rumors.
Tue, Jun. 10, 5:58 PM
- A Ghana court has ordered state-run Ghana Gas to stop construction at a $650M gas plant designed to process gas from the offshore Jubilee field until the government pays land compensation to local chiefs.
- The government hopes the project's completion will boost power supply and help reduce spending on light crude imports for thermal power generation.
- Tullow Oil (TUWLF, TUWOY) is the lead operator of the Jubilee field; partners include Anadarko Petroleum (APC) and Kosmos Energy (KOS).
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