- 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.
Fri, Feb. 14, 9:40 AM
- Hong Kong-listed oil trader and shipping firm Brightoil has held talks with Anadarko Petroleum (APC) and Newfield Exploration (NFX) to buy their China operations, Reuters reports.
- Brightoil has been searching for upstream investment opportunities in China and overseas for several years; trading in its shares has been suspended since Feb. 11 pending an announcement of a "very substantial acquisition."
- APC owns a ~35% interest in production and development projects in China's Bohai Bay, and has a 50% interest in South China Sea exploration acreage.
Thu, Feb. 13, 7:59 AM
- Anadarko Petroleum (APC) should face $20.8B in environmental cleanup claims and not be allowed to cut the amount to $850M, a trust for creditors of Tronox (TROX) told a bankruptcy judge yesterday in the case brought by bankrupt Tronox and the U.S. government.
- In a December ruling, U.S. Bankruptcy Judge Allan Gropper suggested a range of $5.2B-$14.5B to pay for the clean up of contaminated properties; APC's Q4 earnings report accounted for a payment of just $850M.
- APC -0.8% premarket.
Tue, Feb. 11, 3:47 PM| Comment!
Thu, Feb. 6, 6:52 PM
- Freezing weather across the U.S. this winter have pushed demand for natural gas to all-time highs, but at the same time a number of companies are saying the foul weather is hurting production.
- The latest is Chesapeake Energy (CHK), whose oil and gas output in December was well below its expectations due to "weather challenges" that continued into January and February, CEO Doug Lawler told analysts on today's earnings call.
- Anadarko (APC) said yesterday during its call that its operations in Colorado were finally returning to normal.
- Estimated U.S. natural gas output is running ~800M cf/day lower than the 30-day moving average and is off 1.5B cf/day from the start of this year when temperatures were more moderate.
Tue, Feb. 4, 5:37 PM
- Anadarko Petroleum (APC) is unsuccessful after its wildcat Romney-1 well drilled in the Taranaki basin off New Zealand hits only water.
- The well, drilled in 5,085 feet of water, did not encounter commercial quantities of oil or natural gas but APC insists that the data collected will be useful in determining future activity.
- The Romney well had sparked a backlash from environmentalists who claimed deepwater drilling is inherently unsafe.
Tue, Feb. 4, 2:19 PM
- Anadarko Petroleum (APC +2.3%) is on the rise despite missing its earnings number, and Jefferies analysts explain why the miss isn't a big deal.
- The EPS miss was driven by exploration expense that was $300M more than expected, but production was ahead of guidance, as oil, gas and NGL volumes all beat estimates, the firm says.
- DD&A was significantly lower than forecast, and cash costs came in lower than expected; pricing was roughly in line on a blended basis, and NGL pricing was strong, with realizations of over $40/bbl.
- However, J.P. Morgan finds APC’s handling of the Tronox liabilities curious, noting that its given range of probable losses do not include possible interest, attorneys’ fees or other costs, which could be material; in the case of a settlement, APC expects the payment would be substantially greater than the $850M accrual.
Mon, Feb. 3, 5:59 PM
- Anadarko Petroleum (APC) -0.2% AH after unadjusted earnings swung to a Q4 loss on contingent losses linked to a legal dispute related to the company's 2006 acquisition of Kerr-McGee.
- APC believes the costs of claims related to its Kerr-McGee subsidiary - which eventually was spun off into Tronox - could range from $850M-$5.2B, although its reported Q4 loss accounted for a payment of just $850M; a federal judge has ruled APC could be liable for more than $14B.
- APC's loss came as it reported a record level of oil and gas sales volumes for 2013, hitting an average of 781K boe/day, up 7% Y/Y, but Q4 revenue from oil and gas slipped to $3.34B from $3.41B a year earlier on softer prices.
Mon, Feb. 3, 4:13 PM| Comment!
Mon, Feb. 3, 12:10 AM
Sun, Feb. 2, 5:35 PM
Wed, Jan. 22, 10:26 AM| 1 Comment
Wed, Jan. 15, 7:22 PM
- Exploration and production companies tend to track crude oil prices, J.P. Morgan's Joseph Allman says, so look no further than the current state of the oil futures market for a reason to be bearish on the sector.
- WTI oil futures, which decline every quarter in 2014 and beyond, suggest an off year for the E&P group, Allman writes, noting that the set-up could be similar to 2012, when WTI was down 7% for the year and the S&P was up 13%.
- That doesn’t mean that some oil stocks can’t outperform: Allman likes EOG Resources (EOG) and Noble Energy (NBL) among large caps for their “resource expansion and improved operations.”
- His least favorite stocks in the sector include Anadarko Petroleum (APC), Devon Energy (DVN) and Chesapeake (CHK).
Tue, Jan. 14, 6:56 PM
- The weak Canadian dollar will provide extra cash flow to the country's energy sector but this is not being recognized by investors, particularly those outside Canada, Canaccord's Martin Roberge says in recommending Canadian Natural Resources (CNQ), MEG Energy (MEGEF) and Suncor (SU) as Canadian names benefiting most by heavy oil differentials.
- "A weaker C$ should also help spreads to narrow but more importantly allow Canadian producers to enjoy huge currency translation gains," Roberge says.
- The shale growth allure of U.S. E&Ps has blinded investors, but with the loonie breaking down below key resistance levels, the strategist sees a catalyst for going long the three Canadian names and shorting ConocoPhillips (COP), Anadarko (APC) and EOG.
Tue, Jan. 14, 2:37 PM
- Anadarko Petroleum (APC +2.7%) says it should pay no more than $1.76B in damages to Tronox (TROX) creditors for an improper spinoff, not up to $14.5B as a judge ruled last month.
- In a filing yesterday with U.S. Bankruptcy Court in Manhattan, APC challenged parts of a decision made last month that found it liable for $5B-$14.5B, subject to the calculation of how much APC is owed as a creditor in TROX's bankruptcy.
- "The Court's approach... leads to incorrect conclusions for the calculation of damages and is contrary to [its] stated view that the purpose of the applicable law is 'remedial rather than punitive'," APC CEO Al Walker says.
Fri, Jan. 10, 12:24 PM
- Investors have been worried that Anadarko (APC +0.2%) might have more risks following the surprise ruling that it could be liable for as much as $14.2B related to its 2006 acquisition of Kerr-McGee, but Deutsche Bank says fears largely are unwarranted, with the worst case outcome now understood and risked by the market.
- The long-term is mostly positive, the firm writes, as APC "likely comes out of Tronox in a more aggressive monetization/value realization mode with the market focused on NAV upside and improving operating trends in 2014."
- APC trades at 5.4x 2014 EV/debt-adjusted cash flow vs. 6.4x for its average competitor; EOG Resources (EOG) trades at 7.1x, Noble Energy (NBL) at 8.7x times and Chesapeake Energy (CHK) at 7.3x.
Mon, Jan. 6, 12:27 PM
- Bonanza Creek Energy (BCEI +3.8%) is upgraded to Buy from Neutral and Hess (HES -0.7%) is cut to Neutral from Buy at Mizuho on valuation as part of the firm's broader sector outlook, which sees crude prices remaining above breakeven for key basins despite headwinds.
- The firm expects further efficiency gains as key players in the Bakken (HES), Permian (APA, APC), Eagle Ford (MRO, APC) and DJ Basin (APC, NBL, PDCE, SYRG, BCEI) continue to hone skills; its top picks going into 2014 are APA, Kosmos (KOS) and, on the riskier side, APC.
- With APA, the firm sees a continued turnaround to a leaner, shareholder-focused E&P with material catalysts; with KOS, a seasoned explorer with big drilling upside alongside cash flow generation; with APC, market caution until a Tronox damages number is revealed but rebounding given solid assets and liquidity.
APC vs. ETF Alternatives
Other News & PR