- 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.
Mon, Jan. 6, 10:41 AM
- Raymond James sees a better year for oil in 2014, and a better year for ConocoPhillips (COP +1%) - whose rating the firm raises by a notch to Market Perform from Underperform - but warns not to get too excited.
- Analyst Pavel Molchanov's main concern about COP is significant outspending, but he says this becomes less pressing in the context of the improved oil forecast, and he finds valuation metrics more reasonable.
- Molchanov still sees better E&P ideas - among multinational large-caps, he prefers Apache (APA), Anadarko (APC), BG Group (BRGYY, BRGXF), Marathon Oil (MRO) and Occidental (OXY) - but he no longer finds sufficient downside in COP to warrant a continued negative stance.
Dec. 24, 2013, 12:27 PM
- It might seem tempting for energy investors to buy underperforming E&P companies such as Forest Oil (FST) and Newfield Exploration (NFX), but Stifel’s Amir Arif thinks it makes more sense to buy quality names that aren't reflecting proper value rather than trying to catch a year-end bounce in the worst performing names that might have been driven further down from tax-loss related selling.
- Investors eyeing energy stocks for a tradeable bounce at the start of the new year don't fare so well, Stifel says; on average, the bottom quartile performers continued to underperform the group by 1.2%, 3.7%, and 2.4% over the coming 30, 60, and 90 days respectively.
- Arif’s top picks include Anadarko (APC), Noble Energy (NBL) and EQT, though NFX could be enticing for investors seeking “value turnaround stories."
Dec. 20, 2013, 5:28 PM
- Kinder Morgan Partners (KMP) and Magellan Midstream Partners (MMP) reach agreement with Anadarko Petroleum (APC) to transport Eagle Ford Shale production from Gardendale, Tex., to the Houston Ship Channel via the KMCC Pipeline.
- The KMP-MMP joint venture plan to build 160K barrels of storage capacity and a pump station at Gardendale, a ~10-mile pipeline to connect the Double Eagle Pipeline and KMCC Pipeline, and 240K barrels of storage at its Helena Station; completion is expected by early 2015.
Dec. 18, 2013, 6:26 PM
- Anadarko Petroleum's (APC) legal troubles likely haven't tarnished its allure for investors - instead, it has helped make APC $9B cheaper, and more appealing for a buyout, Bloomberg reports.
- APC may be at the top of the list for multinational oil companies seeking purchases to turn around declining production, analysts say; a buyer willing to shell out $40B plus a premium would get a presence in fields where few big energy companies have exposure: the Niobrara formation in Colorado, Texas’ Eagle Ford shale basin, and offshore Africa.
- APC would be an especially good fit for Exxon (XOM) or Chevron (CVX), Oppenheimer's Fadel Gheit says, although it's hard to see how a deal could be serious without a resolution to the Tronox lawsuit, which could leave APC on the hook for as much as $14B in environmental cleanup and health claims.
Dec. 14, 2013, 8:25 AM
- A federal bankruptcy judge’s ruling that Anadarko Petroleum (APC) may have to pay up to $14.2B in damages related to the Tronox spinoff shocked Wall Street, as investors erased nearly $4B from APC’s market cap Friday.
- U.S. officials say the award would be the largest ever in a bankruptcy case for federal environmental claims and liabilities, and it ranks among the largest environmental enforcement awards in U.S. history.
- A likely appeal could bring years of legal wrangling, prompting calls for a settlement, which is perhaps what the judge is attempting to motivate; otherwise, APC faces a substantial overhang on its stock price - possibly for as long as 10 years, Citigroup says.
- The ruling ruined APC’s own $1.4B estimate of exposure in the case; if more money is needed to cover damages, APC could sell low cash-generating assets in Mozambique, Brazil and elsewhere for a combined $18B, leaving it with excess cash even in the face of a large judgment, Tudor Pickering says.
- Even a worst-case scenario isn't likely to torpedo APC, but the next question may be whether it might be weak enough to draw an unsolicited takeover bid.
Dec. 13, 2013, 10:47 AM
- Thailand's PTT signs a preliminary deal with Anadarko Petroleum (APC) to buy 2.6M metric tons/year of liquefied natural gas from a field in Mozambique, the latest in a string of efforts by Thailand to secure long-term energy supplies.
- APC is the major shareholder and operator of Rovuma Offshore Area 1 in Mozambique, which is estimated to hold recoverable reserves of 35T-65T cu. ft. of gas.
- PTT recently joined with Indonesia's Pertamina to buy Hess' (HES) stake in two Indonesian offshore oil fields for $1.3B, and PTT is widely expected by analysts to also win the bid for Hess' assets in Thailand.
Dec. 13, 2013, 9:16 AM
Dec. 13, 2013, 7:58 AM
- Anadarko Petroleum (APC) almost certainly will appeal yesterday's court ruling against it in the Tronox litigation: "We vehemently disagree with the judge's [decision]... We fully expect to pursue every avenue available to us through the appellate process to protect the interests of our stakeholders, once a final judgment including damages has been rendered."
- The severity of the ruling for APC will come down to damages: While the judge found that the trust is entitled to recover ~$14.17B, APC may be able to lower the figure by ~$9B for offsetting costs it may have incurred from the Tronox transaction.
- J.P. Morgan downgrades APC to Underweight and a $77 price target, while Citi and Global Hunter cut shares to Neutral from Buy; Credit Suisse views $65-$70 as a potential floor level valuation.
- Jefferies, maintaining a Buy rating and $111 price target, believes APC could pursue more aggressive dividend/buyback moves to instill shareholder confidence that the ruling will be found excessive.
- Shares -11.5% premarket.
Dec. 12, 2013, 6:03 PM
- Anadarko Petroleum (APC) -12.5% AH after a bankruptcy judge rules its Kerr-McGee unit acted improperly in the 2005 spinoff of Tronox (TROX) and should pay for environmental cleanup and to compensate people who claim damage from toxins.
- The U.S. government had sought to recover $25B to clean ~2,700 polluted sites and compensate about ~8,100 tort claimants; a trust set up to pay plaintiffs calls for 88% of the judgment to go to trusts for cleanup, according to court papers, with the remainder going to toxin claimants.
- The judge says APC and Kerr-McGee intended to “hinder and delay" when they transferred out and spun off oil and gas assets.
Dec. 12, 2013, 5:34 PM
Dec. 4, 2013, 5:49 PM
- Anadarko (APC) and BP ask the U.S. Appeals Court in New Orleans to toss out Judge Barbier's finding that both companies were liable under the Clean Water Act for the 2010 Gulf of Mexico oil spill.
- Both companies contend that Barbier improperly decided the issue of liability before trial; APC also says the government is trying to shift the burden to the owners of the spilled oil rather than who’s responsible for the discharge.
- Barbier’s ruling left both companies immediately vulnerable to $1,100/bbl fines.
Nov. 19, 2013, 9:26 AM
- Japanese trading firms Mitsui (MITSF, MITSY) and Itochu (ITOCF, ITOCY) are considering a stake in Tullow Oil's (TUWLF, TUWOY) $4.9B TEN oil project off the coast of Ghana, WSJ reports.
- Tullow said last week that the process to sell down part of its 47% stake in TEN was progressing well and that bids were expected later this month; Tullow wants to sell a 17%-20% stake, which could fetch ~$600M.
- A successful sale would free up Tullow to focus on further projects in Africa, where it has several exploration campaigns under way.
- Tullow's other partners in the project include Kosmos Energy (KOS) and Anadarko Petroleum (APC).
Nov. 19, 2013, 8:58 AM
- Colorado officials unveiled new standards for reducing airborne emissions from oil and natural gas operations amid environmental worries by residents, less than two weeks after four communities voted to halt fracking.
- The state's proposed rules include first-in-the-U.S. regulations to force energy companies to reduce the emission of methane.
- Anadarko Petroleum (APC) is one of three big drillers that have come out in support of the proposed rules; the others are Encana (ECA) and Noble Energy (NBL).
Nov. 15, 2013, 12:41 PM
- Voters in the Denver suburb of Broomfield, Colo., narrowly approve a five-year moratorium on fracking after a recount by county officials; the new results mean that all four Colorado communities with similar measures on the ballot this month voted to reject fracking.
- The results in Broomfield, on the edge of the Niobrara Shale, were closely watched because the community is considered less liberal than those which passed anti-fracking measures.
- Active in the Niobrara: NBL, APC, WPX, BBG, CRZO, BCEI, SYRG, PDCE.
Nov. 8, 2013, 8:39 AM
- Total (TOT) and partners Anadarko Petroleum (APC) and Canadian Natural Resource (CNQ) will spend up to $300M to drill exploration wells on three offshore blocks in Ivory Coast in 2014, the head of TOT's local unit says.
- Oil and gas exploration in West Africa's Gulf of Guinea has risen sharply since Ghana discovered its giant Jubilee field in 2007 and brought it to production in record time in late 2010.
Nov. 7, 2013, 3:21 PM| Comment!
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