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- 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. 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
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, 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.
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%).
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.
Mon, Jun. 30, 6:07 PM| Comment!
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, May. 6, 3:43 PM
- Anadarko Petroleum (APC +3.2%) pushes to a new 52-week high after its better than expected Q1, and Citigroup upgrades shares to Buy from Neutral with a $115 price target.
- Citi notes APC's strong Q1 operational and financial results, and that the company has a significant amount of financial flexibility along with a deep asset base to continue pushing growth rates higher.
- In today's earnings call, CEO Al Walker said he expects the long-running Tronox legal saga to end sometime during H2, enabling APC to focus on exploration, development and project management.
Mon, May. 5, 5:25 PM
- Anadarko Petroleum (APC) +2.3% AH after it swung to a Q1 loss due to a $4.3B contingent loss related to its settlement of litigation involving the 2006 acquisition of Kerr-McGee, but excluding settlement impacts and other items, adjusted earnings rose to $1.26 from $1.08 a year ago, and revenue easily beat expectations in soaring 50% to $5.84B.
- Delivered record daily sales volumes of 819K boe/day, up 3.2% Y/Y, boosted by a ~10K boe jump in output from wells in fields including the Eagle Ford in south Texas and the Wattenberg in Colorado.
- Raises the midpoint of FY 2014 sales-volume guidance by 3.5M boe.
- Says successful appraisal drilling activities in the Orca field increased total estimated recoverable resources in Mozambique's Offshore Area 1 to 50T-70T cf or more of natural gas.
Mon, May. 5, 4:13 PM| Comment!
Wed, Apr. 16, 11:24 AM
- Anadarko Petroleum (APC +0.9%) suspends drilling on a Gulf of Mexico deepwater rig that was rocked by weather-driven waves, apparently rupturing the hull column and flooding the ballast tank.
- The Ensco (ESV -1.5%) rig was conducting exploration activities for APC in the Nansen field when the weather front moved through the area; it was slammed by a giant wave and began taking on water.
- ESV says the situation is stable for now, and there is no need to evacuate the 116 people on board the rig.
Fri, Apr. 4, 10:58 AM
- Analysts jump aboard the Anadarko (APC +2.5%) bandwagon after the settlement in the Tronox lawsuit removes market uncertainty.
- J.P. Morgan upgrades shares to Overweight from Underweight with a new $129 price target, up from $84, viewing the settlement as positive for the stock even following yesterday's 14.5% surge.
- Raymond James raises its price target to $118 from $94, noting that APC's balance sheet is in great shape with more than enough liquidity to handle the settlement amount, not to mention its ownership of Western Gas shares valued at ~$9.8B.
- Morgan Stanley lifts its price target to $115 from $110, seeing APC now free to unlock significant value potential through asset sales, share buybacks and/or accelerated growth.
Thu, Apr. 3, 2:40 PM
- Anadarko (APC +12.1%) confirms it has entered into a settlement with the plaintiffs in the Tronox (TROX +1.6%) case to resolve all claims against Kerr-McGee, agreeing to pay $5.15B to settle environmental claims left behind when it bought the company for $18B in 2005.
- APC expects to record a gross tax benefit of ~$1.65B associated with the settlement, offset by ~$1.1B in uncertain tax positions, resulting in a net tax benefit of ~$550M.
- The U.S. had initially sought $25B from APC to clean up 2,772 sites and compensate ~8,100 TROX claimants, and a court in December said APC could expect to pay damages as low as $5.2B and as high as $14.2B.
Thu, Apr. 3, 1:54 PM| 1 Comment
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