theoilyboy

Profiting from Apache Corp.: Enjoy the Ride, Utilize Trailing Stops

The story with Apache is more global than most analyst think. Apache has been pegged as a one trick GOM pony when in reality they have recently made finds in other places and continue to develop global reserves. Egypt and Argentina are doing well, and Australia in particular has made some significant finds.

The problem with Apache these past two years was that it historically has been a deal making company and very good at it. This comes from being founded in the 50's by bankers looking for tax shelters and finding there was actual money in the oil business. They would take sub-economic properties from the big guys (Shell and especially BP) and then monetize the reserves better. With oil prices high and valuations very high, they couldn't make these kinds of deals anymore and wisely had the financial discipline to not overpay. In fact, they sold some properties at great prices (China unit sold to Roc Oil). They were even castigated for not making deals by these same analysts.

With nat gas prices high, the stock is moving along with its peers, but I would argue its peer group is not really just the GOM guys and this growth in stock is overdue and justified.

Thanks for the article.