On Oct 25, 2013 we upgraded oil and gas operator
Anadarko Petroleum Corp.
) long-term recommendation to Outperform from Neutral based on
the company's high reserve potential from the Permian and Utica
assets as well as its explorations in Algeria where estimates
suggest reserves will double in the next seven to ten years. At
the moment, it retains a Zacks Rank #3 (Hold).
Why the Upgrade?
The emergence of modern fracking technology has allowed
companies like Anadarko to efficiently extract oil and gas from
resource-rich shale plays. The company has capitalized well on
the current shale boom in the U.S. The Permian play with an
estimated resource potential of over one billion barrels of oil
will offer attractive growth opportunities for Anadarko.
The Caeser/Tonga block in the Gulf of Mexico ("GoM") is also
set to come online this year accentuating Anadarko's sales
momentum. With three new discoveries under its belt, the company
is poised to benefit from the GoM play.
In addition, the government gave a go ahead to its exploration
venture in Ghana which will drive production in the years ahead.
Anadarko's liquefied natural gas project in Mozambique is
expected to be another key highlight in the coming years.
The company's cash balance of $4.5 billion as of Jun 30, 2013
will effectively finance its ongoing growth projects. Anadarko's
multiple oil and gas ventures will also allow the company to
reward its shareholders.
Other Stocks to Consider
Other stocks in the exploration and production field that are
currently performing well include
Matador Resources Company
Northern Oil and Gas, Inc.
VOC Energy Trust
). All these companies carry a Zacks #1 Rank (Strong Buy).
ANADARKO PETROL (APC): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
NORTHRN OIL&GAS (NOG): Free Stock Analysis
VOC ENERGY TRST (VOC): Free Stock Analysis
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