Anadarko Raised to Outperform - Analyst Blog


Shutterstock photo

On Oct 25, 2013 we upgraded oil and gas operator Anadarko Petroleum Corp. 's ( APC ) 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 ( MTDR ), Northern Oil and Gas, Inc. ( NOG ) and VOC Energy Trust ( VOC ). All these companies carry a Zacks #1 Rank (Strong Buy).

ANADARKO PETROL (APC): Free Stock Analysis Report

MATADOR RESOURC (MTDR): Free Stock Analysis Report

NORTHRN OIL&GAS (NOG): Free Stock Analysis Report

VOC ENERGY TRST (VOC): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: APC , MTDR , NOG , VOC

More from


Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by