We maintain our Neutral recommendation on
Anadarko Petroleum Corporation
). The oil and gas exploration and production company currently
carries a Zacks Rank #3 (Hold). The current Zacks Consensus
Estimate for first-quarter 2013 is set at 88 cents per share.
Why the Reiteration?
Anadarko posted mixed results for the fourth quarter 2012, as
the bottom line beat the Zacks Consensus Estimate while the top
line fell short. Higher sales volumes partially tempered by lower
realized product prices were responsible for the outcome.
We believe Anadarko will continue to benefit from its
increasing presence in the reserve rich prospects of Africa. The
company's light oil Paon discovery in offshore Cote d'Ivoire will
be another profitable addition to its asset basket. In the U.S.,
the company is well positioned to exploit its Louisiana and Gulf
of Mexico assets.
Anadarko's targeted reserve accumulation of 3 billion barrels
by the end of 2013 and its effort to increase its presence in
resource-rich prospects of Ghana and Algeria will bode well for
its future growth. Moreover, a strong operating cash flow
position will allow the company to attract lucrative investment
However, a further decline in the credit rating from the
current "BBB-" as per Fitch's could create difficulty for the
company to raise debt while risks related to deepwater operations
are also a matter of concern.
Other Stocks to Consider
Other stocks in the exploration and production domain that are
presently doing well include
Range Resources Corporation
EPL Oil & Gas Inc.
Denbury Resources Inc.
). While Range Resources and EPL Oil & Gas carry a Zacks Rank
#1 (Strong Buy) Denbury holds a Zacks Rank #2 (Buy).
ANADARKO PETROL (APC): Free Stock Analysis
DENBURY RES INC (DNR): Free Stock Analysis
EPL OIL&GAS INC (EPL): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
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