We maintain our Neutral recommendation on
Anadarko Petroleum Corporation
). The oil and gas exploration as well as production operator
presently holds a Zacks Rank #2 (Buy).
Why the Reiteration?
ANADARKO PETROL (APC): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
NOBLE ENERGY (NBL): Free Stock Analysis
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Anadarko Petroleum reported favorable financial results in the
first quarter 2013 with both earnings and revenue widely beating
our expectations. The reiteration however takes into account the
impact of violent hurricanes - as predicted by the National
Oceanic Atmospheric Administration - on the company's deep sea
operations in the months ahead.
Nevertheless, continued production growth from its Wattenberg and
Eagleford plays and ongoing exploration programs will contribute
to substantial earnings flow. The company's Gulf of Mexico
prospects are set to act as key growth drivers notably after the
addition of Shenandoah and Phobos discoveries.
On the flip side, fluctuations in commodity prices will continue
to affect Anadarko Petroleum's business. Moreover, it has a solid
presence in Africa. The political disturbances in the continent
may pose serious threats to Anadarko Petroleum's drilling
operations. The fear of political instability resurfacing in
Mozambique will be a cause of concern for the company especially
with its recent natural gas reservoir discovery there.
All said, we believe the company's series of gas processing and
transportation projects in the U.S. will help drive its growth
Other Stocks to Consider
Anadarko Petroleum's substantial domestic investments will
strengthen its position in the industry. Other oil and gas
players also looking good at the moment are Zacks Ranked #2
EOG Resources Inc.
Noble Energy Inc.