As per the market sources, independent oil and natural gas
exploration and production (E&P) company
Anadarko Petroleum Corp.
) may be acquired by the energy giant
Exxon Mobil Corp.
). After the market rumor, the trading volume of Anadarko Petroleum
jumped 211.6% to 11,688,364 on Jun 11, 2014 from its last 10 days
Shares of Anadarko Petroleum hit its 52-week high of $109.00 on Jun
11, 2014 following the news. Finally, the share price closed at
$108.32, up roughly 4.2% from the previous day's closing.
Is Anadarko a Buyout Candidate?
There are several factors which could make Anadarko Petroleum a
very attractive take-over target for energy biggies like Exxon
) and several others.
Anadarko Petroleum is engaged in exploration, development,
production, gathering, processing and marketing of natural gas,
crude oil, condensate and natural gas liquids (NGL). The company's
operations are strategically located in several mineral-rich areas,
including the Rocky Mountain region, the Appalachian Basin and the
deepwater Gulf of Mexico (GoM).
In addition, Anadarko Petroleum is also active in numerous
international locations like Brazil, Ghana, Indonesia, Liberia,
Mozambique and Sierra Leone. Anadarko Petroleum maintains a
disciplined capital spending program to expand its domestic as well
as overseas operations.
In first-quarter 2014, the company has increased estimated
recoverable resource range at its operations in Offshore Area 1,
Mozambique. Currently, the company plans to explore the immense
resource prospects of the Eagleford, Wattenberg and WolfCamp
The scheduled completion of the growth ventures along with
obtaining positive drilling outcomes acts as value driver for
reserve additions. At the end of 2013, Anadarko Petroleum had total
proved reserves of 2,792 million barrels of oil equivalent (MMBOE).
It consists 55% of natural gas, 30% of oil & condensates and
15% of NGL.
To Sum Up
Per a U.S. Energy Information Administration (EIA) report published
in Jun 2014, the average consumption for global petroleum and other
liquids will likely increase 1.4% year over to around 91.8 million
barrels per day. Primarily, higher demand from China is expected to
boost the future consumption level.
On the natural gas front, average total natural gas consumption is
expected to be 72.5 billion cubic feet per day in 2014. Higher
demand from the industrial sector on the back of an improvement in
manufacturing sector may lead to a 1.7% year-over-year rise in 2014
natural gas consumption.
Anadarko Petroleum's reserves are well-positioned to meet
increasing customer demand. So, the natural gas weighted assets of
Anadarko Petroleum will allow the buyer to reap benefits of a
natural gas boom worldwide.
Anadarko Petroleum has resolved the Tronox case. This has removed
the legal burden from the company, thus making it more lucrative
for the acquirers.
We believe that Anadarko Petroleum's well-diversified portfolio of
properties backed by steady exploration activities, asset
realignment program through systematic divestitures, strong proved
reserve base, a stable cash position and settlement of the Tronox
case make it a favorable candidate for acquisition.
Anadarko Petroleum currently has a Zacks Rank #3 (Hold).
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