) hit a 52-week high of $90.74 on Oct 16. In fact, the Houston,
TX-based energy explorer has seen its stock price climb some 26%
during the past six months. This price appreciation can be
attributed to its large geographically-diversified reserve base,
balanced exposure to natural gas and crude oil, impressive growth
in its onshore liquids production and portfolio rebalancing
Why the Bullishness?
Apache is noted for growing through the acquisition and
development of existing reserves. Long-term production growth
visibility has significantly improved following the
) asset acquisition, the purchase of a portion of
Devon Energy Corp.
) Gulf of Mexico assets and the deal to acquire Mariner Energy.
These new acreage positions further complement the company's
diversified asset base.
Apache's international operations also continue to generate
attractive returns. In particular, the company has been steadily
building its asset base in Australia over the last few years.
Apache expects to see meaningful growth in free cash flow in the
coming years, stemming from project start-ups in that country.
Management has also not been shy of divesting assets,
particularly those that do not fit into the company's long-term
growth plan. Recently, Apache agreed to exit its operations in
Kenya, following the sale of certain properties in Canada, and
the divestment of 33% of its 'risky' Egypt business. In fact, the
company has announced some $7 billion worth of asset dispositions
Finally, the oil and gas producer's cheap valuation and multiyear
trends in reserve replacement are other positives in the Apache
Zacks Rank & Stock Picks
With Apache shares trading at 52-week high, any upside from here
may be limited, as suggested by the company's Zacks Rank #3
(Hold). Meanwhile one can look at other domestic upstream energy
Resolute Energy Corp.
) as attractive investments. The firm - sporting a Zacks Rank #1
(Strong Buy) - offers value and is worth accumulating at current
APACHE CORP (APA): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
DEVON ENERGY (DVN): Free Stock Analysis
RESOLUTE ENERGY (REN): Free Stock Analysis
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