On May 19, we issued an updated research report on
Anadarko Petroleum Corp.
). The oil & gas operator's diversified asset base allows it to
maintain a healthy reserve portfolio. Anadarko Petroleum plans to
invest around $9.0 billion to $9.5 billion in 2014 which will
stimulate development activities, especially in domestic
properties, leading to future reserve accretion.
However, disruption of operations on account of accidents and
natural disasters remain a matter of concern. Moreover, the threat
of political unrest in Africa could thwart the company's
large-scale exploration programs.
Anadarko Petroleum, a Zacks Rank #3 (Hold) stock, posted
impressive results in first-quarter 2014. Quarterly earnings as
well as revenue outpaced the Zacks Consensus Estimates. On a
year-over-year basis, top and bottom lines also outperformed backed
by increased contribution from its U.S. assets.
Anadarko Petroleum's continued non-core asset divestitures will
aid in funding its exploration activities, especially in the
liquids-rich provinces of the U.S. In 2014, the company plans to
shed its non-operating interest in the Bohai Bay field in offshore
China for around $1.08 billion.
furthermore, Anadarko Petroleum is progressing well with its
deepwater exploration programs as well as its onshore development
projects. The company's premium assets which include the Colorado's
Wattenberg, Texas' Eagleford and Delaware's WolfCamp basins will
act as key production catalysts in the coming years. The
operational start-up of midstream facilities like the Lancaster
processing plant and Front Range Pipeline system will also lend
upside to the positive momentum.
Moreover, the company continues to reward its shareholders with
attractive dividend payments. Anadarko Petroleum recently hiked its
dividend rate by 50% to 27 cents per share from 18 cents per share
which will certainly retain investors' attention on the stock.
On the flip side, proposed fracking regulations by the U.S.
Department of Interiors, which are likely to be finalized by the
end of 2014, could undermine Anadarko Petroleum's key domestic
Key Picks from the Sector
Other better-ranked stocks in this sector include
Athlon Energy Inc.
RSP Permian, Inc.
). All the above oil and gas stocks currently carry a Zacks Rank #1
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ANADARKO PETROL (APC): Free Stock Analysis
ATHLON ENERGY (ATHL): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
RSP PERMIAN INC (RSPP): Free Stock Analysis
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