Anadarko: Buy Now For The Best Gains

Anadarko Petroleum (APC) was recently upgraded from market perform to outperform by analysts at Sanford C. Bernstein, the same rating assigned by Raymond James’ analysts. Though Anadarko’s year to date performance is tracking cratering U.S. natural gas prices and recent declines in crude oil, so are the performances of nearly all of its major competitors. What Anadarko has that most other exploration and production companies do not is a global resource base of risked resources in areas where natural gas brings a premium to U.S. prices, while maintaining an exceptional shale oil portfolio in the Central U.S. in addition to conventional oil resources in the Gulf of Mexico (GOM) and elsewhere.

It is exactly this diversification and the prospect of doubling its production and revenues in the coming years that has me excited about Anadarko. At the present moment, Anadarko has more funded exploration capability and a better cash cushion than nearly any other U.S. independent. Let’s look at a few of its plays to see why.

Track Record in African Deepwater

Royal Dutch Shell (RDS.A) and Thai energy company PTT Exploration & Production PCL are battling to take over Cove Energy PLC. Whichever company gains the approval of Cove’s shareholders will take over an 8.5% stake in Anadarko’s operations in the Rovuma Basin off the shores of Mozambique, one of Cove’s largest and most valuable assets.

The Rovuma discovery, also known as Prosperidade, is one of the largest made by Anadarko or any other company in years, with up to 50 tcf in place, up to 30 tcf of which is believed recoverable.To continue reading, click here.