Current APC Stock Info

Demand growth will drive prices up; APC targets $3.5 billion in divestitures by yearend
Anadarko Petroleum (ticker: APC) said during its conference call today that the company expects demand to surprise to the upside while U.S. production bottoms out around 8 MMBOPD, helping to support prices at $60 per barrel in 2017.

At that price, Anadarko believes it should have the cash margins to “accelerate activity and achieve strong returns,” said Anadarko Chairman, President and CEO Al Walker.

If that scenario comes to pass, Walker said Anadark...

Analyst Commentary

KRL 07.27.2016

U.S. asset-level q/q production change
U.S. growth assets in the second quarter included the Wattenberg Field (+2%,
up ~4 Mboepd) and the Delaware Basin (+8%, up ~3 Mboepd). Notable
second quarter U.S. production declines included the Marcellus (-12%, down
~64 Mmcfpd), the Greater Natural Buttes (-11%, down ~48 Mmcfepd), the
Haynesville/Cotton Valley (-2%, down ~30 Mmcfepd), the GOM (-6%, down ~5
Mboepd) and the Eagle Ford (-1%, down ~1 Mboepd).
Wattenberg/Wolfcamp/GOM – U.S. value drivers
Wattenberg: The company plans to conduct a one-rig program and drill ~45
wells this year. Anadarko anticipates ~60 wells WOC at YE’16. Niobrara/Codell
wells commence at 700+ Boepd and should recover ~350 Mboe (~60% liquids)
for a cost of ~$2.4 million (~30% IRR).

Capital One South Coast 07.27.2016

• APC mildly underperforming E&P group despite positive print that included 1) upsized asset sale program to >$3.5B and suggestion that, in addition to debt reduction, proceeds will drive 2H16 activity acceleration in Delaware Basin, DJ Basin, and GOM tie-backs if oil prices cooperate; 2) positive updates on Delaware Basin & Shenandoah appraisal; 3) decent EPS/CFPS beat; and 4) lower-than-expected 2Q CAPEX. We expect Street/COS ests are likely stable.
• Mgmt expects sustained $60 oil environment to emerge into '17, which would encourage higher 2H16 activity in the 3 short-cycle oil opportunities noted above, but stopped short of committing to acceleration. Seems prudent given the recent oil pull back. Mgmt effectively punted the decision by ~3 months, noting greater clarity w/ 3Q results. APC has a ~500 DUCs inventory, including ~230 iDUCs (unchanged from YE15) + ~270 normal DUCs. Targeted sales are mostly dry gas assets, and we think they will include East TX & North LA assets. We still expect they will fetch ~$1.3B, driving monetizations to ~$3.8B.  


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