Anadarko Reports
Earnings
Anadarko
reporting net income of $929 million or $1.83 per diluted share for the second
quarter of 2013, which is nearly $300M better than our estimates had been. We saw cash flow from operating activities come
in at approximately $2.502B and discretionary cash flows totaled $1.98B. These improved results were fueled by higher
onshore production of 20,000 barrels a day.
This helped push daily production figures to 750,000 barrels a day.
The
company has continued to show strength in their exploration for new
opportunities. The firm reached drilling
milestones at four large scale projects in Algeria, Ghana, and the Gulf of
Mexico. We also saw five new deep-water
discoveries in the Gulf of Mexico & Mozambique. Anadarko has had immense success in the deep-water
arena, as they have a 70% success rate in their deep-water exploration and appraisal
program.
We
continue to look for Anadarko to show strong growth and we anticipate that the
stock could move north of $100/share in the coming 6 to 9 months, with a price
target of $122.62/share at the end of 2014.
The biggest risks we see are international unrest (Middle East),
increased offshore drilling regulation, and potential oil spills. We continue to hold that Anadarko Petroleum
is a BUY and recommend a full position at its current price of $89.80.
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