Credit Suisse Upgrades Anadarko Petroleum (APC) to Outperform
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Credit Suisse upgraded Anadarko Petroleum (NYSE: APC) from Neutral to Outperform with a price target of $77.00 (from $70.00).
Analyst E. Westlake commented, "At 1Q, we reduced exposure in the large cap E&P sector via HES and APC. Today, we're adding APC back into the large cap E&P portfolio. We raise our TP to $77/sh (from $70/sh) on Delaware Estimated Ultimate Recovery's (EUR's), some option value for Proven Undeveloped Reserves (PUDs) in gassy disposals, some value for Cote D'Ivoire and two extra tiebacks in the Gulf of Mexico per year. We raise our rating to Outperform from Neutral (to join PXD, CXO, DVN). We're still concerned about the oil price trajectory if OPEC don't rein in output. However, we suspect APC will continue to monetise assets to reduce the absolute level of net debt. At the same time, the message of focus on three core areas - the Delaware, Wattenberg and Deepwater Gulf of Mexico (where APC has significant infrastructure advantages) will resonate with investors. Yes, the shares could pull back into the $50's as oil falls but there seem to be higher highs ahead. Our "pause" call on APC was wrong due to operational and management execution. There is more that management can continue to do to drive the shares."
Shares of Anadarko Petroleum closed at $59.95 yesterday.
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Related EntitiesCredit Suisse, OPEC
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