UBS Reiterates Buy on Anadarko Petroleum (APC) Following Acquisition Agreement
- Stocks dip as earnings pour in, consumer discretionary lags
- UPDATE: Alphabet (GOOG) Tops Q3 EPS Views; Revs Strong
- Baker Hughes (BHI), General Electric (GE) in Partnership Talks, Not Merger Talks
- Cirrus Logic, Inc. (CRUS) Q2 Results and Guidance Beat Estimates
- Amazon.com (AMZN) Misses Q3 EPS by 26c, Offers Q4 Guidance
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
UBS reiterated a Buy rating and $69.00 price target on Anadarko Petroleum (NYSE: APC) following the company's announcement that it has agreed to acquire FCX's deepwater GoM assets for $2 billion.
Analyst William Featherston commented, "APC agreed to acquire FCX's deepwater GoM assets for $2 billion, funding the deal by issuing 35.25MM shares (8% dilution including the over-allotment). The deal adds ~80 MBoed (>80% oil) of net production, ~150 MMBoe of proved reserves, and adds ~20 tieback opportunities & >15 identified exploration prospects. The acquisition price is particularly attractive: 1.5x 2017E EBITDX and a 26% discount to WoodMac's $2.7 billion valuation for its key assets (Figure 1). The majority of the value in the assets are in two fields where APC already has an interest: Lucius where it is increasing the resource size by 33% to 400 MMBoe and Heidelberg. But the greatest attribute of this deal is APC expects the assets to generate ~$3-4bn of FCF over 2017-21 assuming $50-60/Bbl oil, implying a 150-200% payback in 5 years. This free cash flow will enable an acceleration in drilling activity in Permian & DJ boosting APC's overall growth rate."
Shares of Anadarko Petroleum closed at $57.79 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Sanchez Energy (SN) in Talks to Partner with Blackstone (BX) on Deal for Anadarko Petroleum (APC) South Texas Assets - DJ
- UPDATE: Stifel Upgrades Highwoods Properties Inc. (HIW) to Buy
- Cowen Sees the Qualcomm/NXP Semi Deal as 'Transformational' (QCOM) (NXPI)
Create E-mail Alert Related CategoriesAnalyst Comments, Mergers and Acquisitions
Related EntitiesUBS, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!