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Imperial Capital Starts Apache Corp. (APA) at Outperform

November 19, 2014 5:10 PM EST
Get Alerts APA Hot Sheet
Price: $34.49 +2.31%

Rating Summary:
    20 Buy, 24 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Imperial Capital initiates coverage on Apache Corp. (NYSE: APA) with a Outperform rating and a price target of $92.00.

Analyst Bob Christensen said, "We see APA’s high level of drilling in its liquids-rich U.S. onshore areas, the Permian, Mid-Continent, and more recently, in the East Texas Eagle Ford, yielding strong and predictable high-margin production growth, which we believe is likely to continue for years to come. Moreover, these core North American onshore areas have been magnified as to their contribution possibilities by APA’s significant divestiture program of less predictable producing assets over the past 24 months, and further magnified on a per share basis by its large share repurchase program."

He added, " In our view, APA’s divestiture program has yielded far better proceeds and values than we initially thought, so we are highly optimistic about further restructuring moves. Those moves, which likely involve the shedding of substantial international assets, should create even more value and even greater focus on onshore North America. APA’s future growth is largely underpinned by its leading acreage position in the oil rich Permian Basin of Texas and its financial strength. We believe that both features should let it easily ride out the current downdraft in world oil prices. In our opinion, the bottom line is that APA is a value stock, highly leveraged to crude oil, where additional restructuring can unlock value and it is, in our view, a logical equity to choose in the current environment of volatile world oil prices and represents an opportunity to participate in their recovery."

For an analyst ratings summary and ratings history on Apache Corp. click here. For more ratings news on Apache Corp. click here.

Shares of Apache Corp. closed at $72.07 yesterday.



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