The Rising Influence of Rising Affluence

[marthambles]

APC

Dew, apropos of your valuation concerns, fwiw Barclay's just raised its rating with a price target of 82:


?? Upgrading APC shares to 1-OW from 2-EW. Strong development pipeline likely to lead to superior growth
through '16. Despite growth potential APC multiple ~5% above group avg.
?? Expect prod'n to grow 6%/yr from 2010-2016 based on identified projects. Use of free cash flow of over $1
bil/year could boost growth to ~10%/yr (See Fig. 1). Peers delivered 4-5% historically.
?? '08/'09 debt-adjusted per share (DAPPs) growth 15% and 18%, 2010 likely to be flat or slightly down. Q4-10
start of Jubilee, Caesar Tonga in '11 could put APC on growth path.
?? Solid development pipeline: close to 600mmboe (net) of new proj's identified -- almost 3x annual volumes.
Begins w/Jubilee Q42010.
?? Exciting expl'n potential: ~30 deep-water expl'n/appraisal wells in '10.
?? New shale plays -- Marcellus, Eagleford & Haynesville offer 22 Tcfe of upside potential.
?? Catalysts - 'Windjammer' offshore Mozambique due soon. Also,Vito in GOM & Wahoo-1 (Brazil).
?? APC reports Q409 on 2/01. Focus likely to be expl'n portfolio. Mid-Feb guidance likely for flat '10 prod'n and
negative FCF (w/ $5-5.5 bil of cap-ex)
?? APC at 6.1x debt-adj CF on '11E w/group at 5.8x.