Anadarko Petroleum Corporation (APC)

[Timothy Smith]

Anadarko is a large international oil and gas company which has major operations in the U.S., Africa, and elsewhere. The company is known for its deepwater expertise and has an offshore presence in Brazil, the Gulf of Mexico, and Africa. In the U.S. Anadarko has large gas reserves in the Rockies (Utah, Wyoming, and Colorado),Texas (Eagle Ford Shale), and Appalachia (Marcellus shale).

What makes Anadarko especially exciting from a natural gas perspective is its recent massive natural gas discoveries offshore Mozambique. The company is also planning an onshore LNG project in Mozambique. Once the gas is on an LNG carrier it can be shipped worldwide to the most profitable markets.

Anadarko is profitable now thanks to its oil and condensate production. The company can afford to wait until gas markets improve. Anadarko's 2012 third quarter saw revenue up 4%. Operating income also was up but the company's Deepwater Horizon settlement costs weighed on results and discretionary cash flow from operations was down. Yahoo finance shows a forward P/E of 18.5 and a trailing P/E of 20.