Replies to post #571 on 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.

[DewDiligence]

Inasmuch as there is no NG infrastructure in this part of Africa,
I’ll bet that APC is privately disappointed that they found NG
(rather then oil) in Mozambique. The market liked the news,
however, and pushed APC to a 12-month high. Comments?

http://finance.yahoo.com/news/Anadarko-Announces-First-bw-1637574734.html?x=0&.v=1

›Anadarko Announces First Deepwater Discovery Offshore Mozambique

Thursday February 18, 2010, 1:01 am EST

HOUSTON--(BUSINESS WIRE)--Anadarko Petroleum Corporation (NYSE: APC) today announced the Windjammer exploration well in the frontier Rovuma Basin offshore Mozambique has reached an intermediate casing point and encountered more than 480 net feet of natural gas pay in high-quality reservoir sands, with a gross column of more than 1,200 feet. To date, this well has tested one of the seven identified play types in Anadarko’s operated acreage offshore Mozambique.

“The intermediate results of the Windjammer well are positive for the partnership and the people of Mozambique,” said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. “This is true rank wildcat exploration, and to have our first deepwater exploration well result in a discovery with more than 480 net feet of pay, thus far, is a strong indication of the potential of this basin. The Windjammer discovery de-risks a substantial portion of approximately 50 leads and prospects that we’ve identified across our 2.6-million-acre position in the basin.”

To date, the Windjammer well has been drilled to a depth of approximately 14,000 feet in about 4,800 feet of water, approximately 30 miles east of the Mozambique coastline. The company anticipates drilling another 4,100 feet in this well to gain additional geological information prior to reaching total depth.

After testing the deeper objectives in the well, Anadarko plans to move the Belford Dolphin drillship to its Collier prospect less than 50 miles south-southeast of Windjammer. Anadarko also expects to drill two to four additional exploration wells in the Rovuma Basin this year, with initial well results from Windjammer and Collier determining which prospects are drilled next.

Anadarko is the operator with an approximate 43-percent paying interest in the well. Co-owners in the well are BPRL Ventures Mozambique B.V. (11.75 percent), Cove Energy Mozambique Rovuma Offshore, Ltd. (10 percent), Mitsui E&P Mozambique Area 1, Limited (23.5 percent) and Videocon Mozambique Rovuma 1 Limited (11.75 percent). Empresa Nacional de Hidrocarbonetos, ep’s 15-percent interest was carried through the exploration phase.

A map of the Windjammer discovery and Anadarko’s acreage offshore Mozambique will be available under the “Media Center/Anadarko News” tab at www.anadarko.com.‹