Tags: Anadarko | player | gas | APC

Anadarko a Key Player in U.S. Gas Boom

By Constance Gustke   |   Friday, 13 Jan 2012 07:51 AM

U.S. natural gas production is quietly booming. Anadarko Petroleum (APC), the largest independent oil and natural gas producer in the United States, is becoming a key player.

The Texas outfit has amassed acreage in basins holding rich shale gas deposits. These basins can translate into abundant new energy sources for the country, say analysts.

Why? Because drilling for shale gas is cheaper, and easier to find, than oil. Not that there aren’t risks. Hydraulic fracturing, the process used to drill for shale gas, is highly controversial. Blasting through dense rock formations can cause earthquakes and foul water tables, critics charge.

But the rewards are rich. S&P analysts expect Anadarko’s shale gas production to grow up to 9 percent annually through 2014.

Anadarko also owns some deepwater oil wells, mainly in the Gulf of Mexico and in Algeria. In October, the company reached a $4 billion settlement with BP (BP) over the Macondo well explosion in the Gulf of Mexico. Anadarko owned 25 percent of the well.

Due to the BP settlement, Anadarko reported a third-quarter loss of $3.1 billion, or $6.12 per share. Oil and gas sales rose 5 percent versus a year ago, though. Anadarko CEO Jim Hackett noted free cash flow of $575 million.

Strong finances

Of the 30 analysts followed by Thomson/First Call, 11 have strong buy recommendations for Anadarko and 13 have buys, with six holds.

S&P analysts are in the buy camp. They cite Anadarko’s top-tier portfolio, strong balance sheet and production ramp-up.

The company reports next on Feb. 6.

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