Anadarko gets three downgrades after court decision, shares Down 11.5%

Anadarko Petroleum (APC) almost certainly will appeal yesterday's court ruling against it in the Tronox litigation: "We vehemently disagree with the judge's decision... We fully expect to pursue every avenue available to us through the appellate process to protect the interests of our stakeholders, once a final judgment including damages has been rendered."

The severity of the ruling for APC will come down to damages: While the judge found that the trust is entitled to recover $14.17B, APC may be able to lower the figure by $9B for offsetting costs it may have incurred from the Tronox transaction.

J.P. Morgan downgrades APC to Underweight and a $77 price target, while Citi and Global Hunter cut shares to Neutral from Buy; Credit Suisse views $65-$70 as a potential floor level valuation.

Jefferies, maintaining a Buy rating and $111 price target, believes APC could pursue more aggressive dividend/buyback moves to instill shareholder confidence that the ruling will be found excessive.


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Anadarko and Superior Energy Report 2nd Quarter Earnings

Anadarko Petroleum Corporation (NYSE: APC) today announced second quarter 2013 net income attributable to common stockholders of $929 million, or $1.83 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items increased net income by approximately $392 million, or $0.78 per share (diluted), on an after tax basis.(1) Cash flow from operating activities in the second quarter of 2013 was approximately $2.502 billion, and discretionary cash flow totaled $1.908 billion.(2)

Second Quarter 2013 Highlights

    *    Generated $290 million of adjusted free cash flow(2)
    *    Increased U.S. onshore oil volumes by almost 20,000 barrels per day over second-quarter 2012
    *    Reached milestones at four large scale oil projects in Algeria, Ghana and the Gulf of Mexico
    *    Drilled five deepwater discoveries in the Gulf of Mexico and Mozambique

"We continue to have exceptional performance from our portfolio, as evidenced by the results delivered in the second quarter of 2013," said Anadarko Chairman, President and CEO Al Walker. "Our U.S. onshore activities delivered year over year oil growth of 25 percent, averaging approximately 97,000 barrels per day during the quarter. We continued to drive significant improvements into our drilling and completions programs, and costs in each category were favorable to our expectations.

We reached milestones at four of our large global oil projects, which are advancing on schedule and on budget, and we achieved a success rate of almost 70 percent in our deepwater exploration/appraisal program, including five new discoveries. We also strengthened the balance sheet, improving our net debt to adjusted capitalization ratio(2) to 29 percent compared to 34 percent at the end of 2012."

Read the entire Anadarko earnings report

Superior Energy Services (NYSE: SPN) today announced net income of $68.6 million, or $0.43 per diluted share, on revenue of $1,159.7 million for the second quarter of 2013.

These results compare with the second quarter of 2012 net income from continuing operations of $142.8 million, or $0.90 per diluted share, and net income of $141.9 million, or $0.89 per diluted share, on revenue of $1,243.3 million.

For the six months ended June 30, 2013, the Company recorded net income of $132.3 million, or $0.82 per diluted share, on revenue of $2,295.2 million. For the six months ended June 30, 2012, the Company recorded net income from continuing operations of $213.0 million, or $1.49 per diluted share, and net income of $195.8 million, or $1.37 per diluted share, on revenue of $2,210.2 million.

David Dunlap, President and CEO of the Company, commented, "As previously announced, our decision to relocate pressure pumping equipment coupled with a slowdown in Mexico and weather in North Dakota impacted our results. However, this was partially offset by some underlying positives during the quarter including improved profit margins, increasing Gulf of Mexico activity and execution of our international growth strategy.

"We were able to slightly increase profit margins for the second consecutive quarter in the Onshore Completions and Workover segment despite downtime in pressure pumping related to equipment relocation and downtime for most services impacted by poor weather in North Dakota. This was achieved by our disciplined approach of maintaining margins rather than growing market share.

"Gulf of Mexico activity has increased at a rapid pace relative to last year with increases coming across our three business segments with operations in the Gulf. Our Gulf of Mexico revenue for the first six months of 2013 increased 34% over the first six months of 2012. Drilling Products and Services segment revenue in the first half of 2013 has increased 30% over the first half of 2012 due to increased deepwater drilling activity. In addition, our Subsea and Technical Solutions segment revenue in the Gulf is 29% higher as a result of a robust market for completion tools and products.

Finally, our international revenue for the first six months of 2013 has increased 13% over the first half of 2012 as growth plans in Brazil, Colombia and Argentina collectively performed as anticipated and in some cases, ahead of schedule."

Read the entire Superior Energy earnings report


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Anadarko Announces Second Quarter 2012 Results [APC]

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Anadarko Petroleum Corporation (NYSE: APC) today announced a second quarter 2012 net loss attributable to common stockholders of $380 million, or $0.76 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $804 million, or $1.61 per share (diluted), on an after-tax basis.(1) Cash flow from operating activities in the second quarter of 2012 was approximately $2 billion, and discretionary cash flow totaled $1.951 billion.(2)

Second Quarter 2012 Highlights

* Delivered record daily sales volumes of 742,000 barrels of oil equivalent (BOE)
* Increased oil sales volumes by approximately 20,000 barrels per day over first quarter 2012
* Generated more than $1.9 billion of discretionary cash flow from operating activities
* Discovered second major natural gas complex offshore Mozambique
* Increased estimated recoverable resources at the Gulf of Mexico Vito field to more than 300 million BOE

"Anadarko's positive momentum continued through the second quarter of 2012 with strong operating performance, delivering record sales volumes and enabling us to increase the midpoint of our full-year sales-volumes guidance by 3 million BOE without increasing capital," Anadarko President and CEO Al Walker said. "With record sales volumes and significant free cash flow during the first half of the year, our deep portfolio and efficient capital allocation continues to deliver growth and value in the current price environment. We are committed to operating within cash flow and selectively accelerating the value of longer dated projects, as we did at the Gulf of Mexico Lucius development and the Salt Creek field in Wyoming during the quarter. The execution of our strategy is expected to continue to deliver industry leading operating performance and exploration success, offering very competitive value creation opportunities."

Read the entire earnings report

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Exxon May Soar On New Potential In Mexico

Things have been looking great for Exxon Mobil (XOM) lately. Anadarko Petroleum (APC) recently indicated that Exxon may become a partner in Anadarko's Gulf of Mexico operations. Anadarko is already partnered with Plains Exploration & Production Company (PXP) on its deepwater Phobos project in the Gulf, and according to Anadarko Vice President of Investor Relations and Communications, John Colglazier, Exxon may enter the project with up to a 20% working interest, which would reduce Anadarko's interest from 50 to 30%.

In exchange, Anadarko could receive cash and a drilling carry, which would potentially cover the cost of the project's first exploration well. This would be beneficial for Exxon Mobil, and represents just one of the recent successes the company has seen lately. Below, I will show how Exxon's current position within the energy sector makes it a strong investment now.....Looking Deep for Gains

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BP Shares Surge After Anadarko Settlement

BP shares opened sharply higher Monday after the U.K. oil company reached a $4 billion out of court settlement with Anadarko related to a deadly explosion and oil spill at a U.S. offshore drilling platform.

Anadarko followed Japan's Mitsui & Co. and Weatherford International in agreeing to pay BP to settle claims over the Deepwater Horizon platform disaster, which killed 11 and led to the largest accidental marine oil spill in U.S. history. Drilling contractor Transocean's Deepwater Horizon rig had been leased by BP, while Anadarko and Mitsui also held stakes in the Macondo prospect.

Anadarko also agreed to drop its gross negligence claims against BP and transfer to BP the 25% interest it still holds in the Macondo well, which caused the devastating oil spill.

Like the Mitsui deal, BP's pact with Anadarko shelters the Houston based company from claims brought by private businesses and property owners seeking compensatory damages. But it doesn't protect Anadarko from punitive damages or penalties that might come from the U.S. government. Civil liability trials on the matter are scheduled to begin in February.....Read the entire Rigzone article.



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