Cash and cash equivalents of the company as of Dec. 31, 2012 were $2.47 billion compared to $2.69 billion as of Dec. 31, 2011. The collection of $1 billion in connection with the Algeria exceptional tax resolution boosted the cash balance. As of Dec. 31, 2012, Anadarko had total outstanding debt of $13.26 billion compared to $15.23 billion at the end of the previous year, and the debt-to-capitalization ratio of 39% at year end was less than the 2011 year-end level of 46%. During the year, Anadarko also repaid its $2.5 billion revolving credit facility.
The Competition In Africa
Africa has been in the news mainly for the wrong reasons, such as the attack in Algeria and the trouble in Mali. However, it is evident that Africa’s importance is growing when it comes to supplying the world’s energy needs.
The recent attack on a BP plc (ADR) (NYSE:BP) operated natural gas production facility in Algeria will definitely make some companies rethink future involvement in the region. BP has said that it is committed to remaining in Algeria but is reviewing its commitment to restart operations in Libya.
One of BP’s venture partners in the Algerian facility is Statoil ASA(ADR) (NYSE:STO), which also has operations in a number of locations throughout Africa, including an important gas discovery off the coast of Tanzania. Statoil, with partner Exxon Mobil Corporation (NYSE:XOM), has made the significant Zafarani and Lavani discoveries in the Block 2 area, which could contain up to 9 trillion cubic feet of gas in place. Africa is clearly important to the future growth of Statoil.
ExxonMobil is also continuing to grow its African business. The largest producer of natural gas in America recently acquired a 75% operating interest in the Tugela South Exploration Right concession off the coast of South Africa, and also has rights to acquire 75% interests in three future blocks off of the country’s coast. The company also has the exclusive rights to study 12.4 million acres in the Deepwater Durban basin for one year.
Smaller companies like Hess Corp. (NYSE:HES) also have key operations in Africa, including Algeria and Libya. The company has additional operations off the continent’s coasts with its operations in Ghana, Equatorial Guinea, and Egypt. Hess recently found oil at its Pecan-1 well in the Deepwater Tano/Cape Three Points license off the coast of Ghana.
Conclusion
Wall Street recommendations tracked by S&P Capital IQ show that the average analyst rating on Anadarko Petroleum is outperform, with an average price target of $98.02 compared to the current price of around $83.70. With its track record of exceptional production growth, I recommend the stock if you are looking for energy exposure.
The article Behind The Ratings: The Second Biggest U.S. Independent Oil & Gas Producer originally appeared on Fool.com and is written by Jordo Bivona.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
