Anadarko Jumps on Natural Gas Discovery
NEW YORK (
) -- Shares of
Anadarko Petroleum
(APC) - Get Report
surged more than 5% on Monday after the company more than doubled the estimate of its biggest natural gas discovery to date.
The energy company said the successful results of its Barquentine-3 appraisal well offshore Mozambique expands "the estimated recoverable resource range to 15 to 30+ trillion cubic feet (Tcf) of natural gas."
Anadarko makes its biggest natural gas discovery to date in Mozambique. |
Philip Weiss of Argus Research wonders if the discovery means the project may be too big for Anadarko to handle alone.
Though "anything that helps confirm the size of a resource is helpful," Weiss said, it also raises the question of whether Anadarko will look to bring in other partners with capital. Post-production for this area is expected to be around 2017-2018, he said, and Anadarko is typically part of deepwater projects that are closer to being brought to market.
For companies such as
Chevron
(CVX) - Get Report
,
BP
(BP) - Get Report
and
Exxon
(XOM) - Get Report
with deeper pockets, tying up capital for six years doesn't mean the same thing as it does for Anadarko, Weiss noted. Anadarko had $3.05 billion in a net attributable loss in the third quarter. Exxon reported $10.3 billion in third-quarter earnings.
On the plus side, being one of the first companies to get into this area means Anadarko should benefit from lower acreage costs.
Weiss has a hold rating on Anadarko, citing valuation concerns and higher expenses than its peers. The stock finished up 5.5% at $75.77 in Monday's regular session.
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Written by Alexandra Zendrian in New York
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