In the months following the 2010 Gulf oil spill, BP
I told you Anadarko wouldn't land in a ditch and that there was plenty of upside as of early August. Still, the shares' surge has surprised even me.
Once the Macondo well was killed in the fall, investor nerves became much less frayed, and Anadarko staged a dramatic recovery. Shares topped their pre-spill levels by the end of the year, albeit with an assist from the Daily Mail, which floated the rumor of a takeover by BHP Billiton
With the shares at $80, it looks as if Mr. Market has gone from pricing in a nearly certain financial crunch at the firm, to a near-certain avoidance of one. Say what you want about this fickle fellow, but he rarely lacks conviction.
Anadarko's Gulf of Mexico operations are obviously hampered by the "permitorium" preventing companies from snagging exploratory well permits from the federal government, but the firm is firing on most cylinders today. The year-end results are in, indicating strong results in emerging onshore plays like the Eagle Ford and the Marcellus. Anadarko claims it is the largest Eagle Ford producer, with gross production of 27,000 barrels of oil equivalent per day. Offshore exploration yielded a 60% success rate in 2010, with particularly strong results in East African nations such as Mozambique.
The only real disappointment appears to be the start-up delay at the Caesar/Tonga complex -- co-owned by Statoil
I've long been a fan of Anadarko and believe that it will continue to do well by investors over the long haul. That said, the shares look to be in the ballpark of fairly valued, and I'd prefer to wait for Mr. Market's next mood swing before taking a swing at this solid stock.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.