The Gulf of Mexico oil-spill saga is finally reaching a settlement of sorts. After 18 months of haggling and legal tussles, Anadarko Petroleum
Despite the incident, the Texas-based company made sure that its business remained fundamentally sound. A couple of months back, I mentioned the company's growing prospects following a fantastic second quarter. And now, by consenting to pay $4 billion, the company has the monkey off its back that had kept investors lying low.
Anadarko's share price did see pre-crisis levels early this year after a 50% wipeout following the incident. However, nothing really deterred management from pursuing a sound business strategy. Record liquids sales and expanding international operations backed by some hugely potential projects in the Gulf make me bullish on growth. I have a strong feeling that share prices have never really reflected the company's performance in the past 12 months.
But why all of a sudden?
So what made Anadarko relent after 18 months? Transocean
The answer might lie in the Gulf of Mexico.
No pain, no gain
Deepwater exploration figures right at the top of management's current scheme of things. The Gulf holds more oil than what most people are assuming there will be. Management expects to find more than half a billion barrels of oil buried here.
Anadarko has already signed long-term contracts with Diamond Offshore
Foolish bottom line
Management is surely anticipating something big later this year. Investors should be on the lookout for a pop in Anadarko's shares. With the company's third-quarter earnings due in a couple of weeks, the settlement seems to have come at the right time. Fools, keep your fingers crossed. If you're looking for other great stocks to profit off the energy boom, check out The Motley Fool's special report, "3 Stocks for $100 Oil." You can download it for free.
Fool contributor Isac Simon owns no shares of any of the companies mentioned in this article. The Motley Fool owns shares of Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.