Houston rapper Bun B isn't the only one giving a shout-out to the Appalachians these days. On its second-quarter conference call, Anadarko Petroleum
The Marcellus is just one of a handful of resource plays that Anadarko is really starting to ramp up. The shale plays -- the Marcellus, Haynesville, and Eagle Ford -- collectively brought production growth of 75% compared with the first quarter. The Haynesville is clearly the lowest priority right now, with only one non-operated rig running at the end of the quarter. The Eagle Ford, on the other hand, is a major new focus. Anadarko likes the joint venture model so much that it's looking to cut a similar deal down in Texas.
The company can thank Chesapeake Energy
Speaking of BP, that's sort of the elephant in the room here. Anadarko, along with Mitsui, was a non-operating partner in the infamous Macondo well. As a 25% partner, Anadarko would normally be responsible for a quarter of the costs associated with the oil spill, but the company has taken the line that "this tragedy was preventable and likely the result of the operator's gross negligence and/or willful misconduct."
Anadarko shares sold off very hard in the months following the spill, with clear uncertainty about the company's potential liability. Investors, including Dan Loeb's hedge fund Third Point, have obviously gained confidence in Anadarko's financial outlook. The fact that the company landed a commitment to expand its credit facility from $1.3 billion to $5 billion certainly helps.
Anadarko obviously faces some near-term hitches in its Gulf of Mexico deepwater program, but we should see that restarted in a matter of months. In the meantime, the company has plenty of exploring to do in places like Brazil, Ghana, and Indonesia.
Alongside the recently acquisitive Apache
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Fool owns shares of Chesapeake Energy. The Fool has a disclosure policy.