Contributor Model Estimates - Anadarko Petroleum (NYSE:APC)
Author: Jonathan Jankoski, Published: November 28, 2016 at 10:00pm, View on Anadarko: Neutral
Summary of Model Estimates: In my version of the Anadarko model I have adjusted the future sales price of oil and condensates downward to reflect the fact that Iraq and Iran have failed to agree with OPEC nations on output cuts. In addition, Saudi Arabia recently announced that they are considering not cutting output. With this backdrop, the probability for output cuts is likely lower than originally anticipated.
I have updated my earnings model to reflect the price estimates from the CME Group’s price quotes for crude oil futures (as of November 28, 2016) which include the following:
• December 2016: Current price of $3.287
• March 2017: $3.294 per Mcf
• June 2017: $3.261 per Mcf
• September 2017: $3.269 per Mcf
• December 2017: $3.450 per Mcf
As a result of my estimates for Oil and Natural Gas the next-twelve month Adjusted EBITDAX increased to $6.5B and the implied share price target increased to $62 which reflects a 9x Price-to-EBITDAX multiple, plus net cash per share of $9.55. Using historic monthly average returns of just over 1% with a standard deviation of 12.4% I estimate an implied price band of $53 to $72 per share.
Summary of Model Estimates: In my version of the Anadarko model I have adjusted the future sales price of oil and condensates downward to reflect the fact that Iraq and Iran have failed to agree with OPEC nations on output cuts. In addition, Saudi Arabia recently announced that they are considering not cutting output. With this backdrop, the probability for output cuts is likely lower than originally anticipated.
I have updated my earnings model to reflect the price estimates from the CME Group’s price quotes for crude oil futures (as of November 28, 2016) which include the following:
- December 2016: Current price of $46.50 per barrel.
- March 2017: $48.38 per barrel.
- June 2017: $50.49 per barrel.
- September 2017: $50.92 per barrel.
- December 2017: $51.24 per barrel.
• December 2016: Current price of $3.287
• March 2017: $3.294 per Mcf
• June 2017: $3.261 per Mcf
• September 2017: $3.269 per Mcf
• December 2017: $3.450 per Mcf
As a result of my estimates for Oil and Natural Gas the next-twelve month Adjusted EBITDAX increased to $6.5B and the implied share price target increased to $62 which reflects a 9x Price-to-EBITDAX multiple, plus net cash per share of $9.55. Using historic monthly average returns of just over 1% with a standard deviation of 12.4% I estimate an implied price band of $53 to $72 per share.
| Jonathan Jankoski Model.xlsx |
The author of this article has no financial investment or other conflict of interest related to the subject company or other companies discussed. Any views made or implied in this article represent the author’s opinions. Click here to visit Jonathan's contributor page.
