Anadarko Petroleum Corporation (APC), Noble Energy, Inc. (NBL): Three Ways to Profit From Colorado Oil

Page 1 of 2

While the Bakken and Eagle Ford shale oil plays understandably attract the spotlight in the world of new oil production, a lesser known play in Colorado may soon make its presence felt. The Niobrara in northeastern Colorado (see map below) may contain more than 7 billion barrels of recoverable oil. Let’s look at three companies investing in this play.

Map courtesy of FrackingOil.com

Classic exploration and development

Two companies actively producing oil and natural gas in the Niobrara are Anadarko Petroleum Corporation (NYSE:APC) and Noble Energy, Inc. (NYSE:NBL). These companies are similar in that they boast multibillion dollar market capitalizations, own substantial worldwide assets, and plan to spend at least $1 billion in Colorado in the upcoming year.

Of the two, Noble Energy, Inc. (NYSE:NBL) plans the more aggressive exploration agenda. The company budgeted $1.7 billion for 2013 and anticipates a 50% increase in the number of wells for the same year. Looking ahead, Noble plans to drill 500 wells a year through 2016. Why all this activity? Noble Energy, Inc. (NYSE:NBL) estimates its properties hold over 2 billion barrels of oil. Even better, Noble calculates development costs are equal to or less than such plays as the Bakken or Eagle Ford. The company anticipates its Colorado assets generating significant cash flow in 2014.

As an investment, Noble Energy, Inc. (NYSE:NBL) represents a growth stock, and its dividend yields less than 1%. And grown it has; the stock climbed almost 50% in the past year and sells for roughly 23 times earnings. Driving these results has been an international portfolio of oil and gas assets. From the coasts of Israel, Mozambique, Equatorial New Guinea and the Gulf of Mexico, Noble Energy, Inc. (NYSE:NBL) generates oil, gas and profits for its investors. The future holds more of the same.

Anadarko Petroleum Corporation (NYSE:APC) plans to spend just over $1 billion in the Niobrara this year. Its holdings contain up to 1.5 billion barrels of oil or equivalent. With low development costs and expandable infrastructure in place, Anadarko Petroleum Corporation (NYSE:APC) believes its Colorado fields may be the single best onshore US asset the company owns. To monetize this asset, Anadarko Petroleum Corporation (NYSE:APC) plans to double the number of wells active in the Niobrara to 300 by the end of 2013.

Anadarko Petroleum Corporation (NYSE:APC) also represents a growth investment as its dividend yields less than 0.5%. The stock climbed over the past year, but lagged the growth of Noble Energy, Inc. (NYSE:NBL). Perhaps one reason for the muted enthusiasm is Anadarko’s liability connected to the Macondo oil rig explosion and oil spill. As a partner in the disastrous drilling platform, a judge has ruled Anadarko Petroleum Corporation (NYSE:APC) must face an investor lawsuit claiming the company’s CEO misled investors regarding Anadarko’s stake in the rig. Settlement costs also adversely impacted last quarter’s earnings despite improved cash flow and earnings from operations.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!