Business and Management
Submitted By Sunnnnnnny
Analysis of Apache Corporation
Date: 29/04/2013 Current Price: $73.88 Target Price: $87.25 Recommendation: Buy
◇I recommend to buy in with a target price of $87.25. The holding period return would be 18.37%(including dividend). Apache is a large multinational corporation, engaged in the energy industry. In addition, the company is very active in the acquisition market.
◇Valuation. In this report, the main method I used to value the company is DCF model with reasonably estimated data based on the company’s historical performance.
◇Main growth driver: (1) the increasing needs of oil and gas.(2) exploitation and extension of existing producing fields.(3) acquisition. source: google finance
Business Description General Information Apache Corporation, a Delaware corporation formed in 1954, is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids. Apache currently have exploration and production interests in six countries: the U.S., Canada, Egypt, Australia, the U.K. North Sea (North Sea), and Argentina. The company's proved reserves at year-end 2012 totaled 2.85 billion barrels of oil equivalent, roughly half oil and half natural gas. Apache have also been significantly active in the acquisition market for the past two years, having identified several opportunities that met our criteria for risk, reward, rate of return, and growth potential. From April 2010 through the end of 2012, Apache announced several significant acquisitions, each of which fit well with their long-term growth strategy. These properties are strategically positioned with existing infrastructure and play to the strengths that come with operating experience. The significant acquisitions and other transactions since…...