Anadarko's Investor Day Is Almost Here: What To Know

UBS’ William A. Featherston has maintained a Buy rating on Anadarko Petroleum Corporation APC, with a price target of $60.

During its investor call on March 1, Featherston expects the company to provide a formal capex budget for 2016 at $2.8 billion, implying a 50 percent year on year decrease, along with production guidance of a 1-4 percent year on year decline, implying 773-797 MBoed in volumes.

“While this is consistent with management commentary on its 4Q15 conference call, it implies much better capital efficiency than Street estimates of ~$3.4bn & ~768 MBoed,” the analyst said.

Based on this, Featherston expects Anadarko Petroleum to generate a free cash flow deficit during 2016 of $890 million, which would be funded by the Tronox Ltd TROX tax rebate of $959 million.

“With the Tronox tax rebate largely funding the 2016E organic FCF deficit, we expect an update on planned asset sales as well as plans to paydown or refinance debt maturities of $1.75 billion this year and $2 billion in 2017,” the UBS report pointed out.

The asset divestures are expected to be used to paydown the 2016 maturities, $6 billion in liquidity for the 2017 maturities.

Featherston also expects the company to raise its resource base, report the results of the 2015 exploration program, provide resource addition target for 2015 and a return to its long-standing F&D target.