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Oil Giant Buy/Hold Ratings: Energy Analyst

Tuesday, 22 Jun 2010 | 12:02 PM ET

The corporate casualties of the oil spill continue to mount as Moody's Investors Service downgraded Anadarko's rating to "junk" status. Philip Weiss, senior energy analyst at Argus Research Company, discussed his insights.

Junk Shot for Anadarko's Debt
Anadarko's debt was downgraded to junk bond status, with Philip Weiss, Argus Research.

Anadarko, which holds 25 percent of the leaking Gulf of Mexico oil well, is disputing its share of the spill costs with BP .

“This adds a lot of uncertainty to the situation when you try to evaluate stocks like this, because we don’t know how this is going to work out," Weiss told CNBC.

"So it’s a much higher threshold for me to put a buy rating on a stock like this,” he added.

Weiss’ firm has a “hold” rating on Anadarko and lowered the 2011 earnings forecast for the oil company to $2.90 a share from $3 a share.

“Anadarko feels pretty confident that the negligence claim against BP can hold; and if that’s the case under the operating agreement they wouldn’t be liable, but past experiences show that negligence can be difficult to prove,” he said.

Weiss also said the US government's moratorium on deep water drilling is expected to last for at least six months.

Argus' Stock Ratings:

- "Hold" ratings on Halliburton , BP and Transocean ;

- "Buy" ratings on Devon Energy and ConocoPhillips .

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Scorecard—What He Said:

  • Weiss' Previous Appearance on CNBC (Jun. 16, 2010)

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Expert Views on the Oil Spill:

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CNBC Data Pages:

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CNBC Slideshows:

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Disclosures:

Weiss does not own shares of HAL, APC, OXY, DVN or COP.

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Disclaimer

  Price   Change %Change
APC
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BP.
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COP
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DVN
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HAL
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RIG
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OXY
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AAPL
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