Mad Money

Cramer Calls Anadarko Up to Majors

On Tuesday, Cramer reiterated his buy call on Anadarko Petroleumafter its hard-hitting investor conference call today. The Mad Money host thinks APC doesn’t get enough credit from Wall Street and is widely viewed as a relatively small independent oil and gas producer.
But the company “belongs with the likes of Chevron and OccidentalPetroleum,” he said, “and should be called a major.”

According to the call Anadarko expects to achieve compound annual production growth of 7 percent to 9 percent over the next five years, which he thinks will be better than what Conoco, Chevron, Marathon Oil or Occidental. And if APC’s reserves reach 3 billion barrels of oil equivalent by the end of 2014, then that would put the company in the same league as Occidental.

Exploring the Possibilities

The company now produces more oil than natural gas, and it’s added three mega projects to the mix. Plus, the company has a huge join venture with Mitsui for 32.5 percent of Anadarko’s acreage in the Marcellus Shale. This is at a price, Cramer said, that's about double what we've seen in other recent transactions.

For this reason, Cramer thinks APC could be traded more like OXY, which would put the company at $117 a share, or 65 percent higher than where it is right now.

So how will all of these new developments affect Anadarko’s future? To answer that question and more, the Mad Money host talked with CEO Jim Hackett. Watch the video for the full interview.

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