The Zacks Analyst Blog Highlights: Noble Energy, Anadarko Petroleum, Royal Dutch Shell, Brown-Forman and Diageo

Jul 30, 2012, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, July 30, 2012 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Noble Energy Inc. (NYSE: NBL), Anadarko Petroleum Corporation (NYSE: APC), Royal Dutch Shell Plc. (NYSE: RDS.A), Brown-Forman Corporation (NYSE: cronym>BF.B) and Diageo plc (NYSE: cronym>DEO).


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Here are highlights from Friday's Analyst Blog:

Noble Energy to Sell Permian Assets

Oil and natural gas exploration company, Noble Energy Inc. (NYSE: NBL) inked a deal for the sale of certain oil and natural gas assets in the Permian Basin to a Texas-based, privately owned oil and natural gas company, Sheridan Holding Company II, LLC, for $320 million.

The properties up for sale are located in a major energy producing region in the basin and include 250 oil and liquid hydrocarbons wells. The production capacity of these wells is roughly 1,500 barrels of oil equivalent per day. The settlement is anticipated to be finalized in August 2012.

Noble Energy for the past several quarters has been increasingly involved in the divestiture of peripheral assets in western Oklahoma and Texas panhandle regions as well as in the North Sea, UK. The sale of the Permian resources is also a part Noble's continued long-term divestiture strategy.

The divestiture of these non-core assets will enable the company to concentrate on the development of its primary operations in the US and overseas. In addition, the gain from this sale would boost Noble's financials and add flexibility to its operations leading to a ramp in its top- and bottom-line estimates.
Noble Energy's active competitor Anadarko Petroleum Corporation (NYSE: APC) is in talks to sell some or its entire stake (36.5%) in the offshore gas fields of Mozambique to Royal Dutch Shell Plc. (NYSE: RDS.A). The company on initiation of the auction process could receive $8 billion from this sale.

Noble Energy estimates sales volumes to average 242–250 thousand barrels of oil equivalent per day (MBoe/d) in the third quarter excluding volume from discontinued operation, while its 2012 volume guidance is in the range of 236–244 MBoe/d. Noble expects exploration expenses for 2012 to be in the range of $450 million to $500 million.

The Zacks Consensus Estimates for the third quarter and full year 2012 are currently at $1.21 per share and $5.38 per share, respectively. Noble Energy holds a Zacks #3 Rank, which translates into a short-term Hold rating. 

Based in Houston, Texas, Noble Energy is an independent exploration and production (E&P) company, having high-grade hydrocarbon assets across the U.S. and several international locations. Noble Energy chiefly focuses on organic growth from exploration and development drilling activities. This is further strengthened by mergers and acquisitions.

Brown-Forman Revises Charter to Ease Split

To facilitate the smooth completion of its previously announced 3-for-2 stock split, the shareholders of Brown-Forman Corporation (NYSE: cronym>BF.B) have amended their charter to enlarge the total number of authorized shares for both Class A and Class B. Per the amendment, the charter will now authorize a total of 85 million Class A shares and 400 Class B shares.

Last month, the global producer and distributor of premium alcoholic beverages had announced its intention to split its Class A and Class B common stocks, proposing to distribute one additional share to shareholders for every two shares held. Brown-Forman will distribute the new shares under the 3-for-2 stock split in the form of a stock dividend.

Brown-Forman announced the record date for the spilt as August 3, 2012, with the shareholders receiving the additional shares on August 10. Further, the company stated that its share price will be adjusted accordingly on the New York Stock Exchange for trading beginning on August 13. This split will mark the sixth stock split in the last 35 years.

Recently, the board of directors of Brown-Forman also announced a regular cash dividend of 23.33 cents per share on a split-adjusted basis for both Class A and Class B shares.  This dividend will be paid on October 1, 2012 to shareholders of record as of September 7, 2012.

Brown-Forman's stock split reflects the company's commitment to enhance long-term value for shareholders. It also portrays the company's confidence to boost its longer-term prospects for earnings as well as cash flows.

During fiscal 2012, Brown-Forman generated $516 million of cash from operations and deployed $192 million for dividend payout, $220 million toward share repurchase, $58 million on capital expenditures and $248 million toward debt repayment.

Brown-Forman ended the fiscal with cash and cash equivalents of $338 million and long-term debt of $506 million (including the current maturities) compared with $567 million and $759 million, respectively, in fiscal 2011.

Brown-Forman possessing brands such as Jack Daniel's, Finlandia, Southern Comfort and Canadian Mist, command a strong portfolio of globally recognized brands. We believe this provides a competitive edge to the company and bolsters its well-established position in the market.

Brown-Forman is in direct competition with Diageo plc (NYSE: cronym>DEO). Currently, Brown-Forman has a Zacks #3 Rank, implying a short-term Hold rating. We maintain our long-term Neutral recommendation on the stock.

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