Anadarko Petroleum was the biggest gainer on the S&P 500 after the energy group announced a $2.5bn share buyback programme through the end of 2018.
With the Texas-based company’s current market cap of approximately $25bn, the buybacks would represent approximately 10 per cent of Anadarko’s current outstanding common shares, according to the announcement made after the market closed on Wednesday.
The company set an initial target of making $1bn in share repurchases before the end of 2017.
“We believe this is a very attractive use of our cash given the value of our assets and the highly accretive nature of this programme,” said Al Walker, Anadarko’s chairman and chief executive.
The news sent Anadarko’s shares up more than 7 per cent by midday on Thursday to $48.02, putting them on track for their biggest one-day gain since November.
The boost came after an otherwise dim year for Anadarko, which — like other major US oil companies — has seen its share price pressured by lower crude prices. Year-to-date, its shares are down about 30 per cent, according to Thomson Reuters data.
The buyback programme won praise from Drexel Hamilton analyst Robert Christensen, who also pointed to its “strong balance sheet”, relatively high margins and $6bn in cash.
He said in a note that the buybacks were a “positive signal that (Anadarko) remains focused on creating value not just through the drill bit and reserve and production growth or M&A at any price”.
Mr Christensen — who reiterated his “buy” recommendation and target share price of $100 — said the move also underscored that other top-tier exploration and production companies have alternatives for their capital rather than pursuing a “one-sided strategy” of “merely drilling for growth’s sake”, particularly if commodity prices fall.
“[A] two-sided strategy to use cash and return it to shareholders when possible is better,” he added.
Despite Anadarko’s advance, major US stock indices were trading lower by lunchtime in New York. The S&P 500 was down 0.2 per cent to 2,504.77 while the Dow Jones Industrial Average was off 0.1 per cent to 22,393.83. Meanwhile, the Nasdaq Composite declined 0.4 per cent to 6,433.97.
Blue Apron shares rallied as much as 9 per cent to $5.68 before trimming those gains to trade about 1.5 per cent higher to $5.30.
Shares in the meal kit delivery service were boosted after Albertsons said on Wednesday afternoon that it would buy Plated, which launched in 2012, raising speculation that Blue Apron could be the next meal kit targeted for a takeover.
Albertsons operates stores under numerous brand names including Safeway, Vons and its eponymous brand.
Nvidia shares stumbled 4 per cent to $178.27 following reports that electric automaker Tesla was working with rival Advanced Micro Devices to develop an autonomous driving technology chip.
AMD shares, which had jumped earlier in the session, were trading roughly flat at $13.76.
Shares in Eldorado Gold rose nearly 3 per cent to $2.27 after the miner said it had entered into “constructive dialogue” with the Greek government and postponed its decision to freeze its investment in Greece.
The company had previously threatened to suspend operations after quarrelling over delayed approvals for mine developments.
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