Anadarko Petroleum Corp. has shifted the market's focus from "takeover" to "turnaround" by hiring veteran energy executive James T. Hackett as its new president, chief executive officer and executive chairman. Hackett, most recently the president and chief operating officer at Devon Energy Corp., has a track record of transforming underperforming companies, analysts say. "This is the best news I've heard from Anadarko in three years," says Fadel Gheit, an analyst with Oppenheimer. "...I could not think of a better person [for the job]." The market reacted mildly, but positively, to the news, closing up 55 cents at $46.62 the day of the announcement. For his part, Hackett sought to dispel the takeover rumors that have hovered about the company for the past several months, starting when former president and CEO John Seitz resigned abruptly in March. "I have made it clear to Bob Allison and the board that I expect to be here for the long haul," Hackett said. Robert J. Allison Jr., chairman, has become non-executive chairman. The 49-year-old Hackett's resume is studded with success stories, analysts say. In 1998, he was hired from Duke Energy Corp. to be chairman, president and CEO of Houston-based Seagull Energy Corp.-a "little go-nowhere company," Gheit says. Seagull was later merged with Ocean Energy, and Hackett was named chairman, president and CEO of Ocean. Analysts credit Hackett with initiating changes at Ocean that led to reduced costs, above-average production growth and a strong exploration program. The benefits were seen in an improved stock price. Ocean was swallowed in 2003 by Devon in a $5.3-billion merger that created the country's largest independent. Ocean was known for its large projects, such as the Zafiro Field in Equatorial Guinea and several deepwater projects in the Gulf of Mexico. There were a few observers who were lukewarm on this strategy, though. John P. Herrlin Jr., an analyst at Merrill Lynch, said in a report earlier in 2003 that he had taken a neutral stance toward Ocean's growth story because many of the company's large projects were nonoperated and because it had a tendency to outspend discretionary cash flow. At Anadarko, Hackett will try to lead the company out of a three-year "funk" in terms of production growth and finding, development and acquisition costs. At one time, Anadarko traded at twice the multiple of its peers in the large-cap E&P sector, but has lately traded at a discount. To do this, Hackett will need to rein in spending and focus the company on fewer assets, says Stephen Smith of independent research firm Stephen Smith Energy Associates. Allison has been leading the company in this direction already. This summer, he eliminated more than $100 million, or 15%, in total overhead costs from the company's annual cost structure, including the reduction of 400 staff positions. In addition to selling assets and cutting costs, the company ought to launch an aggressive share buyback program-some $2- to $3 billion in the next two years, Gheit says. He speculates that the stock could hit $65 a share. Hackett will have the ability to remake Anadarko in his own image, as several key members of senior management left in 2003. "Hackett has an empty sandbox. He will bring all his toys in," Gheit says.