Coming off of a turbulent week that saw its CEO resign unexpectedly, Anadarko Petroleum Corp. said last week that it has updated its first quarter 2003 financial guidance, increasing its earnings estimate to $1.35 per share (diluted) from $1.15 per share announced previously and its cash flow estimate to $3 per share from $2.60 per share.

By upwardly revising its guidance, the company continued what can be best described as a roller coaster ride over the past few weeks of good and bad news. News about Anadarko CEO John Seitz’s surprise resignation in late March followed an energetic and optimistic investor webcast, which received positive reactions from some notable analysts (see NGI, March 24; March 31).

“With the strong oil and gas prices, we’re looking for first quarter cash flow and earnings that are more than 15% above the guidance levels we issued just two months ago,” Anadarko Chairman, President and CEO Robert J. Allison, Jr. said, speaking at the 31st Annual Howard Weil Energy Conference.

Despite the upward revision, the first quarter earnings projection still falls short of Thomson First Call’s mean estimate of $1.48 a share for the company.

In addition to upping guidance, Allison also reaffirmed Anadarko’s forecast of 5% production growth for 2003 and 12% for 2004. “Our goal is double-digit production growth, which we can achieve — and also post strong financial returns,” Allison stressed. “We will continue to improve our returns and cash margins, and we will continue to work on costs.”

The executive said the fourth quarter 2003 production volumes should be about 20% higher than those of the first quarter of 2003, reflecting a 20% increase in development drilling activity planned this year. “The momentum of increasing volumes every quarter is key to the growth we expect in 2004,” he noted.

Anadarko’s aggressive exploration program has already yielded some “excellent” results, Allison said. In Canada the company has been very successful in the Saddle Hills play, where it is continuing to add gas reserves through new discoveries and grow production. Saddle Hills production has grown from 2 MMcf/d to 80 MMcf/d over the last 18 months. Anadarko also is conducting follow-up exploration this winter in the Fort Liard area of the Southern Territories to commercialize a gas discovery made in 2002.

Since resuming its Algerian exploration program last October, the company said it has made two oil discoveries on Block 404 east of the Hassi Berkine field. Four more exploration wells on Block 404 and 208 are planned this year.

In other company news, Anadarko announced that it has called for the redemption on April 15 of its Zero Coupon Convertible Debentures due March 2020. The company said it will pay $556.46 per debenture, reflecting the issue price plus accrued interest as of the redemption date, which is equivalent to $47.85 per share under the conversion provisions.

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