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Anadarko: On Track to Meet ’07 Production Targets
A leaner Anadarko Petroleum Corp. (APC) is on track to meet its oil and natural gas production targets this year and boost output in 2008 by 5-9%, the CEO said Tuesday.
The Woodlands, TX-based independent reported a 64% drop in its quarterly earnings from a year ago, earning $503 million ($1.07/share), compared with $1.39 billion ($2.99) in 3Q2006. APC said it was hurt by higher exploration costs and falling gas prices. It also is smaller after reshaping its portfolio, which is now gas-directed, by selling U.S. assets to reduce debt after acquiring Kerr-McGee Corp. and Western Gas Resources Inc. last year (see Daily GPI, June 26, 2006).
APC’s income from continuing operations fell sharply to $516 million ($1.10/share) from $1.31 billion ($2.83) a year ago. Excluding special items for gains on asset sales, a restructuring charge and other one-time items, APC earned 70 cents/share versus $1.60 in 3Q2006. Revenue in the quarter fell almost 14% to $3.03 billion from $3.51 billion.
Since its mega-purchases, APC has completed asset sales totaling $12.7 billion on an after-tax basis in the past year, said CEO Jim Hackett.
“When we closed the acquisition in 2006 and initiated the program to optimize our portfolio, we wanted to establish a foundation of assets based on repeatability and predictability,” Hackett said in a conference call with energy analysts. “The quality of our assets and strength of our performance is evident considering the challenges we overcame during the quarter.”
With the asset sales, oil and gas production fell to 47 MMboe from 54 MMboe a year ago. Production from continuing operations was 49 MMboe. However, APC reaffirmed the midpoint of its 2007 production guidance of 191 MMboe, narrowing the range to 190-192 MMboe. The previous range had been 189-193 MMboe.
APC has “additional confidence” in its ability to generate 5-9% production growth from its retained properties in 2008 “and beyond,” Hackett said.
In addition, Hackett said the deepwater Gulf of Mexico Independence Hub is at 850 MMcf/d, working toward full capacity of 1 Bcf/d by year’s end. APC is operator. The platform’s majority stakeholder, Enterprise Products Partners LP, said 14 of its initial 15 wells are in service. Enterprise owns 80% of the platform; Helix Energy Solutions Group Inc. owns the remaining 20%.
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