Houston-based independent Anadarko Petroleum Corp. on Friday reported a 25% increase in 1Q profit on strength in oil and gas prices and better-than-expected production. It beat Wall Street estimates by 6 cents, with earnings of $490 million ($2.05/share), up from $392 million ($1.55) in 1Q2004.

Worldwide, oil and natural gas sales volumes totaled 41 MMboe, or 455,000 boe/d, which was higher than expected. Natural gas sales volumes averaged 1.454 Bcf/d, and oil sales volumes in the quarter were 177,000 bbl/d.

However, in the United States, gas volumes fell to 107 Bcf from 121 Bcf in 1Q2004. Average daily volumes were 1.18 Bcf/d, compared with 1.3 Bcf/d a year ago. In Canada, volumes fell to 24 Bcf from 36 Bcf, and daily volumes fell to 271 MMcf/d from 395 MMcf/d.

“Anadarko is a different company than we were this time a year ago,” said CEO Jim Hackett. “Our asset sales and strategic realignment have us operating from a smaller, more efficient base, which is reflected in the results we achieved this quarter. While volumes were down from last year due to the asset sales, they slightly exceeded the high end of our guidance for the quarter and actually rose about 10%, excluding the production from the properties we sold.

“Also, revenues increased and expenses decreased, providing higher net income,” said Hackett. “The improvement was further magnified by our stock repurchase program. Altogether, Anadarko delivered a 32% increase in diluted earnings per share on less than a 5% increase in revenues.”

The company continued its share repurchase program during the first quarter and bought 2.6 million shares of outstanding common stock for approximately $200 million.

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