Anadarko Petroleum Corp., having gone through a full year of revamping its business strategy, on Friday saw its revenues climb 10% on higher prices, but said that overall production volumes fell on asset sales over the past year. The company reported net income of $506 million ($2.12/share), compared with $405 million ($1.59) in 2Q2004.

Oil and natural gas sales volumes totaled 39 MMboe in the quarter, or 428,000 boe/d. Natural gas sales volumes averaged 1.434 Bcf/d, at an average realized price of $6.25/Mcf. In the United States, gas volumes fell to 1.147 Bcf/d from 1.388 Bcf/d, while in Canada, gas volumes fell to 286 MMcf/d from 398 MMcf/d in 2Q2004.

“Operationally, our exploration and development program continues to deliver very good results on all fronts,” said CEO Jim Hackett. “Onshore North America, our existing core properties remain solid contributors, with some exciting exploration underway. Our deepwater Gulf of Mexico portfolio is growing, with first volumes from the K2 field produced during the quarter, along with the Genghis Khan discovery and good preliminary exploration results at the Knotty Head prospect.”

Hackett, who took over as CEO last year, said that the company’s restructured portfolio was delivering higher margins on stronger prices, while overall, costs fell, including a 24% decline in interest expense because of a $1.4 billion reduction in total debt compared with 2Q2004. “These factors, coupled with a 6% reduction in average outstanding shares due to our stock buy-back program, helped Anadarko deliver a 33% increase in earnings per share.”

The CEO also noted that Anadarko had improved its net debt to 22%, versus 34% a year ago.

Updating the company’s stock buy-back program, Hackett said the company acquired another 1.8 million shares in July for $160 million, bringing the total shares repurchased to 24.7 million shares for $1.7 billion, or a net average cost of $67.50/share, since the $2 billion program was authorized in June 2004.

“We are very encouraged by the success we’ve seen through midyear and expect to continue executing the refocused strategy we initiated last summer,” he said.

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