Anadarko Bemoans Earnings, Boasts New Field
Anadarko Petroleum lamented low oil prices when it reported
second quarter net income that was about one-fifth what it was in
the same period last year. For the second quarter net income
applicable to common stockholders was $2.7 million Revenues were
$137.6 million. By comparison, net income for the second quarter of
1997 was $13.8 million on revenues of $139 million.
"Low oil prices hurt our earnings," said Anadarko CEO Robert J.
Allison Jr. "But that's a short-term problem. We believe prices
will recover. I think it's more important that our exploration and
development drilling programs are on track to give us our best
operating results in history. At the end of the first quarter, we
had already replaced 240% of our expected production for 1998 - and
we still have a number of potentially significant wells drilling."
Anadarko's gas production during the second quarter was 42.2 Bcf
of gas or 463 MMcf/d. This represents a slight decrease over second
quarter 1997 gas production of 43.8 Bcf or 481 MMcf/d. The decrease
in volumes is partly due to annual allowable testing in the West
Panhandle Field of Texas and in the Hugoton Embayment. Anadarko's
average price for gas in the second quarter was $1.98/Mcf, compared
to $1.85/Mcf in the same period of 1997.
Anadarko's gas liquids sales volumes in the second quarter
increased 52% to 1.6 MMbbl or 17 Mbbl/d compared to 1.0 MMbbl or 11
Mbbl/d in the same period of 1997. Higher volumes were partly
offset by 19% lower liquids prices, averaging $10.90/barrel in the
second quarter, compared to $13.45/barrel in the same period of
Looking on the bright side, the company made a significant
discovery in its sub-salt exploration program. The Tanzanite
discovery is in the Gulf of Mexico at Eugene Island South Addition
Block 346 in 314 feet of water about 75 miles offshore Louisiana.
Anadarko said it believes the reservoir contains at least 140
million energy equivalent barrels (EEBs) of reserves. "The
Tanzanite discovery dramatically increases our domestic reserve
base (524 million EEBs at year-end 1997)," Allison said. "We
believe this could be one of the largest discoveries made in the
shallow waters of the Gulf of Mexico since we discovered the
Matagorda Island 622/623 Field in 1980."
Joe Fisher, Houston
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