Anadarko Petroleum lamented low oil prices when it reportedsecond quarter net income that was about one-fifth what it was inthe same period last year. For the second quarter net incomeapplicable to common stockholders was $2.7 million Revenues were$137.6 million. By comparison, net income for the second quarter of1997 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 priceswill recover. I think it’s more important that our exploration anddevelopment drilling programs are on track to give us our bestoperating results in history. At the end of the first quarter, wehad already replaced 240% of our expected production for 1998 – andwe still have a number of potentially significant wells drilling.”

Anadarko’s gas production during the second quarter was 42.2 Bcfof gas or 463 MMcf/d. This represents a slight decrease over secondquarter 1997 gas production of 43.8 Bcf or 481 MMcf/d. The decreasein volumes is partly due to annual allowable testing in the WestPanhandle Field of Texas and in the Hugoton Embayment. Anadarko’saverage price for gas in the second quarter was $1.98/Mcf, comparedto $1.85/Mcf in the same period of 1997.

Anadarko’s gas liquids sales volumes in the second quarterincreased 52% to 1.6 MMbbl or 17 Mbbl/d compared to 1.0 MMbbl or 11Mbbl/d in the same period of 1997. Higher volumes were partlyoffset by 19% lower liquids prices, averaging $10.90/barrel in thesecond quarter, compared to $13.45/barrel in the same period of1997.

Looking on the bright side, the company made a significantdiscovery in its sub-salt exploration program. The Tanzanitediscovery is in the Gulf of Mexico at Eugene Island South AdditionBlock 346 in 314 feet of water about 75 miles offshore Louisiana.Anadarko said it believes the reservoir contains at least 140million energy equivalent barrels (EEBs) of reserves. “TheTanzanite discovery dramatically increases our domestic reservebase (524 million EEBs at year-end 1997),” Allison said. “Webelieve this could be one of the largest discoveries made in theshallow waters of the Gulf of Mexico since we discovered theMatagorda Island 622/623 Field in 1980.”

Joe Fisher, Houston

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