Cuts

Houston-based Anadarko Petroleum Corp., the largest independent in North America, is following the lead of other energy companies, announcing last week it would reduce its capital spending this year $1 billion — down from the previously announced $3 billion — because of the downturn in the industry. The company also reduced its fourth quarter earnings forecast, saying it now expects to earn 25 cents a share; Thomson Financial/First Call analysts had predicted an average return of 36 cents.

Houston-based Anadarko Petroleum Corp., the largest independent in North America, is following the lead of other energy companies, announcing Monday it would reduce its capital spending this year $1 billion — down from the previously announced $3 billion — because of the downturn in the industry. The company also reduced its fourth quarter earnings forecast, saying it now expects to earn 25 cents a share; Thomson Financial/First Call analysts had predicted an average return of 36 cents.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

ONEOK revised downward its earnings guidance for 2001. It said net income excluding the effect of an Oklahoma Corporation Commission (OCC) charge is estimated to be about $1.20 per diluted share of common stock, which compares to Wall Street estimates between $1.35 and $1.50. Net income is estimated to be only $1.02 per diluted share of common stock including the impact of the OCC charge. The company earned $1.10 per diluted share in 2000 excluding the sale of a processing plant.

In what one analyst described as setting the pace for the energy industry, Tulsa-based Williams last week said it plans to cut capital spending by $1 billion, or 25%, next year and sell non-core assets to raise between $250 million and $750 million in a scheme to strengthen its balance sheet. Williams also plans to issue $1 billion in mandatory convertible preferred securities in 2002, all steps in a plan to retain its investment-grade credit rating.

ONEOK revised downward its earnings guidance for 2001. It said net income excluding the effect of an Oklahoma Corporation Commission (OCC) charge is estimated to be about $1.20 per diluted share of common stock, which compares to Wall Street estimates between $1.35 and $1.50. Net income is estimated to be only $1.02 per diluted share of common stock including the impact of the OCC charge. The company earned $1.10 per diluted share in 2000 excluding the sale of a processing plant.

Denbury Resources said it has reduced its projected 2002 development and exploration budget by $25 million (20%) to $95 million to adjust for the loss in potential revenue and cash flow during 2002 from its natural gas hedges with Enron Corp. and for the general decline in commodity prices.

In an effort to reach higher post merger goals, ChevronTexaco now estimates it will reduce its work force by 4,500 rather than the 4,000 announced last month. The move is part of a program designed to produce savings of $1.8 billion by March 2003 ($1.2 billion of it in six to nine months) and a 2-3% increase in return on capital employed in 2003-2004. The company also said it is expecting long-term production growth of 2.5-3% over the next five years.