HOUSTON, TX — (Marketwire) — 07/25/11 — Anadarko Petroleum Corporation (NYSE: APC)
today announced second-quarter 2011 net income attributable to common
stockholders of $544 million, or $1.08 per share (diluted). These results
include certain items typically excluded by the investment community in
published estimates. In total, these items decreased net income by
approximately $28 million, or $0.06 per share (diluted) on an after-tax
basis.(1) Cash flow from operating activities in the second quarter of 2011
was $1.837 billion, and discretionary cash flow totaled $1.838 billion.(2)
Second-Quarter 2011 Highlights
“We achieved record liquids sales volumes during the quarter, enhancing
margins and generating excellent cash flows,” said Anadarko Chairman and
CEO Jim Hackett. “Nearly all of the year-over-year volume growth was
attributable to a 34,000 barrel-per-day increase in liquids volumes. These
results contributed to strong discretionary cash flows of more than $1.8
billion — approximately $117 million above our capital expenditures, which
included a one-time cash investment of $518 million associated with the
acquisition of the Wattenberg plant.”
During the second quarter of 2011, sales volumes totaled 62 million barrels
of oil equivalent (BOE), or 685,000 BOE per day, averaging approximately
2.3 billion cubic feet of natural gas per day, 225,000 barrels of oil per
day (BOPD), and 72,000 barrels of natural gas liquids per day.
Operations Summary
The company achieved sales-volumes records during the second quarter of
2011 in Wattenberg, Greater Natural Buttes, Wamsutter (operated), Bone
Spring and the Marcellus Shale. In the Eagleford Shale, Anadarko closed its
$1.6 billion joint-venture agreement with a subsidiary of Korea National
Oil Corporation and exited the quarter with record gross sales volumes of
approximately 45,000 BOE per day in the play, an increase of approximately
25 percent from the end of the prior quarter. In Ghana, current gross
production from Jubilee is approximately 80,000 BOPD, and production
continues to ramp up with further well completions and gas injection.
In the deepwater Gulf of Mexico, Anadarko continued to advance two major
projects during the second quarter. The company finalized the Lucius
unitization agreement and recently announced plans to develop the field
with a truss spar designed for a capacity of 80,000 BOPD and 450 million
cubic feet of natural gas per day. Sanctioning is expected to occur later
this year, with first production expected in 2014. At the Caesar/Tonga
project, Anadarko completed flow and reservoir tests on three wells. Each
of the wells tested at flow rates of approximately 15,000 BOPD with
high-quality (27º API gravity) oil.
Exploration Summary
Anadarko has mobilized the Discoverer Spirit drillship to begin the
company–s 2011 exploration program in West Africa, following the
drillship–s completion of the final test at Caesar/Tonga. This program
includes the Montserrado exploration well in Liberia, as well as the
Jupiter exploration well and Mercury appraisal well in Sierra Leone. In
other deepwater exploration areas, Anadarko continued to delineate its
large natural gas discoveries in Mozambique, and to advance appraisal
activities in the Tweneboa/Enyenra area offshore Ghana. The company also
recently began appraisal drilling in the Campos Basin offshore Brazil.
As previously announced by Diamond Offshore, Anadarko signed long-term
contracts in the second quarter for two new-build drillships. The Ocean
BlackHawk is expected to be delivered in late 2013, and the Ocean
BlackHornet is expected to be delivered in early 2014. These new
state-of-the-art rigs are designed to work in up to 12,000 feet of water,
and each has been contracted for a term of five years. These new rigs will
feature enhanced drilling capabilities and safety equipment designed to
meet the highest specifications in the industry.
“We expect the next six to nine months to be the most active period of
deepwater exploration and appraisal drilling in our company–s history,”
said Hackett. “Our exploration program is designed to deliver upon our goal
of discovering more than 500 million BOE of net risked resources this year.
We are continuing to advance our deep inventory of high-impact prospects,
and the new rig agreements reinforce our long-term commitment to the safety
and success of our global exploration program.”
Financial Summary
Anadarko reported total product revenues of approximately $3.5 billion
during the second quarter of 2011, a 46-percent increase relative to the
second quarter of 2010. The company ended the second quarter of 2011 with
approximately $3.4 billion of cash on hand in addition to its five-year, $5
billion undrawn credit facility. As provided in the supplemental
information to this release, Anadarko protected an additional 450,000 MMBtu
per day of 2013 natural gas production, with three-way collars that have a
middle floor of $5.00 per MMBtu and a ceiling of $6.57 per MMBtu.
Operations Report
For more details on Anadarko–s operations, please refer to the
comprehensive report on second-quarter 2011 activity. The report is
available at on the Investor Relations page.
Conference Call Tomorrow at 9 a.m. CDT, 10 a.m. EDT
Anadarko will host a conference call on Tuesday, July 26, at 9 a.m. Central
Daylight Time (10 a.m. Eastern Daylight Time) to discuss second-quarter
results, current operations and the company–s outlook for the remainder of
2011. The dial-in number is 888.713.4205 in the United States or
617.213.4862 internationally. The confirmation number is 67183355. For
complete instructions on how to participate in the conference call, or to
listen to the live audio webcast and slide presentation, please visit
. A replay of the call will also be available on the Web
site for approximately 30 days following the conference call.
Financial Data
Eight pages of summary financial data follow, including current hedge
positions, financial guidance and supplemental production guidance.
(1) See the accompanying table for details of certain items affecting
comparability.
(2) See the accompanying table for a reconciliation of GAAP to non-GAAP
financial measures and a statement indicating why management believes the
non-GAAP financial measures provide useful information for investors.
Anadarko Petroleum Corporation–s mission is to deliver a competitive and
sustainable rate of return to shareholders by exploring for, acquiring and
developing oil and natural gas resources vital to the world–s health and
welfare. As of year-end 2010, the company had approximately 2.42 billion
barrels-equivalent of proved reserves, making it one of the world–s largest
independent exploration and production companies. For more information
about Anadarko, please visit .
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Anadarko believes that its expectations are based on
reasonable assumptions. No assurance, however, can be given that such
expectations will prove to have been correct. A number of factors could
cause actual results to differ materially from the projections, anticipated
results or other expectations expressed in this news release, including
Anadarko–s ability to commercially operate the drilling prospects
identified in this news release. See “Risk Factors” in the company–s 2010
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public
filings and press releases. Anadarko undertakes no obligation to publicly
update or revise any forward-looking statements.
Cautionary Note to U.S. Investors: Effective Jan. 1, 2010, the United
States Securities and Exchange Commission (“SEC”) permits oil and gas
companies, in their filings with the SEC, to disclose only proved, probable
and possible reserves that meet the SEC–s definitions for such terms.
Anadarko uses certain terms in this news release, such as “net risked
resources,” and similar terms that the SEC–s guidelines strictly prohibit
Anadarko from including in filings with the SEC. U.S. investors are urged
to consider closely the disclosure in Anadarko–s Form 10-K for the year
ended Dec. 31, 2010, File No. 001-08968, available from Anadarko at
or by writing Anadarko at: Anadarko Petroleum Corporation,
1201 Lake Robbins Drive, The Woodlands, Texas 77380, Attn: Investor
Relations. This form may also be obtained by contacting the SEC at
1-800-SEC-0330.
Reconciliation of GAAP to Non-GAAP Measures
Below are reconciliations of cash provided by operating activities (GAAP)
to discretionary cash flow from operations and free cash flow (non-GAAP),
and net income (loss) attributable to common stockholders (GAAP) to
adjusted net income (loss) (non-GAAP) as required under Regulation G of the
Securities Exchange Act of 1934. Management uses discretionary cash flow
from operations and free cash flow to demonstrate the Company–s ability to
internally fund capital expenditures and to service or incur additional
debt. It is useful in comparisons of oil and gas exploration and production
companies because it excludes fluctuations in assets and liabilities.
Management uses adjusted net income (loss) to evaluate the Company–s
operational trends and performance.
Anadarko Contacts
Media:
John Christiansen
832.636.8736
Brian Cain
832.636.3404
Investors:
John Colglazier
832.636.2306
Clay Gaspar
832.636.2541
Wayne Rodrigs
832.636.2305