Anadarko posts smaller quarterly loss

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The FINANCIAL — Anadarko Petroleum Corporation on May 3 announced its first-quarter 2017 results, reporting a net loss attributable to common stockholders of $318 million, or $0.58 per share (diluted).

These results include certain items typically excluded by the investment community in published estimates. In total, these items increased the net loss by $12 million, or $0.02 per share (diluted), on an after-tax basis. Net cash provided by operating activities in the first quarter of 2017 was $1.12 billion, according to Anadarko.

FIRST-QUARTER HIGHLIGHTS

Increased total year-over-year sales volume by approximately 20 percent on a divestiture-adjusted basis

Achieved oil production of 353,000 barrels per day on a divestiture-adjusted basis, bolstered by record oil sales volume in the Deepwater Gulf of Mexico and Delaware Basin

Enhanced liquids product mix to 61 percent versus 53 percent year over year, contributing to significantly improved margins

Completed Eagleford and Marcellus asset divestitures for net cash proceeds of $2.8 billion, prior to final closing adjustments

“The first quarter of 2017 provides a clear picture of the power of our streamlined portfolio and the three ‘Ds’, with record oil sales volume, significantly improved margins and strong cash flow,” said Al Walker, Anadarko Chairman, President and CEO. “We have largely completed our divestiture program and ended the quarter with nearly $6 billion of cash on hand. These actions have increased our liquids product mix which, combined with the strengthening of commodity prices, substantially expanded our margins year over year. During the quarter, we continued to increase activity in the Delaware and DJ basins, adding six rigs to bring our current total to 21 across the U.S. onshore. In March, we also announced a 1.5-billion-barrel increase to our estimated net resources in the two basins, which now total more than 5 billion BOE. This proven performance, continuing efficiency gains and financial flexibility have us well positioned to deliver a compound annual oil growth rate of better than 15 percent over the next five years at current commodity prices while spending within cash inflows.”  

OPERATIONS SUMMARY

Anadarko’s first-quarter 2017 sales volume of oil, natural gas and natural gas liquids (NGLs) totaled 72 million BOE, or an average of 795,000 BOE per day. On a divestiture-adjusted basis, sales volume totaled approximately 61 million BOE, or 672,000 BOE per day.(2)

OPERATIONAL HIGHLIGHTS

During the first quarter of 2017, Anadarko continued to accelerate drilling activity in the U.S. onshore. The company achieved an all-time high for oil sales volume in the Delaware Basin, averaging approximately 31,000 barrels of oil per day. The company added five operated rigs during the quarter and has added one more subsequent to quarter-end, bringing the total number of operated rigs in the Delaware Basin to 15. The company continues to take action to establish operatorship in sections where it was not previously determined and expects these activities to result in operatorship of approximately 70 percent within the Area of Mutual Interest. In the DJ Basin, Anadarko’s sales volume averaged 242,000 BOE per day. The company added one rig, bringing its total operated rig count to six, all drilling multi-well development pads.

In the Deepwater Gulf of Mexico, Anadarko’s sales volume more than doubled year over year to approximately 160,000 BOE per day, reflecting the benefit of last December’s property acquisition from Freeport-McMoRan and the continued strong performance at Lucius and Caesar/Tonga. The company continued to advance its hub-and-spoke opportunities, with field production at K2 reaching a nine-year record.  Anadarko also drilled the first development well at Horn Mountain, encountering more than 70 net feet of oil pay, and expects to bring it on line later this year. In addition, the Calpurnia exploration well encountered nearly 60 net feet of oil pay in Miocene-aged sands. Calpurnia is expected to be tied back to one of Anadarko’s nearby operated facilities in the Green Canyon protraction area. Anadarko recently completed drilling operations at the Shenandoah-6 appraisal and sidetrack well, which did not encounter the oil-water contact in the eastern portion of the field. The company has currently suspended appraisal activity in the field while it evaluates the path forward.

Internationally, the company increased sales volume by approximately 17 percent year over year, driven by oil volumes from the TEN project offshore Ghana, which achieved first oil in August 2016. During the quarter, Anadarko also announced the Purple Angel discovery offshore Colombia, which is located approximately three miles from its previously announced Kronos discovery. Subsequent to quarter-end, the company made its third discovery offshore Colombia at the Gorgon prospect, which encountered 260-360 net feet of natural gas pay. The drillship in Colombia will be mobilized to West Africa in the second quarter to continue the company’s exploration and appraisal program offshore Côte d’Ivoire.

 

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