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News Releases

Anadarko Announces 2015 Capital Program And Guidance

HOUSTONMarch 3, 2015 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced its 2015 initial capital expectations and guidance, concurrent with its 2015 Investor Conference Call.

2015 INVESTOR CONFERENCE CALL HIGHLIGHTS

  • Anticipates approximately 5-percent year-over-year oil sales-volume growth in 2015, on a divestiture-adjusted basis(1)
  • Forecasts improved 2015 liquids product mix of approximately 50 percent, even with the reduction of more than 9 million net barrels of oil equivalent (BOE) of assumed ethane rejection
  • Establishes net resources of more than 1 billion BOE in the Wolfcamp Shale
  • Achieves first oil at the 80,000-barrels-of-oil-per-day Lucius spar and enhances value through new production-handling agreement
  • Announces more than $700 million of asset monetizations to date in 2015

"During 2015, we are confident in our ability to leverage our deep, high-quality portfolio of opportunities, strong balance sheet and efficient capital allocation to preserve value and maintain flexibility," said Anadarko Chairman, President and CEO Al Walker. "Few companies have accomplished operationally what Anadarko has achieved over the last five years; although, in the current market, we believe it is prudent to reduce capital investments and position the company for the future, rather than to pursue year-over-year growth. As a result, we've reduced our initial 2015 capital expectations by approximately 33 percent relative to last year, with plans to reduce our short-cycle U.S. onshore rig activity by 40 percent and defer approximately 125 onshore well completions. We have successfully delivered value during previous challenging commodity-price cycles, and I believe we have the skills, financial capacity and portfolio to deliver in this environment. Our focus continues to be on getting better, not necessarily bigger, while ensuring we are well positioned to accelerate activity as costs become more aligned with commodity prices and returns improve."

2015 INITIAL SALES-VOLUME AND CAPITAL EXPECTATIONS

 

Divestiture-Adjusted1 Sales-Volume Expectations

 

2014

2015 Productive Capacity2

2015 Initial Expectations

     

301 MMBOE

308 - 314 MMBOE

295 - 301 MMBOE

     
 

(1) "Divestiture-Adjusted" sales volumes reflect Anadarko's continuing asset base, giving effect to recent divestitures. For a reconciliation, see the table on page eight attached to this release.

(2) "Productive Capacity" is intended to represent what the portfolio could produce within the current 2015 capital budget range if the company did not elect to reject approximately 9 million BOE of ethane and choose to defer approximately 4 million BOE related to reduced U.S. onshore well completions.

 

 

 

Initial Capital Expectations ($5.4 - $5.8 Billion)*

   
     

By Cash Cycle

 

By Area

             

Short Cash Cycle

55

%

 

U.S. Onshore

60

%

Mid Cash Cycle

30

%

 

Int'l & Deepwater Operations

22

%

Long Cash Cycle

12

%

 

Int'l & Deepwater Exploration

10

%

Corporate

3

%

 

Midstream & Other

8

%

 
 

* Does not include capital investments by Western Gas Partners, LP (NYSE: WES); all percentages are approximates.

 

SHORT CASH CYCLE

Anadarko's Wattenberg Horizontal program continues to generate some of the strongest U.S. onshore returns in the industry, primarily as a result of the company's consolidated core acreage position, expansive infrastructure and minerals-interest ownership. The resilient economics of the Wattenberg field continue to make it an attractive place to invest in 2015 as it generates better than 30-percent before-tax rates of return at current strip prices. Additionally, the company plans to allocate capital toward its Eagleford Shale activity which, at current strip prices, generates before-tax rates of return of more than 20 percent.

MID CASH CYCLE

Anadarko remains committed to investing in assets that are expected to generate significant growth in the next one to three years. Among these assets is the Wolfcamp Shale in theDelaware Basin of West Texas, where the company is applying its proven integrated midstream approach to build the foundation for future growth. As a result of the company's delineation activities to date, Anadarko has established a net resource estimate of more than 1 billion BOE with more than 5,000 identified drilling locations in the heart of the Wolfcamp Shale oil play. Additionally, Anadarko is leveraging its hub-and-spoke philosophy at its Lucius spar in the deepwater Gulf of Mexico by reaching a new production-handling agreement for the nearby third-party Buckskin/Moccasin project, while continuing to advance development of the Heidelberg and TEN mega projects in the Gulf of Mexico and offshore Ghana, respectively, toward first production in 2016.

LONG CASH CYCLE

In 2015, Anadarko expects to drill nine to 12 deepwater exploration/appraisal wells focusing on play-opening exploration opportunities in ColombiaKenya and the Gulf of Mexico. Additionally, Anadarko continues to advance existing discoveries at Shenandoah in the Gulf of Mexico and Paon offshore Côte d'Ivoire toward commerciality, while continuing to progress its Mozambique LNG project.

Four pages of supplemental materials including the company's 2015 initial guidance, updated hedging positions and a reconciliation of divestiture-adjusted sales volumes are provided in the tables attached to this release.

Logo - http://photos.prnewswire.com/prnh/20141103/156201LOGO

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 2014, the company had approximately 2.86 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, please visit www.anadarko.com.

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 meet financial and operating guidance; to meet the objectives identified in this news release; to consummate the transaction described in this news release; to execute the 2015 capital program; to drill, develop and commercially operate the drilling prospects identified in this news release; to achieve production and budget expectations on its mega projects; and to successfully plan, secure necessary government approvals, finance, build and operate the necessary structure and an LNG park. See "Risk Factors" in the company's 2014 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 Investors: 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 resources," "net resource estimate," and similar terms that theSEC'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, 2014, File No. 001-08968, available from Anadarko at www.anadarko.com or by writing Anadarko at: Anadarko Petroleum Corporation1201 Lake Robbins DriveThe Woodlands, Texas 77380, Attn: Investor Relations. This form may also be obtained by contacting the SEC at 1-800-SEC-0330.

ANADARKO CONTACTS

MEDIA:
John Christiansenjohn.christiansen@anadarko.com, 832.636.8736
Stephanie Morelandstephanie.moreland@anadarko.com, 832.636.2912
Christina Ramirezchristina.ramirez@anadarko.com, 832.636.8687

INVESTORS:
John Colglazierjohn.colglazier@anadarko.com, 832.636.2306
Robin Fielderrobin.fielder@anadarko.com, 832.636.1462
Jeremy Smithjeremy.smith@anadarko.com, 832.636.1544

 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

March 3, 2015

       
 

1st-Qtr

 

Full-Year

 

Guidance

 

Guidance

                           
 

 Units

 

 Units

                           

Total Sales Volumes (MMBOE)

79

 

 

82

   

295

 

 

301

 

Total Sales Volumes (MBOE/d)

878

 

 

907

   

808

 

 

826

 
                           

Crude Oil (MBbl/d)

300

 

 

308

   

285

 

 

293

 
                           

United States

206

 

 

210

   

200

 

 

204

 

Algeria

66

 

 

68

   

63

 

 

65

 

Ghana

28

 

 

30

   

22

 

 

24

 
                           

Natural Gas (MMcf/d)

                         
                           

United States

2,675

 

 

2,725

   

2,425

 

 

2,475

 
                           

Natural Gas Liquids (MBbl/d)

                         
                           

United States

125

 

 

135

   

109

 

 

117

 

Algeria

6

 

 

8

   

4

 

 

6

 
                           
                           
 

 $ / Unit

 

 $ / Unit

Price Differentials vs. NYMEX (w/o hedges)

                         
                           

Crude Oil ($/Bbl)

(3.00)

 

 

(1.00)

   

(3.00)

 

 

(1.00)

 
                           

United States

(6.00)

 

 

(1.00)

   

(6.00)

 

 

(1.00)

 

Algeria

2.00

 

 

5.00

   

2.00

 

 

5.00

 

Ghana

 

 

2.00

   

 

 

3.00

 
                           

Natural Gas ($/Mcf)

                         
                           

United States

(0.50)

 

 

(0.25)

   

(0.60)

 

 

(0.30)

 
                           
 

 

 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

March 3, 2015

       
 

1st-Qtr

 

Full-Year

 

Guidance

 

Guidance

                           
 

 $ MM

 

 $ MM

Other Revenues

                         

Marketing and Gathering Margin

30

 

 

50

   

140

 

 

160

 

Minerals and Other

85

 

 

95

   

310

 

 

330

 
                           

Costs and Expenses

                         
 

 $ / BOE

 

 $ / BOE

Oil & Gas Direct Operating

3.80

 

 

4.00

   

3.60

 

 

4.00

 

Oil & Gas Transportation/Other

3.50

 

 

3.70

   

3.70

 

 

3.90

 

Depreciation, Depletion and Amortization

14.50

 

 

15.00

   

15.25

 

 

15.75

 

Production Taxes (% of Product Revenue)

8.0

%

 

9.0

%

 

8.5

%

 

9.5

%

                           
 

 $ MM

 

 $ MM

                           

General and Administrative

310

 

 

330

   

1,250

 

 

1,300

 

Exploration Expense

                         

   Non-Cash

80

 

 

100

   

550

 

 

600

 

   Cash

75

 

 

95

   

375

 

 

400

 

Interest Expense (net)

205

 

 

215

   

800

 

 

820

 

Other (Income) Expense

40

 

 

50

   

150

 

 

200

 
                           

Taxes

                         

Algeria (All current)

55

%

 

60

%

 

55

%

 

60

%

Rest of Company (Expect significant current-tax benefit)

10

%

 

15

%

 

25

%

 

30

%

                           
                           

Avg. Shares Outstanding (MM)

                         

Basic

507

 

 

508

   

508

 

 

509

 

Diluted

509

 

 

510

   

510

 

 

511

 
                           
                           

Capital Investment (Excluding Western Gas Partners, LP)

 $ MM

 

 $ MM

                           

APC Capital Expenditures

1,700

 

 

1,900

   

5,400

 

 

5,800

 
 

 

 

Anadarko Petroleum Corporation

Commodity Hedge Positions (Excluding Natural Gas Basis)

As of March 3, 2015

       
 

Volume

 

Weighted Average Price per MMBtu

 

(Thousand

           
 

MMBtu/d)

 

Floor Sold

 

Floor Purchased

 

Ceiling Sold

Natural Gas

             
             

Three-Way Collars 2015

635

$

2.75

$

3.75

$

4.76

               

Extendable Fixed Price -
Financial 2015*

170

$

4.17

       
 

__________________________________________________________________

*      Includes an option for the counterparty to extend the contract term to December 2016 at the same price.

 

 

 

               

Interest-Rate Derivatives

As of March 3, 2015

               
 

Instrument

Notional Amt.

Start Date

Maturity

Rate Paid

Rate Received

 
 

Swap

$50 Million

Sept. 2016

Sept. 2026

5.91%

3M LIBOR

 
 

Swap

$1,850 Million

Sept. 2016

Sept. 2046

6.05%

3M LIBOR

 
               
 

 

Anadarko Petroleum Corporation

Reconciliation of Divestiture-Adjusted Sales Volumes

               

Average Daily Sales Volumes

     

Crude Oil &

       
 

Natural Gas

 

Condensate

 

NGLs

 

Total

 

MMcf/d

 

MBbls/d

 

MBbls/d

 

MBOE/d

Quarter Ended March 31, 2014

             

U.S. Onshore

2,396

 

112

 

92

 

604

Deepwater Gulf of Mexico

275

 

46

 

6

 

98

International and Alaska

 

87

 

 

87

Divestiture-Adjusted Sales

2,671

 

245

 

98

 

789

China, Pinedale/Jonah and EOR

26

 

25

 

1

 

30

Total

2,697

 

270

 

99

 

819

               

Quarter Ended June 30, 2014

             

U.S. Onshore

2,443

 

134

 

113

 

655

Deepwater Gulf of Mexico

176

 

41

 

6

 

76

International and Alaska

 

101

 

1

 

102

Divestiture-Adjusted Sales

2,619

 

276

 

120

 

833

China, Pinedale/Jonah and EOR

1

 

15

 

 

15

Total

2,620

 

291

 

120

 

848

               

Quarter Ended Sept. 30, 2014

             

U.S. Onshore

2,339

 

145

 

124

 

659

Deepwater Gulf of Mexico

154

 

46

 

5

 

77

International and Alaska

 

98

 

1

 

99

Divestiture-Adjusted Sales

2,493

 

289

 

130

 

835

China, Pinedale/Jonah and EOR

1

 

14

 

 

14

Total

2,494

 

303

 

130

 

849

               

Quarter Ended Dec. 31, 2014

             

U.S. Onshore

2,369

 

151

 

113

 

659

Deepwater Gulf of Mexico

179

 

47

 

6

 

83

International and Alaska

 

88

 

10

 

98

Divestiture-Adjusted Sales

2,548

 

286

 

129

 

840

China, Pinedale/Jonah and EOR

1

 

14

 

 

14

Total

2,549

 

300

 

129

 

854

               

Year Ended Dec. 31, 2014

             

U.S. Onshore

2,386

 

136

 

111

 

644

Deepwater Gulf of Mexico

196

 

45

 

5

 

83

International and Alaska

 

94

 

3

 

97

Divestiture-Adjusted Sales

2,582

 

275

 

119

 

824

China, Pinedale/Jonah and EOR

7

 

17

 

 

19

Total

2,589

 

292

 

119

 

843

 

Note: EOR transaction pending

 
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