Loading data...
MENU

Investors

At Anadarko, we believe our uniquely positioned portfolio offers a compelling investment opportunity.

Anadarko Announces 2016 Capital Program And Guidance

HOUSTON, March 1, 2016 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced its 2016 initial capital expectations and guidance, concurrent with its 2016 Investor Conference Call.

2016 INVESTOR CONFERENCE CALL HIGHLIGHTS

  • Reduces year-over-year capital investments by almost 50 percent(1)
  • Expects higher-margin oil sales volumes to be flat year over year on a divestiture-adjusted basis(2)
  • Doubles Delaware Basin recoverable resource estimate to more than 2 billion barrels of oil equivalent (BOE)
  • Announces plans to monetize up to $3 billion of assets in 2016, with $1.3 billion announced or closed year to date

"In 2016, we will continue our disciplined and focused approach, preserving and building value by leveraging our best-in-class capital allocation, enhancing operational efficiencies and continuing an active monetization program," said Al Walker, Anadarko Chairman, President and CEO. "We are committed to again investing well within cash inflows from a combination of anticipated discretionary cash flow and our ongoing monetizations, with the expectation of also reducing net debt during the year. As we announced last week, we have already closed or announced monetizations totaling approximately $1.3 billion, and we expect our cash position to be further strengthened during the year through substantial cost reductions and additional identified monetization opportunities. We will also benefit from the recent action by our Board to reduce our dividend, which will provide approximately $450 million of additional cash this year."

2016 INITIAL SALES-VOLUME AND CAPITAL EXPECTATIONS

Initial 2016 Capital Expectations ($2.6 - $2.8 Billion)(1)

 

Billions

   

Billions

 

By Area

 

By Cash Cycle (E&P only)

U.S. Onshore

$

1.1

   

Short Cash Cycle

$

1.5

 

International

0.7

   

Mid Cash Cycle

0.5

 

Gulf of Mexico

0.7

   

Long Cash Cycle

0.5

 

Midstream & Other

0.2

       
 

Note: All amounts are approximates.

 

Divestiture-Adjusted(2) Sales-Volume Expectations

 
 

2016 Initial Expectations

 

2015

       

Total (MMBOE)

282 – 286

 

292

       

Oil (MBOPD)

308 – 313

 

312

       

U.S. ONSHORE
Anadarko's U.S. onshore activities will be reduced the most, by almost $2.5 billion in capital investments year over year, as the company preserves its opportunities, including in two of the highest-returning onshore assets in North America – the Delaware and DJ basins – for a more compelling price environment. The company is reducing its U.S. onshore rig count by 80 percent to five operated rigs, from an average of 25 in 2015, while focusing on its base production and retaining the flexibility to leverage its inventory of approximately 230 drilled but intentionally uncompleted wells. In the Delaware Basin, Anadarko plans to run four operated rigs, which will be directed toward delineation and lease maintenance rather than development activities. To date, the company's successful activities in this play have reduced well costs, identified additional prospective zones and doubled the estimated recoverable resources to more than 2 billion BOE. In the DJ Basin, the company expects to operate one rig, compared to seven in 2015.

GULF OF MEXICO
Anadarko's 2016 Gulf of Mexico program will focus on the company's capital-efficient tieback oil opportunities, as well as on advancing appraisal activities. By leveraging its existing infrastructure, Anadarko's tieback opportunities offer returns of more than 30 percent at today's strip prices. These activities will include tiebacks at Lucius, Caesar/Tonga and K2. In addition, Anadarko plans to advance existing discoveries through appraisal activities at Shenandoah and Phobos. One exploration well is planned at the Warrior prospect, which if successful, could be a tieback to K2.

INTERNATIONAL
In 2016, Anadarko's planned international activity will include efforts to advance its Paon oil discovery offshore Côte d'Ivoire toward potential development with one appraisal well, a drillstem test, and two exploration wells. Once activities are completed in Côte d'Ivoire, the rig is scheduled to return to Colombia to conduct additional exploration drilling activities. Offshore Ghana, the company expects to achieve first oil at the TEN complex in the third quarter of 2016. In Mozambique, Anadarko expects minimal funding in 2016 as it works three parallel paths toward a Final Investment Decision (FID) for its LNG project. These processes include securing the necessary legal and contractual framework, progressing more than 8 million tonnes per annum of off-take toward long-term sales contracts and advancing project financing.

Four pages of supplemental materials including the company's 2016 initial guidance, updated hedging positions and a reconciliation of divestiture-adjusted sales volumes are provided in the tables attached to this release.

(1) Does not include capital investments by Western Gas Partners, LP (NYSE: WES).

(2) See the accompanying table for a reconciliation of "divestiture-adjusted" or "same-store" sales volumes, which are intended to present performance of Anadarko's continuing asset base, giving effect to divestitures.

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 2015, the company had approximately 2.06 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 realize its expectations regarding performance in this challenging economic environment and meet financial and operating guidance; reduce its net debt; meet the objectives identified in this news release; consummate the transactions described in this news release and identify and complete additional transactions; execute the 2016 capital program; drill, develop and commercially operate the drilling prospects identified in this news release; achieve production and budget expectations on its mega projects; and successfully plan, secure necessary government approvals, enter into long-term sales contracts, finance, build and operate the necessary infrastructure and LNG park in Mozambique. See "Risk Factors" in the company's 2015 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 "recoverable resource," 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, 2015, File No. 001-08968, available from Anadarko at www.anadarko.com 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.

ANADARKO CONTACTS

MEDIA:
John Christiansen, john.christiansen@anadarko.com, 832.636.8736
Stephanie Moreland, stephanie.moreland@anadarko.com, 832.636.2912

INVESTORS:
John Colglazier, john.colglazier@anadarko.com, 832.636.2306
Jeremy Smith, jeremy.smith@anadarko.com, 832.636.1544
Shandell Szabo, shandell.szabo@anadarko.com, 832.636.3977

 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

March 1, 2016

         

Note: Guidance excludes 2016 sales volumes associated with pending East Chalk divestiture.

         
   

1st-Qtr

 

Full-Year

   

Guidance (see Note)

 

Guidance (see Note)

   

 Units

 

 Units

                 

Total Sales Volumes (MMBOE)

 

74

 

 

76

   

282

 

 

286

 

Total Sales Volumes (MBOE/d)

 

813

 

 

835

   

770

 

 

781

 
                 

Oil (MBbl/d)

 

311

 

 

316

   

308

 

 

313

 
                 

United States

 

229

 

 

232

   

222

 

 

225

 

Algeria

 

64

 

 

65

   

59

 

 

60

 

Ghana

 

18

 

 

19

   

27

 

 

28

 
                 

Natural Gas (MMcf/d)

               
                 

United States

 

2,250

 

 

2,290

   

2,030

 

 

2,060

 
                 

Natural Gas Liquids (MBbl/d)

               
                 

United States

 

119

 

 

123

   

117

 

 

120

 

Algeria

 

5

 

 

7

   

5

 

 

7

 
                 
                 
   

 $ / Unit

 

 $ / Unit

Price Differentials vs. NYMEX (w/o hedges)

               
                 

Oil ($/Bbl)

 

(7.00)

 

 

(2.00)

   

(7.00)

 

 

(2.00)

 
                 

United States

 

(8.00)

 

 

(3.00)

   

(8.00)

 

 

(3.00)

 

Algeria

 

(3.00)

 

 

   

(4.00)

 

 

(1.00)

 

Ghana

 

(3.00)

 

 

   

(4.00)

 

 

(1.00)

 
                 

Natural Gas ($/Mcf)

               
                 

United States

 

(0.40)

 

 

(0.15)

   

(0.40)

 

 

(0.20)

 
                 
 
 
 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

March 1, 2016

         

Note: Guidance excludes 2016 sales volumes associated with pending East Chalk divestiture.

         
   

1st-Qtr

 

Full-Year

   

Guidance (see Note)

 

Guidance (see Note)

   

 $ MM

 

 $ MM

Other Revenues

               

Marketing and Gathering Margin

 

15

 

 

35

   

145

 

 

165

 

Minerals and Other

 

45

 

 

65

   

185

 

 

205

 
                 

Costs and Expenses

               
   

 $ / BOE

 

 $ / BOE

Oil & Gas Direct Operating

 

3.00

 

 

3.15

   

3.20

 

 

3.40

 

Oil & Gas Transportation

 

3.40

 

 

3.60

   

3.55

 

 

3.75

 

Depreciation, Depletion, and Amortization

 

14.90

 

 

15.25

   

15.80

 

 

16.00

 

Production Taxes (% of Product Revenue)

 

8.0

%

 

9.0

%

 

8.0

%

 

9.0

%

                 
   

 $ MM

 

 $ MM

                 

General and Administrative

 

280

 

 

300

   

975

 

 

1,025

 

Other Operating Expense

 

25

 

 

35

   

55

 

 

65

 

Exploration Expense

               

    Non-Cash

 

60

 

 

80

   

350

 

 

450

 

    Cash

 

50

 

 

70

   

280

 

 

300

 

Interest Expense (net)

 

205

 

 

215

   

840

 

 

860

 

Other (Income) Expense

 

50

 

 

60

   

200

 

 

225

 
                 

Taxes

               

Algeria (100% current)

 

70

%

 

75

%

 

70

%

 

75

%

Rest of Company (1Q 5% current; Total Year 10% current)

 

30

%

 

40

%

 

30

%

 

40

%

                 
                 

Avg. Shares Outstanding (MM)

               

Basic

 

508

 

 

509

   

509

 

 

510

 

Diluted

 

509

 

 

510

   

510

 

 

511

 
                 
                 

Capital Investment (Excluding Western Gas Partners, LP)

 $ MM

 

 $ MM

                 

APC Capital Expenditures

 

800

 

 

900

   

2,600

 

 

2,800

 
 
 
 

Anadarko Petroleum Corporation

Commodity Hedge Positions

As of March 1, 2016

                   
         

Weighted Average Price per barrel

     

Volume (MBbls/d)

 

Floor Sold

 

Floor Purchased

 

Ceiling Sold

Oil

               

Three-Way Collars

             

2016

             
 

WTI

 

65

$

41.54

$

53.08

$

62.25

 

Brent

 

18

$

47.22

$

59.44

$

69.47

     

83

$

42.77

$

54.46

$

63.82

                   
                   
                   
           

Interest-Rate Derivatives

As of March 1, 2016

           

Instrument

Notional Amt.

Reference Period

Mandatory Termination Date

Rate Paid

Rate Received

Swap

$50 Million

Sept. 2016 - Sept. 2026

Sept. 2016

5.910%

3M LIBOR

Swap

$50 Million

Sept. 2016 - Sept. 2046

Sept. 2016

6.290%

3M LIBOR

Swap

$500 Million

Sept. 2016 - Sept. 2046

Sept. 2018

6.559%

3M LIBOR

Swap

$300 Million

Sept. 2016 - Sept. 2046

Sept. 2020

6.509%

3M LIBOR

Swap

$450 Million

Sept. 2017 - Sept. 2047

Sept. 2018

6.445%

3M LIBOR

Swap

$300 Million

Sept. 2017 - Sept. 2047

Sept. 2020

6.569%

3M LIBOR

Swap

$250 Million

Sept. 2017 - Sept. 2047

Sept. 2021

6.570%

3M LIBOR

 
 
 

Anadarko Petroleum Corporation

Reconciliation of Divestiture-Adjusted Sales Volumes

               

Average Daily Sales Volumes

 

Oil &

           
 

Condensate

 

Natural Gas

 

NGLs

 

Total

 

MBbls/d

 

MMcf/d

 

MBbls/d

 

MBOE/d

Quarter Ended March 31, 2015

             

U.S. Onshore

167

   

2,232

   

129

   

668

 

Deepwater Gulf of Mexico

46

   

221

   

6

   

89

 

International and Alaska

107

   

   

7

   

114

 

Divestiture-Adjusted Sales

320

   

2,453

   

142

   

871

 

Divestitures*

15

   

285

   

1

   

63

 

Total

335

   

2,738

   

143

   

934

 
               

Quarter Ended June 30, 2015

             

U.S. Onshore

173

   

1,976

   

122

   

625

 

Deepwater Gulf of Mexico

57

   

113

   

7

   

83

 

International and Alaska

87

   

   

6

   

92

 

Divestiture-Adjusted Sales

317

   

2,089

   

135

   

800

 

Divestitures*

1

   

265

   

1

   

46

 

Total

318

   

2,354

   

136

   

846

 
               

Quarter Ended September 30, 2015

             

U.S. Onshore

160

   

1,870

   

109

   

581

 

Deepwater Gulf of Mexico

55

   

158

   

7

   

88

 

International and Alaska

84

   

   

5

   

89

 

Divestiture-Adjusted Sales

299

   

2,028

   

121

   

758

 

Divestitures*

2

   

158

   

1

   

29

 

Total

301

   

2,186

   

122

   

787

 
               

Quarter Ended December. 31, 2015

             

U.S. Onshore

164

   

1,940

   

105

   

592

 

Deepwater Gulf of Mexico

54

   

115

   

6

   

80

 

International and Alaska

96

   

   

6

   

102

 

Divestiture-Adjusted Sales

314

   

2,055

   

117

   

774

 

Divestitures*

2

   

13

   

1

   

5

 

Total

316

   

2,068

   

118

   

779

 
               

Year Ended December 31, 2015

             

U.S. Onshore

165

   

2,003

   

116

   

615

 

Deepwater Gulf of Mexico

53

   

152

   

7

   

85

 

International and Alaska

94

   

   

6

   

100

 

Divestiture-Adjusted Sales

312

   

2,155

   

129

   

800

 

Divestitures*

5

   

179

   

1

   

36

 

Total

317

   

2,334

   

130

   

836

 
               

Includes EOR, Bossier, Powder River Basin CBM, and East Chalk (transaction pending).

 

 

SOURCE Anadarko Petroleum Corporation

TOP