Anadarko Announces Third-Quarter 2013 Results

Anadarko Announces Third-Quarter 2013 Results

Anadarko Petroleum Corporation (NYSE: APC) today announced third-quarter 2013 net income attributable to common stockholders of $182 million, or $0.36 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 $389 million, or $0.77 per share (diluted), on an after-tax basis.(1) Cash flow from operating activities in the third quarter of 2013 was approximately $1.779 billion, and discretionary cash flow totaled $2.020 billion.(2)

Third-Quarter 2013 Highlights

Announced $2.64 billion transaction for the sale of a 10-percent working interest in Mozambique’s Offshore Area 1
Achieved record U.S. onshore sales volumes of approximately 590,000 barrels of oil equivalent (BOE) per day
Delivered 30,000-BOE-per-day growth in the Wattenberg horizontal program, more than doubling year-over-year sales volumes
Reached project milestones with the installation of the Lucius spar in the Gulf of Mexico and the initiation of oil production from the second El Merk train in Algeria
Increased activity in the Delaware Basin Wolfcamp play in West Texas

“We continue to demonstrate our commitment to value acceleration and portfolio management,” said Al Walker, Anadarko Chairman, President and CEO. “During the third quarter, we announced the $2.64 billion monetization of a portion of our working interest in Mozambique, and more recently, announced a strategic acreage exchange in the Wattenberg field that is expected to enhance our operating efficiencies and concentrate our core acreage position near our operated infrastructure. In addition, we expanded our ownership position in the emerging Shenandoah Basin of the deepwater Gulf of Mexico by more than doubling our working interest in the Coronado discovery. We also ramped up Wolfcamp activity in West Texas, which continued to deliver high liquids yields and strong initial production rates.”

Operations Summary
During the third quarter, Anadarko increased U.S. onshore sales volumes by approximately 61,000 BOE per day over the third quarter of 2012, which includes an approximate 16-percent increase in liquids volumes. The Wattenberg horizontal program, where Anadarko more than doubled sales volumes over the third quarter of 2012, was a significant contributor to this growth. The company also achieved substantial growth in the Eagleford Shale in South Texas and the liquids-rich East Texas horizontal development.

Anadarko also increased activity in the Wolfcamp play in the Delaware Basin of West Texas during the quarter, currently running six operated rigs, compared to none in the third quarter of 2012. Wolfcamp results have been very encouraging with six wells now on production. Each well has demonstrated initial production rates of between 1,000 and 1,600 BOE per day of gross processed production with oil comprising more than 70 percent of the product mix.

Mega-Project Summary
Anadarko installed the 80,000-barrels-of-oil-per-day (BOPD) Lucius spar on location in the deepwater Gulf of Mexico in August. The company initiated well-completion activities at Lucius during the quarter, and the project remains on schedule, with first oil production expected during the second half of 2014. Leveraging a design-one, build-two strategy, Anadarko progressed construction on the hull of the 80,000-BOPD Heidelberg spar, which is now nearly 50-percent complete. Heidelberg remains on schedule for initial oil production anticipated in 2016.

In Algeria, Anadarko and its partners achieved initial oil production from the second El Merk train and continued to advance the third facility, which is on schedule to commence production during the fourth quarter of 2013.

Exploration Summary
Anadarko drilled two successful appraisal wells in Mozambique during the third quarter. The Golfinho-5 and Golfinho-6 wells encountered approximately 330 net feet and approximately 240 net feet of natural gas pay, respectively. Both wells appear to be in static communication with the rest of the Golfinho field. The Golfinho appraisal program is expected to be completed this year.

In the Gulf of Mexico, Anadarko enhanced its working interest in the Shenandoah Basin by increasing its stake in the Coronado discovery from 15 to 35 percent. Anadarko will assume operatorship of Coronado after the next appraisal well is drilled.


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