Anadarko Announces Third-Quarter Results

Increases Full-Year Sales-Volumes Guidance
Anadarko Petroleum Corporation (NYSE: APC) announced third-quarter 2012 income attributable to common stockholders of $121 million, or $0.24 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 $301 million, or $0.60 per share (diluted), on an after-tax basis.(1) Cash flow from operating activities in the third quarter of 2012 was approximately $2.229 billion, and discretionary cash flow totaled $1.794 billion.(2)
Third-Quarter 2012 Highlights
Announced a 3-million-BOE (barrels of oil equivalent) increase to the midpoint of full-year sales-volumes guidance, while maintaining previous full-year capital spending expectations
Increased sales volumes by 79,000 BOE per day over the third quarter of 2011, representing a 12-percent increase
Collected an additional $501 million associated with the Algeria tax resolution
Enhanced the value of two major projects by increasing the estimated recoverable resources in Colorado’s Wattenberg Horizontal (HZ) program and Mozambique’s Golfinho/Atum complex
“Anadarko is delivering another year of strong operational results and continued cost reductions, and with this momentum, we are pleased to increase our full-year sales-volumes guidance to a new range of 265 to 267 million BOE with no corresponding increase in capital spending,” Anadarko President and CEO Al Walker said. “During the quarter, we delivered record liquids volumes of 322,000 barrels per day and safely reduced controllable costs on a per-unit basis in every category relative to the third quarter of last year. The significant cash generation year-to-date also enabled us to strengthen the balance sheet by reducing borrowings under our revolving credit facility by $1.5 billion, while maintaining approximately $2.5 billion of cash on hand at the end of the third quarter.”
Anadarko reported total sales volumes of 68 million BOE, or 739,000 BOE per day, during the third quarter. Approximately 1 million BOE of production in the Gulf of Mexico was shut in during the quarter as a result of weather-related downtime. The company achieved record liquids sales volumes during the quarter with oil volumes averaging 234,000 barrels per day and natural gas liquids averaging 88,000 barrels per day, equating to a 41,000-barrel-per-day increase in total liquids over the third quarter of 2011. Natural gas volumes averaged approximately 2.5 billion cubic feet per day.
During the quarter, Anadarko continued to ramp up activity in its Wattenberg HZ program in northeast Colorado and in the Eagleford Shale in south Texas, with these fields combining for an increase of more than 800,000 barrels of liquids sales volumes over the second quarter of this year. The Wattenberg HZ program continued to deliver rates of return exceeding 100 percent and, due to the exceptional well performance in both the Niobrara and Codell formations coupled with identified down-spacing opportunities and longer laterals, the company increased the lower end of its estimated resource range by 500 million BOE to a new range of 1.0 billion to 1.5 billion BOE.
Anadarko completed its four-well, initial appraisal program in the Golfinho/Atum complex offshore Mozambique. All four appraisal wells were successful, resulting in the partnership increasing the field’s estimated recoverable natural gas resources to a new range of 15 to 35 trillion cubic feet. In addition, the partnership completed its well-testing program in the Prosperidade complex with multiple tests at Lagosta-2. Each of three zones flowed at facility-constrained rates of around 100 million cubic feet per day (MMcf/d). Anadarko currently has two contracted drillships operating offshore Mozambique, with one conducting flow testing in the Golfinho/Atum complex and the other drilling the P?rola Negra (Black Pearl) prospect near the southern end of the Offshore Area 1 Block.
“As a result of the exceptional drilling and testing results in Mozambique to date, we have identified the resources capable of supplying in excess of 50 million tonnes per annum of LNG (liquefied natural gas). In the coming weeks we expect to announce our FEED (Front-End Engineering and Design) contractors for both onshore processing and offshore gathering, which will focus on the foundation development of two trains,” said Walker. “We look forward to continuing to work with the government of Mozambique and our partners to advance one of the world’s most significant natural gas discoveries in the last 20 years, and one that is capable of enabling Mozambique to become one of the world’s largest exporters of LNG in future years.”
Operations Report
For more details on Anadarko’s operations and exploration program, please refer to the comprehensive report on third-quarter 2012 activity. The report is available at on the Investor Relations page.