Anadarko Announces 2018 Second-Quarter Results

Anadarko Announces 2018 Second-Quarter Results

Anadarko Announces 2018 Second-Quarter Results

The FINANCIAL -- HOUSTON, July 31, 2018 /PRNewswire/ -- Anadarko Petroleum Corporation announced 2018 second‑quarter results, reporting net income attributable to common stockholders of $29 million, or $0.05 per share. These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by $249 million, or $0.49 per share, on an after-tax basis. Net cash provided by operating activities in the second quarter of 2018 was $1.23 billion.

SECOND-QUARTER 2018 HIGHLIGHTS

Increased U.S. onshore oil volumes by 47 percent on a divestiture-adjusted basis and improved per-barrel margins by almost 50 percent year-over-year

Expanded West Texas infrastructure with the successful startup of the Reeves Regional Oil Treating Facility (ROTF) during the quarter and commissioning of the North Loving ROTF subsequent to quarter end

Achieved significant advancements on the Mozambique LNG project, including new heads of agreements and expected cost reductions, with an anticipated Final Investment Decision (FID) during the first half of 2019

Completed $3.0 billion of the share-repurchase program

"During the second quarter, we delivered a 54,000 barrel-per-day increase in our U.S. onshore oil volumes over the second quarter of 2017 on a divestiture-adjusted basis, while improving our per-barrel margins(2) to nearly $31.60," said Al Walker, Anadarko Chairman, President and CEO.

"Our project-management and midstream teams have done exceptional work to safely achieve the on-time startup of our initial ROTF in West Texas. This is a major accomplishment as the Reeves ROTF and newly commissioned North Loving ROTF are catalysts for production and cash-flow growth in the second half of this year and beyond. Our Mozambique LNG project has made excellent progress, and we expect a Final Investment Decision in the first half of 2019.

"The strong operational results and actions we have taken to enhance shareholder value reinforces our strategy to deliver capital-efficient growth and generate improved returns. While we have not increased our operated activity level, the current commodity-price environment has resulted in some modest service-cost inflation, as well as an increase in non-operated activity and non-consents, which present very high-return opportunities for Anadarko," added Walker. "We have also continued to core up acreage in the Delaware and DJ basins, which has enabled us to drill longer laterals with higher working interest for enhanced returns. Accordingly, we are increasing our anticipated full-year capital-investment expectations by $250 million from previous guidance. The updated guidance excludes approximately $100 million of leasehold acquisitions in an emerging oil play in Wyoming's Powder River Basin."

OPERATING HIGHLIGHTS

Anadarko's second-quarter 2018 sales volumes of oil, natural gas and natural gas liquids (NGLs) totaled 58 million barrels of oil equivalent (BOE), or an average of 637,000 BOE per day, which was at the high end of the company's second-quarter guidance.

In the Delaware Basin of West Texas, the company's oil production achieved record levels averaging 62,000 barrels of oil per day (BOPD) for the quarter, representing an 88-percent increase over the second quarter of 2017. The quarter was highlighted by the successful startup of the Reeves ROTF in May, as well as a record number of wells turned to sales. The company also advanced its first full pad development at the Silvertip-A location in Loving County, where it has completed 12 extended-reach lateral wells targeting multiple intervals in the Wolfcamp-A formation. These wells are expected to begin producing in the second half of 2018 and will flow to the recently commissioned North Loving ROTF.

In the DJ Basin of northeast Colorado, Anadarko continues its horizontal drilling campaign featuring natural-gas powered rigs and noise-reduction technology, two enhancements that improve the compatibility of operations with local communities. During the quarter, the DJ Basin averaged net production of 261,000 BOE per day.

In the Deepwater Gulf of Mexico, Anadarko averaged 115,000 BOPD in the second quarter as it leveraged its unmatched infrastructure, including the third successful tieback to the 100-percent-owned Horn Mountain facility. Development drilling is also underway in the North Hadrian field, which will be tied back to Anadarko's Lucius spar.

Sales volumes from Anadarko's international operations in Algeria and Ghana averaged 85,000 barrels per day during the second quarter of 2018. The Anadarko-operated Mozambique LNG project continued to make significant progress in the second quarter as the company announced it anticipates being in position to take FID in the first half of 2019 for the Golfinho/Atum development within the Anadarko-operated Offshore Area 1. Additionally, the company and its contractors expect to realize substantial cost savings, with Anadarko now expecting to deliver the first two onshore liquefaction trains with 12.88 million tonnes per annum (MTPA) capacity for less than $600 per tonne.

 

FINANCIAL HIGHLIGHTS

Anadarko's second-quarter capital investments, excluding Western Gas Partners, LP (WES), were approximately $1.5 billion, and the company closed the quarter with $2.3 billion of cash on hand. After completing the $3.0 billion share-repurchase program at the end of the second quarter, Anadarko announced a $1.0 billion expansion of the share-repurchase program, as well as a $500 million expansion of its debt-reduction program to be funded by future free cash flow. These expansions raise the aggregate equity and debt-buyback programs to $5.5 billion, with the board authorization for the share repurchases extended through the end of June 2019.