Anadarko Announces First-Quarter 2015 Results

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Increases Midpoint of Full-Year Sales-Volume Guidance by 5 Million BOE

HOUSTON, May 4, 2015 /PRNewswire/ -- Anadarko Petroleum Corporation APC today announced its financial and operating results for the first quarter of 2015, including a first-quarter net loss attributable to common stockholders of $3.268 billion, or $6.45 per share (diluted). The net loss includes certain items typically excluded by the investment community in published estimates, which in aggregate decreased net income by $2.903 billion or $5.73 per share (diluted) on an after-tax basis.(1) Net cash used in operating activities in the first quarter of 2015 was $4.504 billion, which included the $5.2 billion Tronox settlement payment. Discretionary cash flow from operations totaled $1.495 billion.(2)             

FIRST-QUARTER 2015 HIGHLIGHTS

  • Delivered record sales volumes, highlighted by year-over-year growth of more than 130,000 barrels of oil equivalent (BOE) per day on a divestiture-adjusted basis(3)
  • Reduced operating expense per BOE by 17 percent over the first quarter of 2014
  • Ramped production rates toward capacity at the Lucius facility in the Gulf of Mexico
  • Discovered significant oil accumulation at the Yeti prospect in the Gulf of Mexico
  • Announced divestiture of enhanced oil recovery (EOR) assets in Wyoming

"The significant cost savings, outstanding well performance and ongoing efficiency gains we achieved during the first quarter enabled Anadarko to deliver higher sales volumes for lower costs," said Al Walker, Anadarko Chairman, President and CEO. "Our teams did an exceptional job of moderating our base production decline, while reducing our lease operating expense and working with our service providers to further drive down costs during the quarter. These actions have enhanced the overall efficiency of the portfolio, further lowered our 2015 maintenance capital requirements, and enabled us to increase our full-year sales-volume guidance and lower our capital expectations. I believe the results to date demonstrate we are taking the appropriate actions to preserve value, maintain flexibility and deliver differentiating success."

OPERATIONS SUMMARY
Anadarko's first-quarter sales volumes of natural gas, crude oil and natural gas liquids (NGLs) totaled a record 83 million BOE, or an average of 920,000 BOE per day, on a divestiture-adjusted basis.(3)

Anadarko's U.S. onshore activities continued to achieve strong results and deliver additional cost savings, while enhancing efficiencies in its primary operating areas. In the Wattenberg field, Anadarko delivered a sales-volume increase of more than 85,000 BOE per day year over year and an increase of more than 20,000 BOE per day sequentially over the fourth quarter of 2014, while lowering drilling and completion costs to approximately $3.4 million from $4.0 million per well. In the Eagleford Shale, Anadarko continued to realize strong performance from new wells, which contributed to a new gross processed production record of more than 275,000 BOE per day, while reducing average drilling costs per well by 14 percent from the fourth quarter of 2014. In the Wolfcamp Shale, the company announced its successful delineation activities established a net resource estimate of more than 1 billion BOE in the play with more than 5,000 identified drilling locations. Activities in the Wolfcamp Shale continued to be focused on applying Anadarko's proven integrated midstream approach to build the foundation for future growth.

Anadarko continued to successfully ramp up production at the Lucius spar in the deepwater Gulf of Mexico toward its design rate of 80,000 barrels of oil per day. Progress also continued on the Heidelberg project, which remains on schedule for first oil in mid-2016. Topsides fabrication is almost 85-percent complete, and the spar hull is expected to sail to location in the second quarter of this year. Also in the Gulf of Mexico, and subsequent to quarter end, an oil discovery was announced at the non-operated Yeti prospect in Walker Ridge block 160. Anadarko owns a 37.5 percent working interest in the discovery.

OPERATIONS REPORT
For details on Anadarko's operations and exploration program, including detailed tables illustrating divestiture-adjusted information, please refer to the comprehensive report on first-quarter 2015 activity. The report is available at www.anadarko.com.

CONFERENCE CALL TOMORROW AT 8 A.M. CDT, 9 A.M. EDT
Anadarko will host a conference call on Tuesday, May 5, 2015, at 8 a.m. Central Daylight Time (9 a.m. Eastern Daylight Time) to discuss first-quarter results, current operations and the company's outlook for the remainder of 2015. The dial-in number is 877.299.4454 in the United States or 617.597.5447 internationally. The confirmation number is 54679117. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will be available on the website for approximately 30 days following the conference call.

FINANCIAL DATA
Nine pages of summary financial data follow, including current hedge positions and updated financial and production guidance.

(1) See the accompanying table for details of certain items affecting comparability.

(2) See the accompanying table for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measures provide useful information for investors.

(3) 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 recent 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 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 realize its expectations regarding performance in this challenging economic environment and meet financial and operating guidance, timely complete and commercially operate the projects and drilling prospects identified in this news release, and achieve production and budget expectations. 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 resource estimate," 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, 2014, 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
Christina Ramirez, christina.ramirez@anadarko.com, 832.636.8687

INVESTORS:
John Colglazier, john.colglazier@anadarko.com, 832.636.2306
Robin Fielder, robin.fielder@anadarko.com, 832.636.1462
Jeremy Smith, jeremy.smith@anadarko.com, 832.636.1544

 

Anadarko Petroleum Corporation

Certain Items Affecting Comparability




Quarter Ended March 31, 2015



Before


After


Per Share

millions except per-share amounts


Tax


Tax


(diluted)

Total gains (losses) on derivatives, net, less net cash from settlement of commodity derivatives*


$

(243)



$

(153)



$

(0.30)


Gains (losses) on divestitures, net


(334)



(252)



(0.50)


Impairments, including unproved properties


(3,718)



(2,353)



(4.64)


Early termination of rig


(50)



(50)



(0.10)


Third-party well and platform decommissioning obligation


(22)



(14)



(0.03)


Interest expense related to Tronox settlement


(5)



(3)



(0.01)


Change in uncertain tax positions (FIN 48)




(78)



(0.15)




$

(4,372)



$

(2,903)



$

(5.73)


*

For the quarter ended March 31, 2015, this includes $(37) million related to commodity derivatives, $(205) million related to other derivatives, and $(1) million related to gathering, processing, and marketing sales.      





Quarter Ended March 31, 2014



Before


After


Per Share

millions except per-share amounts


Tax


Tax


(diluted)

Total gains (losses) on derivatives, net, less net cash from settlement of commodity derivatives*


$

(363)



$

(230)



$

(0.46)


Gains (losses) on divestitures, net


1,459



942



1.87


Impairments


(3)



(2)




Tronox-related contingent loss


(4,300)



(4,018)



(7.97)




$

(3,207)



$

(3,308)



$

(6.56)




*

For the quarter ended March 31, 2014, this includes $(123) million related to commodity derivatives, $(238) million related to other derivatives, and $(2) million related to gathering, processing, and marketing sales.


Reconciliation of GAAP to Non-GAAP Measures


Below are reconciliations of net income (loss) attributable to common stockholders (GAAP) to adjusted net income (loss) (non-GAAP), cash provided by operating activities (GAAP) to discretionary cash flow from operations (non-GAAP), as well as free cash flow (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management uses adjusted net income (loss) to evaluate the Company's operational trends and performance.



Quarter Ended


Quarter Ended


March 31, 2015


March 31, 2014


After


Per Share


After


Per Share

millions except per-share amounts

Tax


(diluted)


Tax


(diluted)

Net income (loss) attributable to common stockholders

$

(3,268)



$

(6.45)



$

(2,669)



$

(5.30)


Less certain items affecting comparability

(2,903)



(5.73)



(3,308)



(6.56)


Adjusted net income (loss)

$

(365)



$

(0.72)



$

639



$

1.26


 

Anadarko Petroleum Corporation

Reconciliation of GAAP to Non-GAAP Measures


Management uses discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes certain fluctuations in assets and liabilities and current taxes related to certain items affecting comparability. Management uses free cash flow to demonstrate the Company's ability to internally fund capital expenditures and to service or incur additional debt.



Quarter Ended


March 31,

millions

2015


2014

Net cash provided by (used in) operating activities

$

(4,504)



$

1,729


Add back




Increase (decrease) in accounts receivable

(357)



266


(Increase) decrease in accounts payable and accrued expenses

283



63


Other items—net

608



(55)


Tronox settlement payment

5,215




Certain nonoperating and other excluded items

22




Current taxes related to asset monetizations

228



520


Discretionary cash flow from operations

$

1,495



$

2,523




Quarter Ended


March 31,

millions

2015


2014

Discretionary cash flow from operations

$

1,495



$

2,523


Less capital expenditures*

1,822



2,568


Free cash flow**

$

(327)



$

(45)




Includes Western Gas Partners, LP (WES) capital expenditures of $156 million for the quarter ended March 31, 2015, and $170 million for the quarter ended March 31, 2014.

**

Free cash flow for the quarter ended March 31, 2015, includes a $561 million current tax benefit associated with the Tronox settlement.



Presented below is a reconciliation of total debt (GAAP) to net debt (non-GAAP). Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.





March 31, 2015








Anadarko




Anadarko


WGP*


excluding

millions



Consolidated


Consolidated


WGP

Total debt



$

16,865



$

2,533



$

14,332


Less cash and cash equivalents



2,308



60



2,248


Net debt



$

14,557



$

2,473



$

12,084

















Anadarko






Anadarko


excluding

millions





Consolidated


WGP

Net debt





$

14,557



$

12,084


Total equity





18,934



16,332


Adjusted capitalization





$

33,491



$

28,416
















Net debt to adjusted capitalization ratio








43%




43%




*

Western Gas Equity Partners, LP (WGP) is a publicly traded consolidated subsidiary of Anadarko and WES is a consolidated subsidiary of WGP.

 

Anadarko Petroleum Corporation

(Unaudited)



Quarter Ended

Summary Financial Information

March 31,

millions except per-share amounts

2015


2014

Consolidated Statements of Income




Revenues and Other




Natural-gas sales

$

641



$

1,217


Oil and condensate sales

1,419



2,424


Natural-gas liquids sales

232



386


Gathering, processing, and marketing sales

293



311


Gains (losses) on divestitures and other, net

(264)



1,506


Total

2,321



5,844


Costs and Expenses




Oil and gas operating

296



313


Oil and gas transportation and other

361



266


Exploration

1,083



299


Gathering, processing, and marketing

254



252


General and administrative

310



298


Depreciation, depletion, and amortization

1,256



1,124


Other taxes

182



314


Impairments

2,783



3


Deepwater Horizon settlement and related costs

4




Total

6,529



2,869


Operating Income (Loss)

(4,208)



2,975


Other (Income) Expense




Interest expense

216



183


(Gains) losses on derivatives, net

152



453


Other (income) expense, net

47



1


Tronox-related contingent loss

5



4,300


Total

420



4,937


Income (Loss) Before Income Taxes

(4,628)



(1,962)


Income Tax Expense (Benefit)

(1,392)



664


Net Income (Loss)

(3,236)



(2,626)


Net Income (Loss) Attributable to Noncontrolling Interests

32



43


Net Income (Loss) Attributable to Common Stockholders

$

(3,268)



$

(2,669)


Per Common Share




Net income (loss) attributable to common stockholders—basic

$

(6.45)



$

(5.30)


Net income (loss) attributable to common stockholders—diluted

$

(6.45)



$

(5.30)


Average Number of Common Shares Outstanding—Basic

507



504


Average Number of Common Shares Outstanding—Diluted

507



504






Exploration Expense




Dry hole expense

$

29



$

121


Impairments of unproved properties

980



77


Geological and geophysical expense

22



43


Exploration overhead and other

52



58


Total

$

1,083



$

299


 

Anadarko Petroleum Corporation

(Unaudited)



Quarter Ended

Summary Financial Information

March 31,

millions

2015


2014

Cash Flows from Operating Activities




Net income (loss)

$

(3,236)



$

(2,626)


Adjustments to reconcile net income (loss) to net cash

   provided by (used in) operating activities




Depreciation, depletion, and amortization

1,256



1,124


Deferred income taxes

(1,198)



46


Dry hole expense and impairments of unproved properties

1,009



198


Impairments

2,783



3


(Gains) losses on divestitures, net

334



(1,459)


Total (gains) losses on derivatives, net

152



461


Operating portion of net cash received (paid) in settlement

   of derivative instruments

91



(98)


Other

45



54


Changes in assets and liabilities




Deepwater Horizon settlement and related costs

4




Tronox-related contingent liability

(5,210)



4,300


(Increase) decrease in accounts receivable

357



(266)


Increase (decrease) in accounts payable and accrued

   expenses

(283)



(63)


Other items—net

(608)



55


Net Cash Provided by (Used in) Operating Activities

$

(4,504)



$

1,729






Capital Expenditures

$

1,822



$

2,568




March 31,


December 31,

millions

2015


2014

Condensed Balance Sheets




Cash and cash equivalents

$

2,308



$

7,369


Accounts receivable, net of allowance

2,174



2,527


Other current assets

683



1,325


Net properties and equipment

38,270



41,589


Other assets

2,998



2,310


Goodwill and other intangible assets

6,540



6,569


Total Assets

$

52,973



$

61,689


Other current liabilities

5,134



4,934


Deepwater Horizon settlement and related costs

94



90


Tronox-related contingent liability



5,210


Long-term debt

16,365



15,092


Deferred income taxes

7,521



9,249


Other long-term liabilities

4,925



4,796


Stockholders' equity

16,332



19,725


Noncontrolling interests

2,602



2,593


Total Equity

$

18,934



$

22,318


Total Liabilities and Equity

$

52,973



$

61,689


Capitalization




Total debt

$

16,865



$

15,092


Total equity

18,934



22,318


Total

$

35,799



$

37,410


Capitalization Ratios






Total debt


47%




40%


Total equity


53%




60%


 

Anadarko Petroleum Corporation

(Unaudited)


Sales Volumes and Prices


















Average Daily Sales Volumes


Sales Volumes


Average Sales Price




Oil &






Oil &






Oil &




Natural Gas


Condensate


NGLs


Natural Gas


Condensate


NGLs


Natural Gas


Condensate


NGLs


MMcf/d


MBbls/d


MBbls/d


Bcf


MMBbls


MMBbls


Per Mcf


Per Bbl


Per Bbl

Quarter Ended March 31, 2015


















United States

2,738



237



136



246



22



12



$

2.60



$

44.19



$

17.29


Algeria



70



7





6



1





56.02



32.75


Other International



28







2







49.55




Total

2,738



335



143



246



30



13



$

2.60



$

47.12



$

18.00




















Quarter Ended March 31, 2014


















United States

2,697



180



99



243



16



9



$

5.01



$

94.84



$

43.35


Algeria



60







5







108.55




Other International



30







3







108.14




Total

2,697



270



99



243



24



9



$

5.01



$

99.37



$

43.35







































Average Daily Sales Volumes

MBOE/d


Sales Volumes

MMBOE





























Quarter Ended March 31, 2015

934


84











Quarter Ended March 31, 2014

819


74





































Sales Revenue and Commodity Derivatives









Sales



Net Cash Received (Paid) from Settlement of Commodity Derivatives

millions

Natural Gas


Oil & Condensate


NGLs



Natural Gas


Oil & Condensate


NGLs

Quarter Ended March 31, 2015













United States

$

641



$

940



$

213




$

73



$

2



$

15


Algeria



352



19









Other International



127











Total

$

641



$

1,419



$

232




$

73



$

2



$

15















Quarter Ended March 31, 2014













United States

$

1,217



$

1,540



$

386




$

(81)



$

(16)



$


Algeria



582








5




Other International



302











Total

$

1,217



$

2,424



$

386




$

(81)



$

(11)



$


 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

As of May 4, 2015








2nd-Qtr


Full-Year



Guidance *


Guidance *












 Units


 Units










Total Sales Volumes (MMBOE)


77



79



300



306


Total Sales Volumes (MBOE/d)


846



868



822



838











Crude Oil (MBbl/d)


296



303



290



297











United States


222



225



207



211


Algeria


46



48



61



62


Ghana


28



30



22



24











Natural Gas (MMcf/d)


















United States


2,530



2,580



2,455



2,480











Natural Gas Liquids (MBbl/d)


















United States


120



130



119



123


Algeria


5



7



4



6






















$ / Unit


$ / Unit

Price Differentials vs NYMEX (w/o hedges)


















Crude Oil ($/Bbl)


(3.30)



2.10



(3.80)



1.40











United States


(5.00)





(6.00)



(1.00)


Algeria


2.00



8.00



2.00



8.00


Ghana


2.00



8.00



1.00



6.00











Natural Gas ($/Mcf)


















United States


(0.55)



(0.40)



(0.55)



(0.35)











* All volumes and prices exclude the impact from EOR.





 

Anadarko Petroleum Corporation

Financial and Operating External Guidance

As of May 4, 2015








2nd-Qtr


Full-Year



Guidance *


Guidance *












 $ MM


 $ MM

Other Revenues









Marketing and Gathering Margin


15



35



130



150


Minerals and Other


85



95



290



310






















$ / BOE


$ / BOE

Costs and Expenses









Oil & Gas Direct Operating


3.60



3.80



3.50



3.90


Oil & Gas Transportation/Other


3.65



3.85



3.70



3.90


Depreciation, Depletion, and Amortization


14.60



15.10



14.80



15.30


Production Taxes (% of Product Revenue)


8.0%



9.0%



8.5%



9.5%













$ MM


$ MM










General and Administrative


320



340



1,250



1,300


Exploration Expense









   Non-Cash


130



150



550



600


   Cash


90



110



375



400


Interest Expense (net)


205



215



815



835


Other (Income) Expense


45



55



165



215











Taxes









Algeria  (All current)


55%



60%



55%



60%


Rest of Company  (50% Current / 50% Deferred for Q2 and Expect Significant Current Tax-Benefit for FY)


25%



35%



25%



30%




















Avg. Shares Outstanding (MM)









Basic


507



508



507



509


Diluted


508



510



508



510




















Capital Investment (Excluding Western Gas Partners, LP)

$ MM


$ MM










APC Capital Expenditures


1,425



1,625



5,400



5,700











* Excludes items affecting comparability




 

Anadarko Petroleum Corporation

Commodity Hedge Positions

As of May 4, 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 May 4, 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

6.06%

3M LIBOR










 

Anadarko Petroleum Corporation

Reconciliation of Same-Store Sales


Average Daily Sales Volumes


Quarter Ended March 31, 2015


Quarter Ended March 31, 2014




Oil &








Oil &






Natural Gas


Condensate


NGLs


Total


Natural Gas


Condensate


NGLs


Total


MMcf/d


MBbls/d


MBbls/d


MBOE/d


MMcf/d


MBbls/d


MBbls/d


MBOE/d

U.S. Onshore

2,517



168



130



717



2,396



112



92



604


Deepwater Gulf of Mexico

221



46



6



89



275



46



6



98


International and Alaska



107



7



114





87





87


Same-Store Sales

2,738



321



143



920



2,671



245



98



789


China, Pinedale/Jonah, and EOR



14





14



26



25



1



30


Total

2,738



335



143



934



2,697



270



99



819


















 

PDF - http://origin-qps.onstreammedia.com/origin/multivu_archive/ENR/213715-Anadarko-Petroleum-Corporation.pdf

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/anadarko-announces-first-quarter-2015-results-300076925.html

SOURCE Anadarko Petroleum Corporation

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