Anadarko Announces First-Quarter 2016 Results

HOUSTON, May 2, 2016 /PRNewswire/ -- Anadarko Petroleum Corporation APC today announced its financial and operating results for the first quarter of 2016, including a net loss attributable to common stockholders of $1.034 billion, or $2.03 per share (diluted). The net loss includes certain items typically excluded by the investment community in published estimates, which in the aggregate decreased net income by $465 million or $0.91 per share (diluted) on an after-tax basis.(1) Net cash used in operating activities in the first quarter of 2016 was $137 million. Discretionary cash flow from operations totaled $486 million.(2)

FIRST-QUARTER 2016 HIGHLIGHTS

  • Announced year-over-year capital reduction of approximately 50 percent(3)
  • Improved cost structure by $800 million by reducing the dividend and staffing
  • Closed monetizations totaling $1.3 billion
  • Issued $3.0 billion of new bonds to refinance debt maturing in 2016 and 2017

"During the first quarter, we maintained strong operating performance and continued to improve our cost structure and efficiencies, while taking significant steps to strengthen our financial position without diluting equity," said Al Walker, Anadarko Chairman, President and CEO. "Year to date, we've closed monetizations totaling $1.3 billion and are currently in the process of advancing another $700-plus million of divestitures. We've also removed perceived uncertainty by issuing $3.0 billion of investment-grade bonds to refinance near-term maturities. Additionally, the dividend reduction and the restructuring of our workforce together are expected to provide approximately $800 million of available cash on an annualized basis. These actions combined with our continued focus on financial discipline, operational excellence and best-in-class capital allocation, support our ability to enhance and preserve value in a volatile market environment."

OPERATIONS HIGHLIGHTS

  • Increased Delaware Basin net resource estimate to more than 2 billion barrels of oil equivalent (BOE)
  • Achieved first oil at the Heidelberg development in the deepwater Gulf of Mexico
  • Advanced the TEN development with the arrival of the FPSO offshore Ghana
  • Successfully drilled the company's first horizontal deepwater well offshore Côte d'Ivoire

Anadarko's first-quarter sales volumes of natural gas, oil and natural gas liquids (NGLs) totaled 75 million BOE, or an average of 823,000 BOE per day, on a divestiture-adjusted basis.(4)

Anadarko's 2016 U.S. onshore capital investments are primarily focused in the Delaware and DJ basins. In the Delaware Basin of West Texas, Anadarko delivered a year-over-year increase in sales volumes of approximately 47 percent, or about 12,000 BOE per day. As previously announced, the company's successful appraisal and delineation program also resulted in an increase to its net recoverable resource estimate in the basin to more than 2 billion BOE from its previous estimate of more than 1 billion BOE. In the DJ Basin of northeast Colorado, the company achieved a year-over-year sales-volume increase of approximately 11 percent, or about 24,000 BOE per day.

In the Gulf of Mexico, the company increased year-over-year liquids sales volumes in the first quarter by 25 percent, largely driven by achieving first oil at Heidelberg ahead of schedule, continued outperformance at Lucius, and the contributions from our capital-efficient tieback program. Also during the first quarter, the floating production, storage and offloading (FPSO) vessel arrived at the TEN field offshore Ghana. The TEN development is more than 90-percent complete and remains on schedule for first oil in the third quarter of this year. Offshore Côte d'Ivoire, Anadarko continued its successful appraisal program, encountering approximately 100 net feet of vertical pay in the company's first horizontal deepwater well at Paon-5A. The company plans to drill the Paon-3AR sidetrack well in the second quarter, followed by a drillstem and interference testing program, as it works to advance the Paon discovery toward commerciality.

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 2016 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 3, 2016, 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 2016. The dial-in number is 877.883.0383 in the United States or 412.902.6506 internationally. The confirmation number is 1750264. 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, a reconciliation of "divestiture-adjusted" or "same-store" sales, 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) Does not include capital investments associated with Western Gas Partners, LP WES.

(4) 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 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, timely complete and commercially operate the projects and drilling prospects identified in this news release, and consummate the transactions described in this news release. 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 "net resource estimate," "net recoverable 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, 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
Brian Kuck, brian.kuck@anadarko.com, 832.636.7135
Jeremy Smith, jeremy.smith@anadarko.com, 832.636.1544
Shandell Szabo, shandell.szabo@anadarko.com, 832.636.3977

 

Anadarko Petroleum Corporation

Certain Items Affecting Comparability




Quarter Ended March 31, 2016



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*


$

(404)



$

(255)



$

(0.50)


Gains (losses) on divestitures, net


2



1




Impairments


(16)



(10)



(0.02)


Restructuring charges


(203)



(128)



(0.25)


Change in uncertain tax positions (FIN 48)




(73)



(0.14)




$

(621)



$

(465)



$

(0.91)



*    Includes $(325) million related to interest-rate derivatives, $(75) million related to commodity derivatives, and $(4) million related to gathering, processing, and marketing sales. 

 



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)



*    Includes $(205) million related to interest-rate derivatives, $(37) million related to commodity derivatives, and $(1) 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 to 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, 2016


March 31, 2015


After


Per Share


After


Per Share

millions except per-share amounts

Tax


(diluted)


Tax


(diluted)

Net income (loss) attributable to common stockholders

$

(1,034)



$

(2.03)



$

(3,268)



$

(6.45)


Less certain items affecting comparability

(465)



(0.91)



(2,903)



(5.73)


Adjusted net income (loss)

$

(569)



$

(1.12)



$

(365)



$

(0.72)


 

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

2016


2015

Net cash provided by (used in) operating activities

$

(137)



$

(4,504)


Add back




Increase (decrease) in accounts receivable

(46)



(357)


(Increase) decrease in accounts payable and accrued expenses

403



279


Other items, net

86



608


Tronox settlement payment



5,215


Certain nonoperating and other excluded items

180



26


Current taxes related to asset monetizations and Tronox tax position



228


Discretionary cash flow from operations

$

486



$

1,495


 


Quarter Ended


March 31,

millions

2016


2015

Discretionary cash flow from operations

$

486



$

1,495


Less capital expenditures*

896



1,822


Free cash flow**

$

(410)



$

(327)



*    Includes Western Gas Partners, LP (WES) capital expenditures of $140 million for the quarter ended March 31, 2016, and $156 million for the quarter ended March 31, 2015.


**  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, 2016








Anadarko




Anadarko


WGP*


excluding

millions



Consolidated


Consolidated


WGP

Total debt



$

18,751



$

3,049



$

15,702


Less cash and cash equivalents



2,947



111



2,836


Net debt



$

15,804



$

2,938



$

12,866

















Anadarko






Anadarko


excluding

millions





Consolidated


WGP

Net debt





$

15,804



$

12,866


Total equity





14,701



11,686


Adjusted capitalization





$

30,505



$

24,552
















Net debt to adjusted capitalization ratio








52

%



52

%


*    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

2016


2015

Consolidated Statements of Income




Revenues and Other




Oil and condensate sales

$

850



$

1,419


Natural-gas sales

366



641


Natural-gas liquids sales

178



232


Gathering, processing, and marketing sales

240



293


Gains (losses) on divestitures and other, net

40



(264)


Total

1,674



2,321


Costs and Expenses




Oil and gas operating

208



296


Oil and gas transportation

242



305


Exploration

126



1,083


Gathering, processing, and marketing

215



254


General and administrative

449



307


Depreciation, depletion, and amortization

1,149



1,256


Other taxes

117



182


Impairments

16



2,783


Other operating expense

16



63


Total

2,538



6,529


Operating Income (Loss)

(864)



(4,208)


Other (Income) Expense




Interest expense

220



216


(Gains) losses on derivatives, net

297



152


Other (income) expense, net



47


Tronox-related contingent loss



5


Total

517



420


Income (Loss) Before Income Taxes

(1,381)



(4,628)


Income tax expense (benefit)

(383)



(1,392)


Net Income (Loss)

(998)



(3,236)


Net income (loss) attributable to noncontrolling interests

36



32


Net Income (Loss) Attributable to Common Stockholders

$

(1,034)



$

(3,268)


Per Common Share




Net income (loss) attributable to common stockholders—basic

$

(2.03)



$

(6.45)


Net income (loss) attributable to common stockholders—diluted

$

(2.03)



$

(6.45)


Average Number of Common Shares Outstanding—Basic

509



507


Average Number of Common Shares Outstanding—Diluted

509



507






Exploration Expense




Dry hole expense

$

11



$

29


Impairments of unproved properties

24



980


Geological and geophysical expense

37



22


Exploration overhead and other

54



52


Total

$

126



$

1,083


 

Anadarko Petroleum Corporation

(Unaudited)



Quarter Ended

Summary Financial Information

March 31,

millions

2016


2015

Cash Flows from Operating Activities




Net income (loss)

$

(998)



$

(3,236)


Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities




Depreciation, depletion, and amortization

1,149



1,256


Deferred income taxes

(413)



(1,198)


Dry hole expense and impairments of unproved properties

35



1,009


Impairments

16



2,783


(Gains) losses on divestitures, net

(2)



334


Total (gains) losses on derivatives, net

299



152


Operating portion of net cash received (paid) in settlement of derivative instruments

105



91


Other

115



45


Changes in assets and liabilities




  Tronox-related contingent liability



(5,210)


  (Increase) decrease in accounts receivable

46



357


  Increase (decrease) in accounts payable and accrued expenses

(403)



(279)


  Other items, net

(86)



(608)


Net Cash Provided by (Used in) Operating Activities

$

(137)



$

(4,504)






Capital Expenditures

$

896



$

1,822


 






March 31,


December 31,

millions





2016


2015

Condensed Balance Sheets








Cash and cash equivalents





$

2,947



$

939


Accounts receivable, net of allowance





2,392



2,469


Other current assets





428



573


Net properties and equipment





33,526



33,751


Other assets





2,304



2,268


Goodwill and other intangible assets





6,325



6,331


Total Assets





$

47,922



$

46,331


Short-term debt





3,025



32


Other current liabilities





3,632



4,148


Long-term debt





15,726



15,636


Deferred income taxes





4,940



5,400


Other long-term liabilities





5,898



5,658


Stockholders' equity





11,686



12,819


Noncontrolling interests





3,015



2,638


Total Equity





$

14,701



$

15,457


Total Liabilities and Equity





$

47,922



$

46,331


Capitalization








Total debt





$

18,751



$

15,668


Total equity





14,701



15,457


Total





$

33,452



$

31,125












Capitalization Ratios










Total debt






56

%



50

%

Total equity






44

%



50

%

 

Anadarko Petroleum Corporation

(Unaudited)


Sales Volumes and Prices


Average Daily Sales Volumes


Sales Volumes


Average Sales Price


Oil &






Oil &






Oil &






Condensate


Natural Gas


NGLs


Condensate


Natural Gas


NGLs


Condensate


Natural Gas


NGLs


MBbls/d


MMcf/d


MBbls/d


MMBbls


Bcf


MMBbls


Per Bbl


Per Mcf


Per Bbl

Quarter Ended March 31, 2016


















United States

232



2,303



122



21



210



11



$

28.04



$

1.75



$

14.98


Algeria

65





6



6







34.62





22.78


Other International

18







2







32.27






Total

315



2,303



128



29



210



11



$

29.65



$

1.75



$

15.32

















Quarter Ended March 31, 2015


















United States

237



2,738



136



22



246



12



$

44.19



$

2.60



$

17.29


Algeria

70





7



6





1



56.02





32.75


Other International

28







2







49.55






Total

335



2,738



143



30



246



13



$

47.12



$

2.60



$

18.00







































Average Daily Sales Volumes
MBOE/d


Sales Volumes
MMBOE





























Quarter Ended March 31, 2016

827


75











Quarter Ended March 31, 2015

934


84





























 

Sales Revenue and Commodity Derivatives


Sales



Net Cash Received (Paid) from Settlement of Commodity Derivatives

millions

Oil & Condensate


Natural Gas


NGLs



Oil & Condensate


Natural Gas


NGLs

Quarter Ended March 31, 2016













United States

$

591



$

366



$

167




$

88



$

13



$

2


Algeria

206





11









Other International

53













Total

$

850



$

366



$

178




$

88



$

13



$

2















Quarter Ended March 31, 2015













United States

$

940



$

641



$

213




$

2



$

73



$

15


Algeria

352





19









Other International

127













Total

$

1,419



$

641



$

232




$

2



$

73



$

15


 


Anadarko Petroleum Corporation

Financial and Operating External Guidance

As of May 2, 2016






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








2nd-Qtr


Full-Year



Guidance (see Note)


Guidance (see Note)


 Units


 Units










Total Sales Volumes (MMBOE)


71



73



282



286


Total Sales Volumes (MBOE/d)


780



802



770



781











Oil (MBbl/d)


296



302



306



311











United States


219



222



222



225


Algeria


59



61



59



60


Ghana


18



19



25



26











Natural Gas (MMcf/d)


















United States


2,140



2,180



2,060



2,080











Natural Gas Liquids (MBbl/d)


















United States


123



127



117



120


Algeria


4



6



5



7






















$ / Unit


$ / Unit

Price Differentials vs NYMEX (w/o hedges)


















Oil ($/Bbl)


(6.70)



(2.20)



(6.90)



(2.40)











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

As of May 2, 2016






Note: Guidance excludes items affecting comparability








2nd-Qtr


Full-Year



Guidance (see Note)


Guidance (see Note)



 $ MM


 $ MM

Other Revenues









Marketing and Gathering Margin


10



30



110



130


Minerals and Other


35



55



165



185






















$ / BOE


$ / BOE

Costs and Expenses









Oil & Gas Direct Operating


3.05



3.20



3.10



3.30


Oil & Gas Transportation


3.30



3.50



3.40



3.60


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 (excludes restructuring charges)


245



265



950



1,000


Other Operating Expense


5



15



55



65


Exploration Expense









  Non-Cash


40



60



350



450


  Cash


65



85



280



300


Interest Expense (net)


215



230



880



900


Other (Income) Expense


35



45



150



175











Taxes









Algeria  (100% current)


70

%


75

%


70

%


75

%

Rest of Company  (10% Current for Q2 and Total Year)


35

%


45

%


30

%


40

%



















Avg. Shares Outstanding (MM)









Basic


509



510



509



510


Diluted


509



510



510



511




















Capital Investment (Excluding Western Gas Partners, LP)

$ MM


$ MM










APC Capital Expenditures


700



800



2,600



2,800











 

Anadarko Petroleum Corporation

Commodity Hedge Positions

As of May 2, 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 May 2, 2016







Instrument

Notional Amt.

Reference Period

Mandatory
Termination Date

Rate Paid

Rate Received

Swap

$50 Million

Sept. 2016 2026

Sept. 2016

5.910%

3M LIBOR

Swap

$50 Million

Sept. 2016 2046

Sept. 2016

6.290%

3M LIBOR

Swap

$500 Million

Sept. 2016 2046

Sept. 2018

6.559%

3M LIBOR

Swap

$300 Million

Sept. 2016 2046

Sept. 2020

6.509%

3M LIBOR

Swap

$450 Million

Sept. 2017 2047

Sept. 2018

6.445%

3M LIBOR

Swap

$100 Million

Sept. 2017 2047

Sept. 2020

6.891%

3M LIBOR

Swap

$250 Million

Sept. 2017 2047

Sept. 2021

6.570%

3M LIBOR

 


Anadarko Petroleum Corporation

Reconciliation of Same-Store Sales


Average Daily Sales Volumes


Quarter Ended March 31, 2016


Quarter Ended March 31, 2015


Oil &
Condensate
MBbls/d


Natural Gas
MMcf/d


NGLs
MBbls/d


Total
MBOE/d


Oil &
Condensate
MBbls/d


Natural Gas
MMcf/d


NGLs
MBbls/d


Total
MBOE/d

U.S. Onshore

163



2,206



114



645



167



2,232



129



668


Deepwater Gulf of Mexico

58



85



7



79



46



221



6



89


International and Alaska

93





6



99



107





7



114


Same-Store Sales

314



2,291



127



823



320



2,453



142



871


Divestitures*

1



12



1



4



15



285



1



63


Total

315



2,303



128



827



335



2,738



143



934



















*    Includes East Chalk, EOR, Bossier, and Powder River Basin CBM. East Chalk was classified as held for sale at March 31, 2016, and closed in April 2016.

 

Average Daily Sales Volumes




Year Ended December 31, 2015










Oil &
Condensate
MBbls/d


Natural Gas
MMcf/d


NGLs
MBbls/d


Total
MBOE/d

U.S. Onshore









165



2,003



116



615


Deepwater Gulf of Mexico









53



152



7



85


International and Alaska









94





6



100


Same-Store Sales









312



2,155



129



800


Divestitures*









5



179



1



36


Total









317



2,334



130



836



















*    Includes East Chalk, EOR, Bossier, and Powder River Basin CBM. East Chalk was classified as held for sale at March 31, 2016, and closed in April 2016.

 

PDF - http://origin-qps.onstreammedia.com/origin/multivu_archive/ENR/362450-apc-1q16-operations-report-5-2-16.pdf

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/anadarko-announces-first-quarter-2016-results-300261084.html

SOURCE Anadarko Petroleum Corporation

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