HOUSTON, TX — (Marketwired) — 11/04/13 — 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)
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.”
For details on Anadarko–s operations and exploration program, please refer to the comprehensive report on third-quarter 2013 activity. The report is available at .
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.
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.
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.
Anadarko will host a conference call on Tuesday, Nov. 5, 2013, at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) to discuss third-quarter results, current operations and the company–s outlook for the remainder of 2013. The dial-in number is 855.812.0464 in the United States, or 970.300.2271 internationally. The confirmation number is 75022312. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit . A replay of the call will be available on the website for approximately 30 days following the conference call.
Eight 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.
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 2012, the company had approximately 2.56 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 .
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 consummate the transaction described in this news release, achieve its production targets, successfully manage its capital expenditures, timely complete and commercially operate the projects and drilling prospects identified in this news release, and achieve production and budget expectations on its mega projects. See “Risk Factors” in the company–s 2012 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.
* For the quarter ended September 30, 2013, before-tax unrealized gains (losses) on derivatives, net includes $(120) million related to commodity derivatives, $74 million related to interest-rate and other derivatives, and $10 million related to gathering, processing, and marketing sales.
* For the quarter ended September 30, 2012, before-tax unrealized gains (losses) on derivatives, net includes $(437) million related to commodity derivatives, $(14) million related to interest-rate and other derivatives, and $(5) million related to gathering, processing, and marketing sales.
Below are reconciliations of cash provided by operating activities (GAAP) to discretionary cash flow from operations (non-GAAP), free cash flow (non-GAAP), and adjusted free cash flow (non-GAAP), as well as net income (loss) attributable to common stockholders (GAAP) to adjusted net income (loss) (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management uses discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes fluctuations in assets and liabilities. Management uses free cash flow and adjusted free cash flow to demonstrate the Company–s ability to internally fund capital expenditures and to service or incur additional debt. Management uses adjusted net income (loss) to evaluate the Company–s operational trends and performance.
* Includes Western Gas Partners, LP (WES) capital expenditures of $185 million for the quarter ended September 30, 2013, $139 million for the quarter ended September 30, 2012, $622 million for the nine months ended September 30, 2013, and $360 million for the nine months ended September 30, 2012.
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.