Anadarko Reports Loss, Volumes Up

Anadarko Petroleum Corporation (APC - Analyst Report) posted better-than-expected numbers for the third quarter of 2009 on higher sales volumes, lower lease operating expenses (LOE) and improved drilling efficiency. Net loss from continuing operations was 11 cents per share, higher than the Zacks Consensus Estimate of a net loss of 32 cents. It reported a net income of $1.58 per share in the same period last year. 

Sales volumes went up 12% to 57 million barrels of oil equivalent (BOE) or 616 thousand BOE per day, above the quarterly guidance, primarily due to deepwater drilling successes in the Gulf of Mexico and West Africa. Anadarko also received approval from the Ghanaian government for the development of Jubilee field Phase I. Daily sales volumes of crude oil & condensate, natural gas and NGL averaged 205,000 barrels (up 13%), 2.1 billion cubic feet (up 8%) and 54,000 barrels (up 42%), respectively. 

Revenues dipped 55% to $2.7 billion due to lower energy prices. Revenues from natural gas, crude oil & condensate, and NGL were down 81%, 61% and 32%, respectively. Realized price, including the impact of hedges, for crude oil & condensate, natural gas and NGL averaged $66.4 per barrel (down 66%), $2.3 per thousand cubic feet (down 83%) and $33.4 per barrel (down 52%). 

Anadarko continued with its efforts to control cost and improve operational efficiency to stay competitive under the present challenging commodity price environment. LOE per BOE improved 9% sequentially during the quarter. 

Anadarko also focused on strengthening the balance sheet and enhancing the financial flexibility and liquidity position. The company ended the quarter with $3.6 billion of cash in hand and a net debt of $11.1 billion. It had a debt-to-capitalization ratio of 39% at quarter-end. Capital expenditures in the quarter were $849 million. 

Based on improved performance and favorable weather conditions in the Gulf of Mexico, Anadarko has raised the sales volume guidance for 2009 to 220−221 million BOE and kept the capex budget intact at $3.9−$4.4 billion. For the fourth quarter, Anadarko guided 53−54 million BOE of sales volume, with expected capex of $1.1−$1.5 billion.

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