USA: Deepwater Horizon Settlement Pulls Anadarko Down

Anadarko Petroleum Corporation yesterday announced 2011 fourth-quarter results, reporting a net loss attributable to common stockholders of $358 million, or $.72 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 $781 million, or $1.57 per share (diluted) on an after-tax basis. Cash flow from operating activities in the fourth quarter of 2011 includes a $4 billion payment to settle the BP dispute. This resulted in negative cash flow from operating activities for the fourth quarter of $2.087 billion. Discretionary cash flow for the quarter totaled $1.752 billion.

“We reached a settlement with BP over the 2010 Deepwater Horizon event, removing significant uncertainties for our stakeholders and returning investor and management focus to the value-creation opportunities in our portfolio. We look forward to updating our stakeholders regarding our capital program for 2012 and plans for value-based growth at our upcoming Investor Conference scheduled for March 13 in The Woodlands,” said Anadarko Chairman and CEO Jim Hackett.

During the quarter, Anadarko remitted approximately $4 billion to BP as part of its settlement agreement and received insurance proceeds of approximately $138 million associated with the Deepwater Horizon events.

For the year ended Dec. 31, 2011, Anadarko reported a net loss from continuing operations attributable to common stockholders of $2.649 billion, or $5.32 per share (diluted), and full-year 2011 cash flow from operating activities was $2.505 billion, both of which were impacted by the BP settlement and payment. Discretionary cash flow totaled $7.178 billion.

“During 2011, we continued to demonstrate the power of Anadarko’s capital-efficient portfolio by achieving sales volumes at the high end of guidance with capital spending at the low end of the guidance range. We also generated significant discretionary cash flow and delivered record sales volumes, strong reserve additions at very competitive costs, and a leading deepwater exploration and appraisal drilling success rate,” said Hackett.

“By continuing to focus capital investments on our liquids-rich opportunities, we achieved 10-percent year-over-year growth in liquids sales volumes, highlighted by production records in the Eagleford Shale, Wattenberg field, Greater Natural Buttes area, Bone Spring and certain other U.S. onshore resource plays. We successfully unitized and sanctioned the Lucius project in the Gulf of Mexico, with anticipated first oil in 2014. Also in the Gulf, we’ve continued to advance the Caesar/Tonga development toward first oil, which is expected by mid-year 2012. Internationally, the El Merk project in Algeria is about 88-percent complete, with significant oil volumes expected near year end, and we continue to de-risk and advance growth opportunities offshore Mozambique and Ghana. The depth and performance of our portfolio continues to keep us on the path toward meeting our strategic objectives.”

2011 Exploration Highlights In 2011

Anadarko’s deepwater exploration and appraisal programs delivered an extraordinary success rate of 80 percent, with discoveries offshore Mozambique, offshore Ghana and in the Gulf of Mexico.

Through additional drilling offshore Mozambique, Anadarko and its partners’ exploration efforts more than tripled the original estimate of recoverable natural gas resources to a range of 15 to 30-plus Tcf, making this area one of the world’s most important natural gas discoveries over the last 10 years. To date, the partnership has announced a total of seven successful wells in the discovery complex located in the Offshore Area 1 of the Rovuma Basin. To commercialize the discovery area, the partnership continues to advance the development of a liquefaction facility initially designed for two, 5-million-tonne-per-annum trains.

In the Deepwater Tano Block offshore Ghana, Anadarko and its partners continued to advance the Tweneboa, Enyenra and Ntomme (TEN) complex toward a plan of development with four successful delineation wells during the year. On the adjacent West Cape Three Points Block, the partners announced three discoveries and one successful appraisal well during the year. With additional appraisal success, these discoveries have the potential to anchor new development projects on the block.

The company has resumed an active deepwater exploration and appraisal program in the Gulf of Mexico and made its first post-moratorium discovery at the Cheyenne East prospect. The well is being tied back to the Independence Hub facility, with production expected during the first quarter of 2012. In addition, Anadarko recently received the necessary permits to drill its Spartacus prospect, located near the company’s sanctioned Lucius development.

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Offshore Energy Today Staff, February 7, 2012