USA: Anadarko Announces 2010 Fourth-Quarter and Full-Year Results
Anadarko Petroleum Corporation announced that net income from continuing operations attributable to common stockholders totaled $111 million, or $0.22 per share (diluted), for the quarter ended Dec. 31, 2010.
These results include certain items affecting comparability that are typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $34 million, or $0.07 per share (diluted), on an after-tax basis.(1) Cash flow from continuing operations in the fourth quarter of 2010 was $1.315 billion, and discretionary cash flow totaled $1.298 billion.(2)
For the year ended Dec. 31, 2010, Anadarko reported net income from continuing operations attributable to common stockholders of $761 million, or $1.52 per share (diluted). Full-year 2010 cash flow from continuing operations was $5.247 billion, and discretionary cash flow totaled $5.380 billion.(2)
— Increased sales volumes by 7 percent over 2009, including a 13-percent liquids increase
— Added 359 million barrels of oil equivalent (BOE) of proved reserves, which equates to replacing 153 percent of production
— Continued offshore exploration success with an approximate 60-percent discovery rate
— Achieved first oil from the Jubilee mega project in a record 3.5 years following discovery
“2010 was a year of very strong performance with record sales volumes, above-target reserve growth and industry-leading exploration results — each of which surpassed the guidance we provided in March — while spending approximately $200 million less capital than originally projected,” said Anadarko Chairman and CEO Jim Hackett. “Additionally, we strengthened the balance sheet by completing several transactions that enhanced liquidity and significantly extended near-term debt maturities, and had approximately $3.7 billion of cash on hand at year end. We are positioned to deliver upon the strategic plan we laid out last March to achieve a five-year 7- to 9-percent production CAGR (compounded annual growth rate) and surpass 3 billion BOE of proved reserves by year-end 2014.”
Full-year 2010 sales volumes of natural gas, crude oil and natural gas liquids (NGLs) totaled a record 235 million BOE, or 643,000 BOE per day, which was 6.5 million BOE higher than the midpoint of the original sales-volumes guidance provided at the March 2010 Investor Conference. This represents an approximate 7-percent increase over full-year 2009 sales volumes of 220 million BOE. Fourth-quarter 2010 sales volumes of natural gas, crude oil and NGLs totaled 56 million BOE, or 608,000 BOE per day.
Anadarko added 359 million BOE of proved reserves in 2010, including 29 million BOE from price revisions, and incurred costs of approximately $5.036 billion associated with its oil and natural gas exploration and development activities.(2) The company estimates its proved reserves at year-end 2010 totaled 2.42 billion BOE, with approximately 69 percent of its reserves in the proved developed category and approximately 31 percent categorized as proved undeveloped. At year-end 2010, Anadarko’s product mix of proved reserves was made up of approximately 56 percent natural gas and 44 percent liquids.
2010 Worldwide Exploration and Development Highlights
Anadarko’s record production of 235 million BOE was primarily driven by an 11-percent increase in sales volumes from the Rocky Mountain region, growth in the company’s liquids-rich plays and accelerated activity in the Marcellus shale. With existing infrastructure and service agreements in place, Anadarko has established itself as the largest producer in the Eagleford Shale with current gross production of approximately 27,000 BOE per day. The midstream expansion in the Marcellus Shale during the fourth quarter of 2010 enabled the company to nearly double its gross daily sales volumes from the end of the third quarter to approximately 330 million cubic feet per day (MMcf/d) at the end of the year, while being carried on its capital costs through the joint-venture agreement announced earlier in the year.
“The success of Anadarko’s worldwide exploration program, coupled with the results of our evaluation and development activity in the U.S. onshore, has continued to add differentiating value for shareholders,” continued Hackett. “Our offshore exploration drilling program achieved a success rate of approximately 60 percent, while also continuing to safely advance existing deepwater discoveries toward potential future development, with a 100-percent success rate on a total of nine appraisal wells in 2010. In addition to these industry-leading results, the further evaluation and development of our Marcellus and Eagleford shale programs — where we amassed large fairway acreage positions at attractive costs in the early stages of exploration — enabled us to establish a net risked resource potential of 1.5 billion BOE in these two major growth areas.”
In Mozambique, Anadarko announced three world-class natural gas discoveries at Windjammer, Barquentine and Lagosta — each of which was ranked among the top five discoveries offshore Africa in 2010, according to IHS Energy. As a result of the success, Anadarko and its partners have begun evaluating various commercialization options and expect to keep at least one rig in the area to advance an appraisal program and continue exploration activities. In West Africa, the company announced its second discovery offshore Sierra Leone at the Mercury prospect. Anadarko, along with partners, is advancing plans to drill three to five exploration and appraisal wells across the company’s 5 million gross acres offshore Sierra Leone, Liberia and Cote d’Ivoire in 2011. Offshore Ghana, Anadarko and its partners achieved first oil from the world-class Jubilee field in a record 3.5 years following discovery. Also offshore Ghana, Anadarko and its partners continued a successful appraisal program in the adjacent Tweneboa and Enyenra (formerly Owo) fields and expect to submit a development plan to the Ghanaian government in 2011.
Source: Anadarko, February 1, 2011; Image: ENI