Anadarko Announces $2.3 Billion Capital Budget for 2003.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--Jan. 31, 2003 Anadarko Petroleum Corporation Anadarko Petroleum Corporation (NYSE: APC) is one of the world’s largest independent oil and gas exploration and production companies, with 2.37 billion barrels of oil equivalent (BOE) of proved reserves and a production of 190 million BOE in 2004. Ranked No. (NYSE NYSE See: New York Stock Exchange :APC (1) (American Power Conversion Corporation, West Kingston, RI, www.apcc.com) The leading manufacturer of UPS systems and surge suppressors, founded in 1981 by Rodger Dowdell, Neil Rasmussen and Emanual Landsman, three electronic power engineers who had worked at MIT. ) -- North American development spending to increase 50 percent -- Adjusted volumes expected to increase 5 percent The Board of Directors of Anadarko Petroleum Corporation (NYSE:APC) has approved a $2.3 billion capital budget for 2003 that should enable the company to grow production to 200 million barrels of oil equivalent (BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ), explore in a number of key basins and reduce debt. The company spent nearly $2.4 billion in 2002. "The goal of this year's budget is to harvest the benefits of the work we've been doing over the last couple of years - and to set ourselves up for greater production and reserve growth in 2004," said John Seitz, Anadarko President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We recognize that this is a conservative budget, considering the commodity price trends we're seeing for the remainder of the year. Based on current NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). prices, it now appears that cash flow could be closer to $3 billion. But since so much of our activity is front-end loaded Front-End Load A commission or sales fee charged at the time of the initial purchase for an investment, usually mutual funds and insurance policies. It is deducted from the investment amount and thus, lowers the size of the investment. to the first half of the year, it makes sense to wait until mid-year to see if prices hold before we commit to a higher capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. plan," Seitz said. "Even at relatively modest price forecasts, Anadarko expects to have about $300 million of free cash flow, which we plan to use to strengthen the balance sheet by reducing debt. If we have additional cash, we have plenty of good opportunities to invest in growth projects," Seitz said. Anadarko expects to operate an average of about 50 drilling rigs in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. during 2003 - compared with 38 during 2002. This program should enable Anadarko to increase production to about 200 million BOE. Taking into account the full-year effect of asset sales on 2002 volumes, this represents a 5 percent increase over last year. Anadarko has allocated nearly $1.5 billion to worldwide development projects in 2003 - a 35 percent increase from last year - primarily for fields in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , Western Canada
Western Canada, commonly referred to as the West , East and Central Texas, North Louisiana North Louisiana, also known as Sportsman's Paradise, is a region in the U.S. state of Louisiana. The region has two metropolitan areas: Monroe and Shreveport-Bossier City. and Wyoming. Approximately $381 million is earmarked for exploration in North America, the Middle East, North and West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. and Australia - a 56 percent decrease from 2002 funding levels. Almost 70 percent of this year's exploration budget will be used to evaluate the company's previous investments in land and seismic. The budget also includes $107 million for infrastructure and other construction projects and $337 million for capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. and overhead. "This year's program will be more development driven, particularly in the U.S. onshore and Canada," Seitz said. "With oil and gas prices so strong and drilling and oilfield service costs still fairly reasonable, it makes sense to tap our inventory of development locations. "Capital spending in Algeria and Alaska will decline this year because we've largely completed major construction projects there. Our focus in these areas during 2003 will be exploration and additional development drilling," Seitz said. "Despite the reduction in overall exploration spending this year, we still have substantial exposure to some very high-potential exploration opportunities, both in North America and internationally. We'll be spending a lot less on up-front activities such as lease acquisition than we did last year, however," he noted. LOWER 48 A total of $672 million is budgeted for Lower 48 onshore development this year - a 50 percent increase from the prior year. In addition, $84 million is allocated for exploration. Approximately $130 million is earmarked for the East Texas Bossier Bossier may refer to:
adj. dow·di·er, dow·di·est 1. Lacking stylishness or neatness; shabby: a dowdy gray outfit. 2. Old-fashioned; antiquated. n. pl. Ranch and Bald Prairie areas and for continued delineation and development of the Gregory and Louetta Parker discoveries. Forty-seven development and four exploration wells are planned for 2003 in the Bossier. "The work we do this year around Gregory and Louetta Parker is extremely important, because if these turn out to be sizeable discoveries, the Bossier will remain one of our major areas of activity for many more years to come," Seitz said. "The 10 delineation wells we plan to drill in these discovery areas could set up a strong inventory of new locations for the next several years." In North Louisiana, the company plans to spend $122 million to continue developing the Vernon field Vernon Field is a fictional character in the Batman maxi-series . History Vernon appears to be meek and unassuming. In reality, however, he is cunning and extremely corrupt, a tool of Gotham City's gangsters. and delineate last year's Ansley discovery. Twenty-seven development wells and two exploration wells are planned in this area. In the Giddings area of Central Texas, Anadarko plans to drill 60 development wells in 2003. This $130 million program includes additional delineation, development and recompletion drilling in the Austin Chalk formation See See also: Chalk and additional development in the Glen Rose/James Lime formation. The company also will continue its successful program of re-entering existing shallow wells and recompleting them to the Austin Chalk and deeper Buda and Georgetown formations. Continued infill drilling in the Brookeland field in the East Chalk area is planned. Anadarko's $237 million overall program for Wyoming and other Western states is highlighted by new activities in enhanced oil recovery Enhanced Oil Recovery (EOR) is a generic term for techniques for increasing the amount of oil that can be extracted from an oil field. Using EOR, 30-60 %, or more, of the reservoir's original oil can be extracted [1] compared with 20-40% [2] using CO2 injection and in coalbed methane Coalbed methane is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, and other countries. production. In preparation for the CO2 injection program start-up, approximately 33 new wells are planned in the Monell field, and a number of wells will be drilled, recompleted or reworked in the Salt Creek Salt Creek refers to:
In addition, a number of new wells, recompletions and workovers are planned in the Elk Basin field, which also was acquired last year. The company plans to drill 100 coalbed methane wells in the County Line and Atlantic Rim fields, along with 30 wells in the Copper Ridge area of Wyoming this year. In conventional development in the West, Anadarko plans to participate in 92 wells, half of which are non-operated wells in the Wamsutter field in Wyoming. The company also plans to purchase and expand a gas processing plant serving the Table Rock field, which will provide economic enhancement for additional development drilling opportunities in this field. Two exploration wells are planned this year on the Land Grant using results from recently completed 2-D seismic surveys. Overall, onshore Lower 48 production is expected to increase to 106 million barrels - an increase of 3 percent, adjusting for the effect of producing property sales during 2002. GULF OF MEXICO Approximately $460 million is budgeted for projects in the Gulf of Mexico, of which $363 million will go toward development and $98 million toward exploration. This development budget is more than double 2002 levels. And while the exploration budget will be considerably lower than in 2002, it will be more heavily focused on drilling this year. Anadarko plans to drill as many as 10 exploration wells in the Gulf this year. Five are planned in deepwater acreage, three in subsalt, and two conventional shelf tests. The first deepwater well on the Jubilee prospect, which straddles the Central and Eastern Gulf, is expected to spud in the first quarter of 2003. Development spending in the Gulf will increase by $188 million from 2002, as several key development programs get under way. Plans are being finalized for the Tarantula tarantula (tərăn`chələ), name applied chiefly to several species of the large, hairy spiders of the families Theraphosidae and Dipluridae of North and South America. The body of a tarantula may be as much as 3 in. (7. subsalt discovery at South Timbalier Block 308, which is expected to come on-line in late 2004. In total, 30 development wells are planned, including 18 conventional wells on the shelf, where the majority of production growth from the Gulf is expected to come on-line in 2003. In the subsalt shelf area, six development wells and recompletions are planned, including additional drilling at the Mahogany and Hickory Hickory, city, United States Hickory, city (1990 pop. 28,301), Burke and Catawba counties, W N.C., at the foot of the Blue Ridge Mts.; inc. 1870. It is a processing and trade center for an abundant agricultural region (grain, soybeans, poultry, hogs, fields and at the Tarantula discovery. In addition, six deepwater development wells are planned around the Marco Polo Marco Polo: see Polo, Marco. and K2 field discoveries. First production from Marco Polo is expected in early 2004. Total production from the Gulf of Mexico is expected to increase by nearly 13 percent during 2003 to 22 million barrels. CANADA As part of an overall $363 million capital spending plan for Canada, Anadarko plans to drill 322 development wells and 43 exploration wells during 2003. This budget is roughly flat with 2002 and reflects similar spending allocations year-to-year between exploration and development. The company expects to operate more than 20 rigs during the winter drilling season this year. Exploration focus will include the Fort Liard area of the southern Northwest Territories Northwest Territories, territory (2001 pop. 37,360), 532,643 sq mi (1,379,028 sq km), NW Canada. The Northwest Territories lie W of Nunavut, N of lat. 60°N, and E of Yukon. , where Anadarko expects to drill several wells this year, plus the Slave Point play, the Foothills, and the Peace River Arch area, where Anadarko is rapidly developing the Saddle Hills Saddle Hill is a low lying mountain in eastern Aberdeenshire, Scotland within the Mounth Range of the Grampian Mountains.[1] The peak elevation of this mountain is approximately 235 metres above mean sea level. This hill is immediately north of the Roman Camp of Raedykes. gas play. Delineation drilling is planned in the Monkman area, where Anadarko and its partners last year announced a major gas discovery, and in the Foothills area. Production from Canada is expected to be 33 million BOE in 2003 - an 11 percent increase over 2002 levels, adjusting for the effect of the sale of Canadian heavy oil properties in December 2002. Growth is expected primarily from development projects in the Wild River area of the Deep Basin, the Saddle Hills area and the Devonian Slave Point play. ALASKA As part of an overall $63 million exploration and development program for Alaska in 2003, Anadarko plans to test two prospects, including a potential satellite near the Alpine field and another well in the National Petroleum Reserve-Alaska. The company is also planning to conduct 400 square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. of 3-D seismic surveys north and south of the Alpine oilfield and 300 miles of 2-D seismic in the Brooks Range Brooks Range, mountain chain, northernmost part of the Rocky Mts., extending about 600 mi (970 km) from east to west across N Alaska. Mt. Chamberlin, 9,020 ft (2,749 m) high, near the Canadian border, is the highest peak. Foothills. In addition, 16 development wells are planned as part of the ongoing Alpine field development. Net production from Alpine is expected to be 6 million barrels in 2003 - about the same as last year. ALGERIA Anadarko's 2003 Algeria program will focus on exploration and development drilling as part of a $98 million budget. This represents a $41 million decline in capital spending, as major construction projects at the HBNS HBNS Health Behavior News Service and Ourhoud central processing facilities near completion. Anadarko plans to drill or participate in a total of 42 wells to further develop the Ourhoud and Block 404 fields. Delineation drilling also will continue in Block 208, where initial engineering work will begin this year on a new central production facility. Anadarko also expects to drill five exploration wells on Blocks 404 and 208, targeting TAGI and deeper zone potential. Algerian net production is expected to be 23 million barrels - about the same as in 2002. OTHER INTERNATIONAL In other international activity, Anadarko plans to spend $139 million - primarily for ongoing development projects and for high-potential exploration drilling. In Qatar, the company expects to increase gross production from the Al Rayyan oilfield to about 30,000 barrels a day by the fourth quarter of 2003. In addition, Anadarko will drill or participate in seven exploration wells in Qatar, Oman, Gabon, Tunisia and Australia during the first half of 2003. Average production volumes from these areas is expected to increase by almost 19 percent during 2003 to a combined 10 million barrels, primarily from increases in Qatar. Anadarko Petroleum Corporation is one of the world's largest independent oil and gas exploration and production companies. Houston-based Anadarko is active in the U.S., Canada, Algeria and Qatar and is executing strategic exploration programs in several other countries. More information is available at www.anadarko.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that its goals will be achieved. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While Anadarko makes these forward-looking statements in good faith, neither Anadarko nor its management can guarantee that the anticipated future results will be achieved. Anadarko discloses proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. that comply with the Securities and Exchange Commission's (SEC) definitions. Additionally, Anadarko may disclose estimated recoverable reserves, which the SEC guidelines do not allow us to include in filings with the SEC. See Additional Factors Affecting Business in the Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial included in the company's 2001 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. .
ANADARKO PETROLEUM CORPORATION
CAPITAL SPENDING
(in millions of dollars)
2003 Budget 2002 Actual
----------- -----------
Exploration 381 866
Development 1,475 1,093
Gas Gathering and Other 107 78
Capitalized Interest and E&D Costs 337 351
----- -----
Total 2,300 2,388
Gas Gathering
Exploration Development & Other Total
2003 2002 2003 2002 2003 2002 2003 2002
---- ---- ---- ---- ---- ---- ---- ----
Lower 48 84 211 672 445 39 17 795 673
Offshore 98 385 363 175 - - 461 560
Canada 111 129 240 223 12 5 363 357
Alaska 32 87 31 25 - - 63 112
Algeria 14 15 72 121 12 3 98 139
Other
International 42 39 97 104 - - 139 143
Other - - - - 44 53 44 53
Capitalized
Interest
& Overhead - - - - - - 337 351
----- ----- ----- ----- ----- ----- ----- -----
Total 381 866 1,475 1093 107 78 2,300 2,388
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion