Anadarko Announces Higher First Quarter 2005 Earnings.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- 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. ) today announced first quarter 2005 net income available to common shareholders of $490 million, or $2.05 per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), on revenues of $1.53 billion. Cash flow from operating activities totaled $936 million in the first quarter and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses before changes in assets and liabilities totaled $895 million.(1) "Anadarko is executing on its strategy to actively develop several large discoveries, grow our unconventional resource plays 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. and explore in high-potential Adj. 1. high-potential - operating on or powered by a high voltage; "a high-voltage generator" high-voltage high-tension - subjected to or capable of operating under relatively high voltage; "high-tension wire" basins around the world," said 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. Jim Hackett Hackett may refer to: In places:
Contraction of we have. we've have taken the tough steps to reshape our portfolio, which today is structured for profitable and sustainable growth. "Anadarko is a different company than we were this time a year ago," Hackett said. "Our asset sales and strategic realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. have us operating from a smaller, more efficient base, which is reflected in the results we achieved this quarter. While volumes were down from last year due to the asset sales, they slightly exceeded the high end of our guidance for the quarter and actually rose about 10 percent, excluding the production from the properties we sold. Also, revenues increased and expenses decreased, providing higher net income. The improvement was further magnified by our stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. Altogether, Anadarko delivered a 32 percent increase in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of on less than a 5 percent increase in revenues." The company continued its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program during the first quarter and bought 2.6 million shares of outstanding common stock for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $200 million. During the first quarter of 2005, sales volumes totaled 41 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 ), or 455,000 BOE per day. Natural gas sales volumes averaged 1,454 million cubic feet (MMcf) per day and Anadarko's average realized natural gas price was $5.66 per thousand cubic feet (Mcf). Oil sales volumes in the first quarter were 177,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. . The company's average realized oil price was $42.18 per barrel barrel: see English units of measurement. . First quarter 2004 net income was $392 million, or $1.55 per share (diluted), on revenues of $1.46 billion. Cash flow from operating activities for the same period was $885 million. Cash flow from operations before changes in assets and liabilities for the first quarter 2004 totaled $944 million.(1) EARNINGS CONFERENCE CALL TODAY AT 9:00 A.M. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , 10:00 A.M. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT Anadarko will host an earnings conference call today at 9:00 a.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time (10:00 a.m. Eastern Daylight Time) to discuss first quarter 2005 results and the company's outlook for the remainder of the year. The dial-in number is 913-981-4900, and the confirmation number is 206120. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.anadarko.com. ANADARKO OPERATIONS REPORT For more details on Anadarko's operations, please refer to the comprehensive report on first quarter drilling activity. The report will be available at www.anadarko.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page. FINANCIAL DATA Seven pages of summary financial data follow, including current hedge positions and guidance. Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by developing, acquiring and exploring for oil and gas resources vital to the world's health and welfare. As of year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2004, the company had 2.37 billion BOE of 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. , making it one of the world's largest independent exploration and production companies. Anadarko's operational focus extends from the deepwater Deepwater or Deep Water may refer to:
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 , up through Texas, Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , the Mid-Continent, western U.S. and
Canadian Rockies The Canadian Rockies comprise the Canadian segment of the North American Rocky Mountains range. The southern end in Alberta and British Columbia borders Idaho and Montana of the USA. The northern end is at the Liard Plain in British Columbia. and onto the North Slope North Slope, Alaska: see Alaska North Slope. of Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States . Anadarko also has
significant production in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. , Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. and Qatar Qatar or Katar (both: kŭ`tər, gŭ–, kətär`), officially State of Qatar, independent emirate (2005 est. pop. 863,000), c. , and exploration
or production positions in several other countries. For more information
about how Anadarko is bringing excellence to the surface, please visit:
www.anadarko.com.
(1) See accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. table for a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to non-GAAP financial measures and statement indicating why management believes the non-GAAP measures are useful information for investors. 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 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. See Regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. Matters and 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 2004 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
Reconciliation of GAAP to Non-GAAP Measures
Below is a reconciliation of cash provided by operating activities
(GAAP) to cash flow from operations before changes in assets and
liabilities (non-GAAP) as required under Regulation G of the
Securities Exchange Act of 1934. The company uses cash flow from
operations before changes in assets and liabilities to demonstrate
the company's ability to internally fund capital expenditures and to
service or incur additional debt. It is useful in comparisons of oil
and gas exploration and production companies because it excludes
fluctuations in assets and liabilities.
Quarter Ended
March 31
----------------
millions 2005 2004
----------------------------------------------------------------------
Cash Flow
----------------------------------------------------------------------
Net cash provided by operating activities $936 $885
Add back:
Change in accounts receivable (140) 39
Change in accounts payable and accrued expenses 44 (20)
Change in other items - net 55 40
----------------------------------------------------------------------
Cash flow from operations before changes in assets and
liabilities $895 $944
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
--------------------
$ and shares in millions 2005 2004
----------------------------------------------------------------------
Revenues
----------------------------------------------------------------------
Gas sales $741 $772
Oil and condensate sales 671 551
Natural gas liquids sales 106 103
Other sales 12 34
----------------------------------------------------------------------
Total 1,530 1,460
----------------------------------------------------------------------
Costs and Expenses
----------------------------------------------------------------------
Direct operating 130 158
Transportation and cost of product 70 57
General and administrative 102 79
Depreciation, depletion and amortization 324 348
Other taxes 85 81
Impairments related to oil and gas properties - 9
----------------------------------------------------------------------
Total 711 732
----------------------------------------------------------------------
Operating Income 819 728
----------------------------------------------------------------------
Interest Expense and Other (Income) Expense
----------------------------------------------------------------------
Interest expense 52 63
Other (income) expense - 60
----------------------------------------------------------------------
Total 52 123
----------------------------------------------------------------------
Income Before Income Taxes 767 605
----------------------------------------------------------------------
Income Tax Expense 276 212
----------------------------------------------------------------------
Net Income $491 $393
----------------------------------------------------------------------
Preferred Stock Dividends 1 1
----------------------------------------------------------------------
Net Income Available to Common Stockholders $490 $392
----------------------------------------------------------------------
Per Common Share
----------------------------------------------------------------------
Net income - basic $2.07 $1.56
Net income - diluted $2.05 $1.55
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Basic 237 252
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Diluted 239 254
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
-------------------------
$ in millions 2005 2004
----------------------------------------------------------------------
Cash Flow from Operating Activities
----------------------------------------------------------------------
Net income $491 $393
Depreciation, depletion and amortization 324 348
Deferred income taxes 73 125
Impairments related to oil and gas
properties - 9
Other noncash items 7 69
----------------------------------------------------------------------
895 944
(Increase) decrease in accounts receivable 140 (39)
Increase (decrease) in accounts payable and
accrued expenses (44) 20
Other items - net (55) (40)
----------------------------------------------------------------------
Net Cash Provided by Operating Activities $936 $885
----------------------------------------------------------------------
----------------------------------------------------------------------
Capital Expenditures
----------------------------------------------------------------------
Capital spending $733 $666
Capitalized interest 17 25
Capitalized overhead 45 41
----------------------------------------------------------------------
Total $795 $732
----------------------------------------------------------------------
March 31, December 31,
2005 2004
----------------------------------------------------------------------
Condensed Balance Sheet
----------------------------------------------------------------------
Cash and cash equivalents $997 $874
Other current assets 1,481 1,628
Net properties and equipment 16,232 15,913
Other assets 484 468
Goodwill 1,308 1,309
----------------------------------------------------------------------
Total Assets $20,502 $20,192
----------------------------------------------------------------------
Current liabilities $2,083 $1,993
Long-term debt 3,643 3,671
Other long-term liabilities 5,234 5,243
Stockholders' equity 9,542 9,285
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $20,502 $20,192
----------------------------------------------------------------------
Capitalization
----------------------------------------------------------------------
Total debt $3,843 $3,840
Stockholders' equity 9,542 9,285
----------------------------------------------------------------------
Total $13,385 $13,125
----------------------------------------------------------------------
Capitalization Ratios
----------------------------------------------------------------------
Total debt 29% 29%
Stockholders' equity 71% 71%
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Volumes and Prices March 31
-----------------
2005 2004
----------------------------------------------------------------------
Natural Gas
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, billion cubic feet 107 121
Average daily volumes, million cubic feet per day 1,183 1,328
Price per thousand cubic feet $5.66 $4.86
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, billion cubic feet 24 36
Average daily volumes, million cubic feet per day 271 395
Price per thousand cubic feet $5.70 $5.12
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, billion cubic feet 131 157
Average daily volumes, million cubic feet per day 1,454 1,723
Price per thousand cubic feet $5.66 $4.92
----------------------------------------------------------------------
Crude Oil and Condensate
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, million barrels 6 9
Average daily volumes, thousand barrels per day 70 85
Price per barrel $38.65 $29.88
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, million barrels 1 1
Average daily volumes, thousand barrels per day 7 15
Price per barrel $45.34 $32.14
----------------------------------------------------------------------
Algeria
----------------------------------------------------------------------
Volumes, million barrels 7 7
Average daily volumes, thousand barrels per day 77 79
Price per barrel $48.36 $31.37
----------------------------------------------------------------------
Other International
----------------------------------------------------------------------
Volumes, million barrels 2 2
Average daily volumes, thousand barrels per day 23 23
Price per barrel $31.30 $23.72
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 16 19
Average daily volumes, thousand barrels per day 177 202
Price per barrel $42.18 $29.94
----------------------------------------------------------------------
Natural Gas Liquids
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 3 4
Average daily volumes, thousand barrels per day 36 49
Price per barrel $32.44 $23.41
----------------------------------------------------------------------
Total Barrels of Oil Equivalent (BOE)
----------------------------------------------------------------------
Volumes, million BOE 41 49
Average daily volumes, thousand BOE per day 455 538
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Hedge Position for 2005 & 2006
As of March 31, 2005
2- Way Collars 3- Way Collars
------------------------ ---------------------------------
Natural Sold Purchased
Gas Volume Floor Ceiling Volume Floor Floor Ceiling
MMMBtu/d $/MMBtu $/MMBtu MMMBtu/d $/MMBtu $/MMBtu $/MMBtu
------------------------ ---------------------------------
United
States
2nd Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
3rd Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
4th Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
------------------------ ---------------------------------
Remainder
Year
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
------------------------ ---------------------------------
------------------------ ---------------------------------
Total
Year
2006 10.0 $4.00 $5.88 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
There are no Fixed Price hedges for the United States.
Fixed and Physical
Contracts
------------------------
Volume NYMEX Price
MMMBtu/d $/MMBtu
------------------------
Canada
2nd Qtr 2005 21.7 $2.98
3rd Qtr 2005 21.7 $2.98
4th Qtr 2005 18.0 $2.95
------------------------
Remainder Year
2005 20.5 $2.97
------------------------
------------------------
Total Year 2006 10.9 $2.87
------------------------
------------------------
There are no Collar hedges for Canada.
------------------------ ---------------------------------
Crude Oil 2- Way Collars 3- Way Collars
------------------------ ---------------------------------
Sold Purchased
Volume Floor Ceiling Volume Floor Floor Ceiling
Bbl/day $/Bbl $/Bbl Bbl/day $/Bbl $/Bbl $/Bbl
------------------------ ---------------------------------
United
States
2nd Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
3rd Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
4th Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
------------------------ ---------------------------------
Remainder
Year 2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2006 822 $22.00 $26.32 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
There are no Crude Oil hedges for production outside of the United
States.
Anadarko Petroleum Corporation
Financial and Operating Guidance
As of April 29, 2005
2nd Quarter Total Year
2005 Forecast 2005 Forecast
-------------------- --------------------
Units Units
-------------------- --------------------
Total Sales (MM BOE) 37 - 39 159 - 164
Crude Oil (MBbl/d): 140 - 150 164 - 174
United States 64 - 66 76 - 79
Canada 6 - 7 5 - 6
Algeria 50 - 54 59 - 64
Other International 18 - 23 23 - 27
Natural Gas (MMcf/d): 1,440 - 1,480 1,450 - 1,490
United States 1,150 - 1,190 1,165 - 1,200
Canada 270 - 290 275 - 300
Natural Gas Liquids (MBbl/d): 30 - 32 30 - 33
United States 28 - 30 28 - 30
Canada 1 - 2 2 - 3
----------------------------------------------------------------------
$/ Unit $/ Unit
-------------------- --------------------
Price Differentials vs NYMEX
(w/o hedges)
Crude Oil ($/Bbl): (4.65) - (6.65) (5.20) - (7.00)
United States (4.25) - (5.50) (5.00) - (6.25)
Canada (9.00) - (11.00) (7.00) - (9.00)
Algeria (1.00) - (3.00) (1.50) - (3.50)
Other International (13.00) - (19.00) (13.00) - (19.00)
Natural Gas ($/Mcf): (0.40) - (0.70) (0.35) - (0.75)
United States (0.35) - (0.65) (0.35) - (0.70)
Canada (0.55) - (0.80) (0.50) - (0.75)
----------------------------------------------------------------------
$MM $MM
-------------------- --------------------
Other Revenues:
Marketing 10 - 14 50 - 70
Minerals and Other 13 - 17 20 - 30
----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
-------------------- --------------------
Direct Operating 3.20 - 3.40 3.05 - 3.35
Transportation and Cost of
Product 1.45 - 1.60 1.40 - 1.55
Depreciation, Depletion and
Amortization 8.00 - 8.30 7.90 - 8.20
Production Taxes (% of
Revenue) 5.5% - 6.0% 5.6% - 5.8%
$MM $MM
-------------------- --------------------
General and Administrative 100 - 110 400 - 430
Impairments Related to Oil
and Gas Properties - - 20 - - 40
Interest Expense 50 - 52 190 - 210
Other (Income) Expense (5) - 5 - - 10
Federal Tax Rate 35% - 38% 35% - 36%
Deferred Taxes (% of Total
Taxes) 35% - 40% 30% - 40%
----------------------------------------------------------------------
Avg. Shares Outstanding (MM)
Basic 235 - 237 235 - 237
Diluted 237 - 239 237 - 239
$MM $MM
-------------------- --------------------
Capital Investment 775 - 825 2,800 - 3,000
Capital Projects 714 - 758 2,555 - 2,735
Capitalized Direct Expenses 45 - 49 180 - 190
Capitalized Interest 16 - 18 65 - 75
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