Anadarko Announces Higher First-Quarter 2006 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 2006 net income available to common shareholders totaled $660 million, or $2.84 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. ), which represents a 39 percent increase compared with $2.05 per share (diluted) in the 2005 first quarter. Revenues rose 28 percent across the same period to $1.95 billion. Cash flow from operating activities was $1.22 billion in the first quarter, and discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. totaled $1.19 billion.(1) "Anadarko's first quarter results were very strong and, importantly, we continued to make progress on major development projects that should help us deliver excellent volume growth in the remaining three quarters of this year and into 2007," Anadarko Chairman, 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:
"Our 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 operations at the K2 complex achieved production growth during the first quarter despite mechanical issues that have since been resolved," Hackett added. "With three wells on-line and producing a combined gross 37,000 barrels of oil equivalent per day, we remain on track to have all eight existing K2, K2 North and Genghis Khan Genghis Khan: see Jenghiz Khan. Genghis Khan or Chinggis Khan orig. Temüjin (born 1162, near Lake Baikal, Mongolia—died Aug. wells producing by 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. . Those high-rate wells are expected to help us deliver a 15 percent increase in total daily production from January January: see month. through December December: see month. this year, as well as a full-year 2007 growth rate of more than 9 percent." Hackett noted, however, that full-year 2006 volume guidance has been reduced approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3 percent to between 161 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 ) and 166 million BOE, primarily due to the expected outcome of the company's Venezuelan contract renegotiation, in addition to the first quarter mechanical issues and resulting development delays at the K2 complex. Sales volumes of natural gas, crude oil and natural gas liquids in the first quarter totaled 38 million BOE, or 419,000 BOE per day. Natural gas sales volumes averaged 1,366 million cubic feet per day, at an average price of $7.62 per thousand cubic feet. Oil sales volumes in the first quarter averaged 157,000 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. , with an average price of $58.07 per barrel barrel: see English units of measurement. . Natural gas liquids sales volumes averaged 34,000 barrels per day, at an average price of $39.97 per barrel. On a consecutive basis, overall sales volumes were down slightly from the fourth quarter 2005, largely due to the timing of tanker loadings in Qatar Qatar or Katar (both: kŭ`tər, gŭ–, kətär`), officially State of Qatar, independent emirate (2005 est. pop. 863,000), c. . Anadarko has continued to buy back stock under its current $1 billion stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program that began in November November: see month. 2005. During the first quarter, the company repurchased more than 1.2 million common shares for approximately $118 million, bringing the total since November to 3.9 million shares for $364 million, at an average cost of $92.70 per share (including all transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). ), versus today's closing stock price of $106.73 per share. CONFERENCE CALL TOMORROW AT 9 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 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 a conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , April 28, at 9 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 a.m. Eastern Daylight Time) to discuss first-quarter results and the company's outlook for 2006. The dial-in number is 913-981-4900, and the confirmation number is 3198434. 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 exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2005, the company had 2.45 billion barrels-equivalent 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 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. extends from the deepwater Gulf of Mexico, up through the western U.S. and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. regions 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's international activities are focused on major positions in North Africa, the Middle East and Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. , as well as exploration or production operations 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 such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release. See "Risk Factors" in the company's 2005 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. and other public filings, press releases and discussions with company management. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
Below is a reconciliation of cash provided by operating activities
(GAAP) to discretionary cash flow (non-GAAP) as required under
Regulation G of the Securities Exchange Act of 1934. The company uses
discretionary cash flow 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 2006 2005
----------------------------------------------------------------------
Cash Flow
----------------------------------------------------------------------
Net cash provided by operating activities $1,222 $936
Add back:
Change in accounts receivable (423) (140)
Change in accounts payable and accrued
expenses 305 44
Change in other items - net 83 55
----------------------------------------------------------------------
Discretionary Cash Flow $1,187 $895
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
-----------------------
$ and shares in millions 2006 2005
----------------------------------------------------------------------
Revenues
----------------------------------------------------------------------
Gas sales $936 $739
Oil and condensate sales 824 668
Natural gas liquids sales 121 106
Other sales 73 13
----------------------------------------------------------------------
Total 1,954 1,526
----------------------------------------------------------------------
Costs and Expenses
----------------------------------------------------------------------
Direct operating 167 130
Transportation and cost of product 89 70
General and administrative 117 102
Depreciation, depletion and amortization 360 324
Other taxes 112 85
Impairments related to oil and gas properties 13 -
----------------------------------------------------------------------
Total 858 711
----------------------------------------------------------------------
Operating Income 1,096 815
----------------------------------------------------------------------
Interest Expense and Other (Income) Expense
----------------------------------------------------------------------
Interest expense 51 52
Other (income) expense (2) (4)
----------------------------------------------------------------------
Total 49 48
----------------------------------------------------------------------
Income Before Income Taxes 1,047 767
----------------------------------------------------------------------
Income Tax Expense 386 276
----------------------------------------------------------------------
Net Income $661 $491
----------------------------------------------------------------------
Preferred Stock Dividends 1 1
----------------------------------------------------------------------
Net Income Available to Common Stockholders $660 $490
----------------------------------------------------------------------
Per Common Share
----------------------------------------------------------------------
Net income - basic $2.87 $2.07
Net income - diluted $2.84 $2.05
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Basic 230 237
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Diluted 232 239
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
-------------------------
$ in millions 2006 2005
----------------------------------------------------------------------
Cash Flow from Operating Activities
----------------------------------------------------------------------
Net income $661 $491
Depreciation, depletion and amortization 360 324
Deferred income taxes 132 73
Impairments related to oil and gas properties 13 -
Other noncash items 21 7
----------------------------------------------------------------------
1,187 895
(Increase) decrease in accounts receivable 423 140
Increase (decrease) in accounts payable and
accrued expenses (305) (44)
Other items - net (83) (55)
----------------------------------------------------------------------
Net Cash Provided by Operating Activities $1,222 $936
----------------------------------------------------------------------
----------------------------------------------------------------------
Capital Expenditures
----------------------------------------------------------------------
Capital spending $921 $733
Capitalized interest 15 17
Capitalized overhead 48 45
----------------------------------------------------------------------
Total $984 $795
----------------------------------------------------------------------
March 31, December 31,
2006 2005
----------------------------------------------------------------------
Condensed Balance Sheet
----------------------------------------------------------------------
Cash and cash equivalents $820 $739
Other current assets 1,715 2,177
Net properties and equipment 18,474 17,862
Other assets 662 614
Goodwill 1,196 1,196
----------------------------------------------------------------------
Total Assets $22,867 $22,588
----------------------------------------------------------------------
Current liabilities $2,186 $2,403
Long-term debt 3,392 3,555
Other long-term liabilities 5,732 5,579
Stockholders' equity 11,557 11,051
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $22,867 $22,588
----------------------------------------------------------------------
Capitalization
----------------------------------------------------------------------
Total debt $3,627 $3,677
Stockholders' equity 11,557 11,051
----------------------------------------------------------------------
Total $15,184 $14,728
----------------------------------------------------------------------
Capitalization Ratios
----------------------------------------------------------------------
Total debt 24% 25%
Stockholders' equity 76% 75%
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Volumes and Prices March 31
---------------------
2006 2005
----------------------------------------------------------------------
Natural Gas
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, billion cubic feet 98 107
Average daily volumes, million cubic feet per day 1,091 1,183
Price per thousand cubic feet $7.58 $5.64
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, billion cubic feet 25 24
Average daily volumes, million cubic feet per day 275 271
Price per thousand cubic feet $7.78 $5.70
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, billion cubic feet 123 131
Average daily volumes, million cubic feet per day 1,366 1,454
Price per thousand cubic feet $7.62 $5.65
----------------------------------------------------------------------
Crude Oil and Condensate
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, million barrels 6 6
Average daily volumes, thousand barrels per day 71 70
Price per barrel $57.24 $38.30
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, million barrels - 1
Average daily volumes, thousand barrels per day 5 7
Price per barrel $47.60 $45.34
----------------------------------------------------------------------
Algeria
----------------------------------------------------------------------
Volumes, million barrels 6 7
Average daily volumes, thousand barrels per day 62 77
Price per barrel $63.11 $48.36
----------------------------------------------------------------------
Other International
----------------------------------------------------------------------
Volumes, million barrels 2 2
Average daily volumes, thousand barrels per day 19 23
Price per barrel $48.00 $31.30
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 14 16
Average daily volumes, thousand barrels per day 157 177
Price per barrel $58.07 $42.04
----------------------------------------------------------------------
Natural Gas Liquids
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 3 3
Average daily volumes, thousand barrels per day 34 36
Price per barrel $39.97 $32.44
----------------------------------------------------------------------
Total Barrels of Oil Equivalent (BOE)
----------------------------------------------------------------------
Volumes, million BOE 38 41
Average daily volumes, thousand BOE per day 419 455
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Commodity Hedge Position for 2nd Quarter 2006 and Beyond
As of March 31, 2006
Natural Gas
United States
------------------------------------
2 - Way Collars
------------------------------------
Volume Floor Ceiling
MMMBtu/d $/MMBtu $/MMBtu
------------------------------------
------------------------------------
Remainder Year 2006 10.0 $4.00 $5.88
------------------------------------
------------------------------------
Total Year 2007 6.0 $4.00 $6.02
------------------------------------
------------------------------------
Canada
------------------------
Fixed Price
------------------------
Volume NYMEX Price
MMMBtu/d $/MMBtu
------------------------
------------------------
Remainder Year 2006 10.9 $2.87
------------------------
------------------------
Total Year 2007 4.5 $2.83
------------------------
Crude Oil
United States
--------------------- --------------------------------
2 - Way Collars 3- Way Collars
--------------------- --------------------------------
Volume Floor Ceiling Volume Sold Purchased Ceiling
Floor Floor
Bbl/day $/Bbl $/Bbl Bbl/day $/Bbl $/Bbl $/Bbl
--------------------- --------------------------------
--------------------- --------------------------------
Remainder Year
2006 822 $22.00 $26.32 - $- $- $-
--------------------- --------------------------------
--------------------- --------------------------------
Total Year 2007 542 $22.00 $26.32 15,000 $35.00 $50.00 $89.16
--------------------- --------------------------------
--------------------- --------------------------------
Total Year 2008 12,000 $35.00 $50.00 $87.66
--------------------------------
--------------------------------
Total Year 2009 13,000 $35.00 $50.00 $89.04
--------------------------------
--------------------------------
Total Year 2010 8,000 $35.00 $50.00 $86.49
--------------------------------
--------------------------------
Total Year 2011 3,000 $35.00 $50.00 $86.00
--------------------------------
--------------------------------
Total Year 2012 1,500 $35.00 $50.00 $92.50
--------------------------------
--------------------------------
Algeria
--------------------------------
--------------------------------
Total Year 2008 19,000 $33.51 $48.51 $86.73
--------------------------------
--------------------------------
Total Year 2009 20,000 $33.51 $48.51 $86.62
--------------------------------
--------------------------------
Total Year 2010 10,000 $33.53 $48.53 $86.98
--------------------------------
--------------------------------
Anadarko Petroleum Corporation
Financial and Operating Guidance
As of April 27, 2006
2nd Quarter Total Year
2006 Forecast 2006 Forecast
----------------- -----------------
Units Units
----------------- -----------------
Total Sales (MM BOE) 38 - 40 161 - 166
Crude Oil (MBbl/d): 159 - 175 169 - 183
United States 77 - 85 87 - 93
Canada 4 - 6 5 - 6
Algeria 63 - 68 63 - 68
Other International 14 - 17 14 - 16
Natural Gas (MMcf/d): 1,340 - 1,410 1,395 - 1,445
United States 1,070 - 1,130 1,115 - 1,150
Canada 265 - 285 280 - 295
Natural Gas Liquids (MBbl/d): 32 - 36 33 - 37
United States 30 - 33 31 - 34
Canada 2 - 3 2 - 3
----------------------------------------------------------------------
$/ Unit $/ Unit
----------------- -----------------
Price Differentials vs NYMEX (w/o
hedges)
Crude Oil ($/Bbl): (5.00) - (7.00) (5.00) - (7.00)
United States (5.00) - (7.00) (6.00) - (7.00)
Canada (9.00) - (15.00) (11.00) - (13.00)
Algeria (1.50) - (2.50) (1.50) - (2.25)
Other International (12.50) - (15.00) (14.00) - (17.00)
Natural Gas ($/Mcf): (0.75) - (1.50) (1.00) - (1.75)
United States (0.75) - (1.50) (1.00) - (1.75)
Canada (0.90) - (1.50) (1.00) - (1.75)
----------------------------------------------------------------------
$MM $MM
----------------- -----------------
Other Revenues:
Marketing 10 - 15 90 - 110
Minerals and Other 10 - 20 70 - 90
----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
----------------- -----------------
Direct Operating 4.15 - 4.30 4.00 - 4.15
Transportation and Cost of
Product 2.00 - 2.40 2.00 - 2.40
Depreciation, Depletion and
Amortization 9.50 - 9.90 9.75 - 9.95
Production Taxes (% of Revenue) 6.3% - 6.7% 5.9% - 6.3%
$MM $MM
----------------- -----------------
General and Administrative 120 - 130 465 - 495
Impairments Related to Oil and
Gas Properties - - - 13 - 13
Interest Expense 50 - 51 195 - 205
Other (Income) Expense (5) - 5 (10) - 10
Federal Tax Rate 34% - 36% 35% - 37%
Deferred Taxes (% of Total
Taxes) 30% - 50% 37% - 40%
----------------------------------------------------------------------
Avg. Shares Outstanding (MM) (a)
Basic 228 - 230 229 - 231
Diluted 230 - 232 231 - 233
$MM $MM
----------------- -----------------
Capital Investment 1,050 - 1,150 3,800 - 4,100
Capital Projects 985 - 1,075 3,530 - 3,815
Capitalized Direct Expenses 50 - 55 210 - 220
Capitalized Interest 15 - 20 60 - 65
(a) Does not include effects of the proposed two-for-one stock split.
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