Anadarko Announces Strong First-Quarter Earnings, Increases Capital Budget, Raises 2003 Guidance.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--April 25, 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. ) -- Earnings driven by higher energy prices -- Capital budget increased by 9 percent to $2.5 billion -- Exploration success logged in 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 , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. -- Production volumes set to grow throughout 2003 Anadarko Petroleum Corporation (NYSE:APC) today announced net income available to common shareholders of $418 million, or $1.63 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 $1.26 billion for the first quarter of 2003. Results include an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $47 million, or 18 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. (diluted) related to the Jan. 1, 2003 adoption of Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. ." Net income available to common shareholders before the cumulative effect of the change in accounting principle was $371 million, or $1.45 per share (diluted). For the same period in 2002, the company earned $88 million, or 34 cents per share (diluted), on revenues of $790 million. The increase in earnings in the first quarter of 2003 is primarily due to sharply higher commodity prices, partly offset by lower sales volumes resulting from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of some low-margin North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. producing properties in 2002 and other temporary factors affecting production from international fields. "We had a great start to what we expect to be a year of record earnings for the company," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Allison
Allison, which may come from a medieval Norman nickname for Alice, meaning "noble type", or from the Irish name "Iseult", meaning "fair lady". , Jr., 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. . "Our first quarter performance was stronger than we had forecast, both operationally and financially. "We had some nice discoveries in the Gulf of Mexico, Canada and Algeria, and we still have a number of high-impact exploration wells drilling that will be completed early in the second quarter. "Strong energy prices in the first quarter allowed us to fund an aggressive exploration and development drilling program and still have excess cash flow, which enabled us to further strengthen our balance sheet," Allison said. During the first quarter of 2003, sales volumes totaled 45 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 498,000 BOE per day, down 10 percent from the first quarter of 2002 due to several factors, including:
1) the divestiture in 2002 of approximately 7 million BOE of
annual production in North America, primarily heavy oil in
Canada;
2) the scheduled shut-in of the Al Rayyan oil field in Qatar since
February to install a new production facility;
3) the effect of higher oil prices in Venezuela - where contract
terms with the national oil company provide Anadarko with
specific amounts of revenues that are converted to volume
equivalents at prevailing market prices, giving Anadarko lower
oil volumes when prices increase; and
4) the completion of cost recovery in Algeria. Anadarko previously
had been reimbursed for earlier exploration spending with
additional barrels of oil production.
North American natural gas volumes of 1.7 billion cubic feet (Bcf) per day were 6 percent lower than a year earlier due to a 10 percent decline in U.S. production, partly offset by a 12 percent increase in production from Western Canada
Western Canada, commonly referred to as the West . Anadarko's realized average natural gas price in the first quarter of 2003 was $4.62 per thousand cubic feet (Mcf) - more than double that of the year-earlier period. Oil production in the first quarter was 173,000 barrels a day - 18 percent lower than a year earlier - as a result of the factors mentioned above. Realized oil prices, meanwhile, were 54 percent higher than a year ago, at $28.59 per barrel barrel: see English units of measurement. . "We expect production volumes to build each quarter throughout the year, as we bring on additional production in the Gulf of Mexico, Canada, Qatar Qatar or Katar (both: kŭ`tər, gŭ–, kətär`), officially State of Qatar, independent emirate (2005 est. pop. 863,000), c. and the Lower 48," Allison said. "Total volumes in the fourth quarter of this year should be about 20 percent higher than in the first quarter," he noted. "We're we're Contraction of we are. we're we are still expecting 2003 volumes to be about 5 percent higher than last year's volumes, adjusting for the effect of our 2002 property sales. Next year's volumes are forecast to increase 12 percent over 2003 levels," Allison said. FIRST QUARTER 2003 OPERATING HIGHLIGHTS -- In the Gulf of Mexico, Anadarko made a natural gas discovery at its Jubilee jubilee (j  `bĭlē), in the Bible, a year when alienated property and land were restored, slaves were manumitted, debts were forgiven, and a general sabbatical year was observed in prospect, the first well in Anadarko's EasternGulf exploration program. The Atwater Atwater, city (1990 pop. 22,282), Merced co., central Calif., in the San Joaquin valley; inc. 1922. It is the processing and commercial center of an irrigated farming area. National wildlife refuges are nearby. Valley 349 No. 1 well was drilled in 8,800 feet of water to a target depth of 18,310 feet and encountered 83 feet of net pay. Although the company has not yet determined 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. , the estimated recovery is expected to be 40 million to 50 million BOE. The company believes Jubilee could be commercially produced when hub facilities are established in the area.
Anadarko also authorized construction of an $86 million
production platform for its Tarantula subsalt discovery on
South Timbalier Block 308. The platform will have a capacity
of 100 million cubic feet (MMcf) per day of natural gas and
30,000 barrels per day of oil. First production is expected in
the fourth quarter of 2004.
Anadarko holds a 100 percent working interest in both fields.
-- In 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. , average daily gross natural gas production from the Vernon Vernon, city, Canada Vernon, city (1991 pop. 23,514), S British Columbia, Canada, near the north end of Okanagan Lake. The center of a fruit-growing and dairying area, it has packing and dehydrating plants. area increased from the fourth quarter of 2002 by 26 percent to 120 MMcf per day in the first quarter of 2003. First-quarter drilling focused on extending the Vernon field boundaries Natural or artificial separations or divisions between adjoining properties that show their limits. Boundaries are used to establish private and public ownership by determining the exact location of the points at which one piece of land is distinguishable from another. and developing the "sweet spots." Among the standout wells drilled during the quarter was the Smith 9-1 in the northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. portion of the field, which tested at 11.5 MMcf of gas per day. Anadarko has a 97.7 percent working interest in that well. Four others also tested at rates between 8 MMcf and 10 MMcf per day. Several offsets are planned. -- In Algeria, Anadarko and partners Sonatrach SONATRACH Societe Nationale de Transport et de Traitement des Hydrocarbures (Algeria) , Maersk and Eni-Lasmo announced the partnership's second oil discovery since resuming exploration in October October: see month. 2002 on Block 404 in the Berkine Basin BASIN Boulder Area Sustainability Information Network (Boulder, Colorado) BASIN Brothers And Sisters In Need . The SFSW-1 discovery well was drilled to a total depth of 10,637 feet and encountered 36 feet of net oil pay in the TAGI reservoir reservoir (rĕz`əvôr, -vwär), storage tank or wholly or partly artificial lake for storing water. Building an embankment or dam to preserve a supply of water for irrigation is an ancient practice; India and Egypt have many old and . It tested at a rate of 2,689 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. of 47 degree API gravity The American Petroleum Institute gravity, or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water. If its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks. oil and 4.72 MMcf per day of gas. -- In Canada, Anadarko announced a natural gas discovery in 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. area of Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , increasing proved reserves by over 40 Bcf of gas from this multi-zone play. The Saddle Hills 15-34-75-7W6 discovery well, drilled into the Devonian, flowed at a rate of 15.9 MMcf per day of gas. With this 100 percent-owned well online and other activity this year, total gas production from Saddle Hills increased to 80 MMcf per day, compared with just 2 MMcf per day a year earlier. FINANCIAL DATA Three pages of summary financial data for the first quarter of 2003 follow, as well as one page providing detailed financial guidance for the second quarter and full year 2003. In addition, another page summarizes the company's current hedge positions for the second quarter of 2003 and for the remainder of 2003 and 2004. CAPITAL BUDGET INCREASE The Board of Directors has approved a $200 million increase in the company's 2003 capital budget, which will enable Anadarko to accelerate its exploration program in the Gulf of Mexico, Algeria and Canada and more aggressively develop key producing fields in Canada and East Texas. This increase, about three-quarters Noun 1. three-quarters - three of four equal parts; "three-fourths of a pound" three-fourths common fraction, simple fraction - the quotient of two integers three-quarters npl → of which will go toward exploration, will raise Anadarko's capital budget to $2.5 billion. EARNINGS GUIDANCE Anadarko expects to earn $289 million, or $1.15 per share (diluted) for the second quarter of 2003, with expected cash flow from operating activities of $710 million. The expected average number of diluted shares outstanding is 252 million. For the full year, the company expects earnings of $1.39 billion, or $5.51 per share (diluted) and cash flow from operating activities of $3.16 billion. The expected average number of diluted shares outstanding is 253 million. Second-quarter and full year 2003 estimates of shares outstanding reflect the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. on April 15, 2003, of the company's Zero Coupon A certificate evidencing the obligation to pay an installment of interest or a dividend that must be cut and presented to its issuer for payment when it is due. Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer Convertible Debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. due 2020. Anadarko paid $556.46 per debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. , reflecting the issue price plus accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. as of the redemption date Redemption date The date on which a bond matures or is redeemed. redemption date The date on which a debt security is scheduled to be redeemed by the issuer. The redemption date is the scheduled maturity date or, if applicable, a call date. , which is equivalent to $47.85 per share under the conversion provisions. Price Assumptions Anadarko's 2003 estimates assume average NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil prices of $27 per barrel for the second quarter, dropping to $25 per barrel for the remainder of the year, with a full-year average of $27.75 per barrel. The company's NYMEX natural gas price estimate is $5 per Mcf both for the second quarter and the remainder of the year, with a full-year average of $5.40 per Mcf. To determine realized prices, Anadarko used these estimates, plus or minus an expected price "differential" for each of the company's major producing areas, and any adjustment for hedge positions. For 2003, Anadarko has hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 51 percent of its natural gas production for the second quarter and 45 percent for July July: see month. through December December: see month. . About 32 percent of Anadarko's oil production is hedged through December 2003. The hedge positions are under both fixed-price transactions and "collared col·lar n. 1. The part of a garment that encircles the neck. 2. A necklace. 3. a. A restraining or identifying band of leather, metal, or plastic put around the neck of an animal. b. " transactions, which use price ceilings and floors to help ensure sales prices within a determined range. Volume Assumptions Oil and gas sales volumes are expected to total 48 million BOE in the second quarter. Full-year 2003 sales volumes are expected to total 200 million BOE. EARNINGS CONFERENCE CALL TODAY AT 9:30 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 , 10:30 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 9:30 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 (10:30 a.m. Eastern Daylight Time) to discuss first quarter 2003 results and the company's outlook for the remainder of the year. The dial-in number is 913/981-4901, and the confirmation number is 243168. For complete instructions on how to participate in the conference call and to view additional information that will be presented during the call, visit our website at www.anadarko.com. ANADARKO OPERATIONS REPORT For more details on Anadarko's operations, please refer to the comprehensive report on individual wells drilled during the first quarter. The report will be available this morning at www.anadarko.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page. 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, Qatar and 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 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 that comply with the Securities and Exchange Commission's (SEC) definitions. Additionally, Anadarko may disclose estimated reserves, which the SEC guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. 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 2002 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
Quarter Ended
Summary Financial Information March 31
------------------------
$ and shares in millions 2003 2002
----------------------------------------------------------------------
Revenues
----------------------------------------------------------------------
Gas sales $708 $368
Oil and condensate sales 445 353
Natural gas liquids sales 85 43
Other sales 19 26
----------------------------------------------------------------------
Total 1,257 790
----------------------------------------------------------------------
Costs and Expenses
----------------------------------------------------------------------
Operating expenses 176 183
Administrative and general 88 72
Depreciation, depletion and amortization 290 267
Other taxes 75 56
Impairments related to oil and gas properties 5 8
----------------------------------------------------------------------
Total 634 586
----------------------------------------------------------------------
Operating Income 623 204
----------------------------------------------------------------------
Other (Income) Expense
----------------------------------------------------------------------
Interest expense 60 49
Other (income) expense (37) 23
----------------------------------------------------------------------
Total 23 72
----------------------------------------------------------------------
Income before Income Taxes 600 132
----------------------------------------------------------------------
Income Tax Expense 228 43
----------------------------------------------------------------------
Net Income Before Cumulative Effect of Change
in Accounting Principle $372 $89
----------------------------------------------------------------------
Preferred Stock Dividends 1 1
----------------------------------------------------------------------
Net Income Available to Common Stockholders
Before Cumulative Effect of Change in
Accounting Principle $371 $88
----------------------------------------------------------------------
Cumulative Effect of Change in Accounting
Principle 47 -
----------------------------------------------------------------------
Net Income Available to Common Stockholders $418 $88
----------------------------------------------------------------------
Per Common Share
----------------------------------------------------------------------
Net income - before change in accounting
principle - basic $1.49 $0.35
Net income - before change in accounting
principle - diluted $1.45 $0.34
Change in accounting principle - basic $0.19 $-
Change in accounting principle - diluted $0.18 $-
Net income - basic $1.68 $0.35
Net income - diluted $1.63 $0.34
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Basic 249 248
----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Diluted 258 263
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
------------------------
$ in millions 2003 2002
----------------------------------------------------------------------
Cash Flow from Operating Activities
----------------------------------------------------------------------
Net income before cumulative effect of change
in accounting principle $372 $89
Depreciation, depletion and amortization 290 267
Amortization of restricted stock 3 5
Interest expense - zero coupon debentures 3 3
Deferred income taxes 154 9
Impairments related to oil and gas properties 5 8
Other non-cash items (33) 18
----------------------------------------------------------------------
794 399
(Increase) decrease in accounts receivable (266) 114
Increase (decrease) in accounts payable and
accrued expenses 273 (104)
Other items - net (96) 9
----------------------------------------------------------------------
Net Cash Provided by Operating Activities $705 $418
----------------------------------------------------------------------
----------------------------------------------------------------------
Capital Expenditures
----------------------------------------------------------------------
Capital spending $537 $732
Capitalized interest 34 38
Capitalized overhead 52 43
----------------------------------------------------------------------
Total $623 $813
----------------------------------------------------------------------
March 31, December 31,
2003 2002
----------------------------------------------------------------------
Condensed Balance Sheet
----------------------------------------------------------------------
Current assets $1,604 $1,280
Net properties and equipment 15,904 15,098
Other assets 444 436
Goodwill 1,451 1,434
----------------------------------------------------------------------
Total Assets $19,403 $18,248
----------------------------------------------------------------------
Current liabilities $2,099 $1,861
Long-term debt 5,171 5,171
Other long-term liabilities 4,682 4,244
Stockholders' equity 7,451 6,972
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $19,403 $18,248
----------------------------------------------------------------------
Capitalization
----------------------------------------------------------------------
Total debt $5,425 $5,471
Stockholders' equity 7,451 6,972
----------------------------------------------------------------------
Total $12,876 $12,443
----------------------------------------------------------------------
Capitalization Ratios
----------------------------------------------------------------------
Total debt 42% 44%
Stockholders' equity 58% 56%
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Volumes and Prices March 31
--------------
2003 2002
----------------------------------------------------------------------
Natural Gas
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, billion cubic feet 118 131
Average daily volumes, million cubic feet per day 1,316 1,458
Price per thousand cubic feet $4.51 $2.23
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, billion cubic feet 35 31
Average daily volumes, million cubic feet per day 389 347
Price per thousand cubic feet $4.99 $2.39
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, billion cubic feet 153 162
Average daily volumes, million cubic feet per day 1,705 1,805
Price per thousand cubic feet $4.62 $2.26
----------------------------------------------------------------------
Crude Oil and Condensate
----------------------------------------------------------------------
United States
----------------------------------------------------------------------
Volumes, million barrels 9 9
Average daily volumes, thousand barrels per day 92 91
Price per barrel $27.84 $18.99
----------------------------------------------------------------------
Canada
----------------------------------------------------------------------
Volumes, million barrels 2 3
Average daily volumes, thousand barrels per day 17 38
Price per barrel $27.41 $16.18
----------------------------------------------------------------------
Algeria
----------------------------------------------------------------------
Volumes, million barrels 4 5
Average daily volumes, thousand barrels per day 48 59
Price per barrel $31.82 $20.62
----------------------------------------------------------------------
Other International
----------------------------------------------------------------------
Volumes, million barrels 1 2
Average daily volumes, thousand barrels per day 16 24
Price per barrel $24.51 $15.38
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 16 19
Average daily volumes, thousand barrels per day 173 212
Price per barrel $28.59 $18.54
----------------------------------------------------------------------
Natural Gas Liquids
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
Volumes, million barrels 4 4
Average daily volumes, thousand barrels per day 41 40
Price per barrel $23.12 $11.83
----------------------------------------------------------------------
Total Barrels of Oil Equivalent (BOE)
----------------------------------------------------------------------
Volumes, million BOE 45 50
Average daily volumes, thousand BOE per day 498 553
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Second Quarter 2003
Financial Model - Guidance
1st Quarter 2nd Quarter
Actuals Forecast
-------------------- --------------------
$MM $/ Share $MM $/ Share
------- ------------ ------- ------------
Net Income $418 $1.63 $289 $1.15
Cash Flow from Operating
Activities $705 $710
---------------------------------------------------------------------
Price Deck (NYMEX) ($/Unit) ($/Unit)
Crude Oil ($/Bbl) $33.87 $27.00
Natural Gas ($/Mcf) $6.59 $5.00
Natural Gas Liquids (% of
NYMEX Oil) 68% 68%
---------------------------------------------------------------------
Price Price
Differential Differential
Volumes ($ / Unit) Volumes ($ / Unit)
------- ------------ ------- ------------
Total Sales (MMBOE) 45 48
Crude Oil (MBbl/d): 173 $(5.28) 192 $(2.91)
United States 92 $(6.03) 95 $(2.78)
Canada 17 $(6.46) 15 $(3.00)
Algeria 48 $(2.05) 59 $(1.44)
Other International 16 $(9.36) 23 $(7.14)
Natural Gas (MMcf/d): 1,705 $(1.98) 1,770 $(0.76)
United States 1,316 $(2.09) 1,377 $(0.74)
Canada 389 $(1.60) 393 $(0.85)
Natural Gas Liquids
(MBbl/d): 41 38
United States 39 36
Canada 2 2
---------------------------------------------------------------------
$MM $MM
------- -------
Other Revenues:
Marketing Margin (Sales -
Costs) $3 $14
Minerals and Other $16 $17
$MM $ / BOE $MM $ / BOE
------- ------------ ------- ------------
Costs and Expenses:
Operating Costs $176 $3.94 $199 $4.17
Administrative and General $88 $85
Depreciation, Depletion and
Amortization $290 $6.49 $313 $6.54
Impairments of Oil and Gas
Properties $5 $-
Production and Other Taxes
(% of Rev) $75 5.9% $69 6.0%
---------------------------------------------------------------------
$MM $MM
------- -------
Other Items:
Interest Expense(a) $60 $62
Other (Income) Expense $(37) $6
---------------------------------------------------------------------
Federal Tax Rate 38% 38%
Deferred Taxes (% of Total
Taxes) 66% 59%
---------------------------------------------------------------------
Average Shares Outstanding
(MM)
Basic 249 250
Diluted 258 252
---------------------------------------------------------------------
Capital Investment Program $623 $652
Capital Budget (Estimated) $537 $569
Capitalized Direct Expenses $52 $49
Capitalized Interest $34 $34
Total Year
Forecast
--------------------
$MM $/ Share
------- ----------
Net Income $1,392 $5.51
Cash Flow from Operating Activities $3,160
----------------------------------------------------------------------
Price Deck (NYMEX) ($/Unit)
Crude Oil ($/Bbl) $27.75
Natural Gas ($/Mcf) $5.40
Natural Gas Liquids (% of NYMEX Oil) 72%
----------------------------------------------------------------------
Price
Differential
Volumes ($ / Unit)
------- ------------
Total Sales (MMBOE) 200
Crude Oil (MBbl/d): 200 $(3.33)
United States 96 $(2.92)
Canada 16 $(3.32)
Algeria 63 $(2.17)
Other International 25 $(7.86)
Natural Gas (MMcf/d): 1,867 $(1.06)
United States 1,443 $(1.06)
Canada 424 $(1.07)
Natural Gas Liquids (MBbl/d): 37
United States 35
Canada 2
----------------------------------------------------------------------
$MM
-------
Other Revenues:
Marketing Margin (Sales - Costs) $45
Minerals and Other $64
$MM $ / BOE
------- -----------
Costs and Expenses:
Operating Costs $789 $3.94
Administrative and General $339
Depreciation, Depletion and Amortization $1,301 $6.50
Impairments of Oil and Gas Properties $50
Production and Other Taxes (% of Rev) 282 5.6%
----------------------------------------------------------------------
$MM
-------
Other Items:
Interest Expense(a) $225
Other (Income) Expense $(17)
----------------------------------------------------------------------
Federal Tax Rate 37%
Deferred Taxes (% of Total Taxes) 59%
----------------------------------------------------------------------
Average Shares Outstanding (MM)
Basic 249
Diluted 253
----------------------------------------------------------------------
Capital Investment Program $2,500
Capital Budget (Estimated) $2,158
Capitalized Direct Expenses $204
Capitalized Interest $138
(a) Interest expense for the second quarter and full year includes $8
million of accelerated debt issuance cost amortization associated
with the redemption of the convertible debentures in April.
Anadarko Petroleum Corporation
Hedge Position
As of April 25, 2003
Fixed and
Physical
Contracts 2- Way Collars
----------------------------------------------------------------------
NYMEX
Volume Price Volume Floor Ceiling
----------------------------------------------------------------------
Crude Oil Bbl/d $/Bbl Bbl/d $/Bbl $/Bbl
----------------------------------------------------------------------
United States
2nd Qtr 2003 14,000 $25.39 - $- $-
3rd Qtr 2003 14,000 $25.39 - $- $-
4th Qtr 2003 14,000 $25.39 - $- $-
Remainder Yr 2003 14,000 $25.39 - $- $-
Total Yr 2004 8,000 $23.09 - $- $-
Canada
2nd Qtr 2003 659 $23.80 - $- $-
3rd Qtr 2003 - $- - $- $-
4th Qtr 2003 - $- - $- $-
Remainder Yr 2003 218 $23.80 - $- $-
Total Yr 2004 - $- - $- $-
Algeria
Total Yr 2004 - $- - $- $-
----------------------------------------------------------------------
Total
2nd Qtr 2003 14,659 $25.32 - $- $-
3rd Qtr 2003 14,000 $25.39 - $- $-
4th Qtr 2003 14,000 $25.39 - $- $-
Remainder Yr 2003 14,200 $25.36 - $- $-
Total Yr 2004 8,000 $23.09 - $- $-
----------------------------------------------------------------------
Natural Gas MMcf/d $/Mcf MMcf/d $/Mcf $/Mcf
----------------------------------------------------------------------
United States
2nd Qtr 2003 200.0 $3.89 236.3 $4.70 $5.59
3rd Qtr 2003 430.0 $4.44 6.2 $3.00 $5.00
4th Qtr 2003 430.0 $4.44 6.2 $3.00 $5.00
Remainder Yr 2003 353.9 $4.33 82.3 $4.62 $5.56
Total Yr 2004 200.0 $3.88 6.2 $3.00 $5.00
Canada
2nd Qtr 2003 68.2 $3.37 - $- $-
3rd Qtr 2003 68.2 $3.37 - $- $-
4th Qtr 2003 65.1 $3.24 - $- $-
Remainder Yr 2003 67.1 $3.33 - $- $-
Total Yr 2004 58.9 $3.19 - $- $-
----------------------------------------------------------------------
Total
2nd Qtr 2003 268.2 $3.76 236.3 $4.70 $5.59
3rd Qtr 2003 498.2 $4.29 6.2 $3.00 $5.00
4th Qtr 2003 495.1 $4.28 6.2 $3.00 $5.00
Remainder Yr 2003 421.0 $4.17 82.3 $4.62 $5.56
Total Yr 2004 258.9 $3.72 6.2 $3.00 $5.00
All
3- Way Collars Hedges
----------------------------------------------------------------------
Pur-
Sold chased
Volume Floor Floor Ceiling Volume
----------------------------------------------------------------------
Crude Oil Bbl/d $/Bbl $/Bbl $/Bbl Bbl/d
----------------------------------------------------------------------
United States
2nd Qtr 2003 53,000 $18.62 $23.81 $27.39 67,000
3rd Qtr 2003 53,000 $18.62 $23.81 $27.39 67,000
4th Qtr 2003 53,000 $18.62 $23.81 $27.39 67,000
Remainder Yr 2003 53,000 $18.62 $23.81 $27.39 67,000
Total Yr 2004 8,000
Canada
2nd Qtr 2003 - $- $- $- 659
3rd Qtr 2003 - $- $- $- -
4th Qtr 2003 - $- $- $- -
Remainder Yr 2003 - $- $- $- 218
Total Yr 2004 - $- $- $- -
Algeria
Total Yr 2004 20,000 $18.00 $22.00 $28.07 20,000
----------------------------------------------------------------------
Total
2nd Qtr 2003 53,000 $18.62 $23.81 $27.39 67,659
3rd Qtr 2003 53,000 $18.62 $23.81 $27.39 67,000
4th Qtr 2003 53,000 $18.62 $23.81 $27.39 67,000
Remainder Yr 2003 53,000 $18.62 $23.81 $27.39 67,200
Total Yr 2004 20,000 $18.00 $22.00 $28.07 28,000
----------------------------------------------------------------------
Natural Gas MMcf/d $/Mcf $/Mcf $/Mcf MMcf/d
----------------------------------------------------------------------
United States
2nd Qtr 2003 398.8 $2.91 $3.97 $5.01 835.1
3rd Qtr 2003 398.8 $2.91 $3.97 $5.01 835.0
4th Qtr 2003 398.8 $2.91 $3.97 $5.01 835.0
Remainder Yr 2003 398.8 $2.91 $3.97 $5.01 835.0
Total Yr 2004 268.8 $2.67 $3.65 $5.30 475.0
Canada
2nd Qtr 2003 - $- $- $- 68.2
3rd Qtr 2003 - $- $- $- 68.2
4th Qtr 2003 - $- $- $- 65.1
Remainder Yr 2003 - $- $- $- 67.1
Total Yr 2004 - $- $- $- 58.9
----------------------------------------------------------------------
Total
2nd Qtr 2003 398.8 $2.91 $3.97 $5.01 903.3
3rd Qtr 2003 398.8 $2.91 $3.97 $5.01 903.2
4th Qtr 2003 398.8 $2.91 $3.97 $5.01 900.1
Remainder Yr 2003 398.8 $2.91 $3.97 $5.01 902.1
Total Yr 2004 268.8 $2.67 $3.65 $5.30 533.9
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