Anadarko Reports First-Quarter Earnings; Higher Production Helps Offset Significantly Lower Natural Gas Prices.Business Editors & Energy Writers HOUSTON--(BUSINESS WIRE)--April 25, 2002 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 financial and operating results for the first quarter of 2002 that reflect higher production, but sharply lower natural gas prices. Net income available to common stockholders was $88 million, or 34 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 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. ) for the first quarter of 2002. For the first quarter of 2001, the company reported net income available to common stockholders of $656 million, or $2.50 per share (diluted). In January January: see month. 2002, the Company discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the amortization of goodwill in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." Stated without amortization of goodwill, net income for the first quarter of 2001 would have been $673 million, or $2.57 per share (diluted). 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 during the first quarter of 2002 totaled $399 million, or $1.61 per share (basic), compared with $1.12 billion, or $4.47 per share (basic) reported in the first quarter of 2001. "Anadarko's financial results were affected by dramatically lower energy prices -- in fact natural gas prices dropped 68 percent, and crude oil prices decreased 15 percent year-over-year," said John Seitz Seitz may refer to:
"Our first-quarter results reflect a domestic trend where we're we're Contraction of we are. we're we are seeing more price volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the market, with shorter cycles that are more intense," Seitz added. "Anadarko is pursuing the right strategies that are expected to increase long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for shareholders, regardless of whether prices are up or down." Anadarko's sales volumes were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 50 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 553,000 BOE a day in the first quarter of 2002, compared with 47 million BOE, or 525,000 BOE a day in the first quarter 2001. This 6 percent increase was due primarily to the start-up Start-up The earliest stage of a new business venture. of additional oil production capacity in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. , increased production from the Alpine ALPINE Antihypertensive Treatment and Lipid Profile in a North of Sweden Efficacy Evaluation (drug trial) ALPINE Advanced Logistics Program Integration and Engineering field in 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 , and the March 2001 acquisition of Berkley Berkley (bûr`klē), city (1990 pop. 16,960), Oakland co., SE Mich., a suburb of Detroit; inc. 1932. It is chiefly residential. Petroleum Corp. in 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 . The company's worldwide oil sales volumes increased roughly 12 percent from a year ago to 19 million barrels, while North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas volumes slipped about 1 percent to 162 billion cubic feet. U.S. gas volumes declined 6 percent, while 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. gas volumes increased 29 percent, in line with Anadarko's expectations. "We see 2002 as an opportunity-building year and intend to remain highly focused. We began making adjustments to our portfolio last summer to scale back natural gas development drilling and to focus more on exploration and higher-margin oil projects," Seitz explained. "Given that, these quarterly volumes are right on target with our forecast. We still expect to maintain flat production for the full year at around 200 million BOE," he said. "Anadarko's U.S. onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. production has performed well, with East Texas Bossier Bossier may refer to:
Vernon appears to be meek and unassuming. In reality, however, he is cunning and extremely corrupt, a tool of Gotham City's gangsters. in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. ," Seitz said. "We
also brought on production from some new wells at the South Marsh Island
280 field 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 MexicoGolfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east late in the first quarter. "At today's market levels, we expect to stick pretty close to our previously announced capital budget of $2 billion for 2002," he said. "Although oil and gas prices have rebounded somewhat during the last two months, we still plan to slow down our spending during the second quarter -- as announced in January -- until we see a sustained recovery in prices and cash flow." Anadarko currently is running 35 operated 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. and 21 non-operated rigs -- roughly half the activity level during the first quarter of 2001, when the company had 82 operated and 24 non-operated rigs running. "Anadarko's capital program was intended to be 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. , funded partially with debt for drilling in the first quarter," Seitz said. "We look to pay it down with cash flow during the second half of the year. By front-end loading the drilling program, we took advantage of the momentum we had built coming into this year, and we get maximum impact from this disciplined capital budget. "If prices don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. hold up, we will not overspend o·ver·spend v. o·ver·spent , o·ver·spend·ing, o·ver·spends v.intr. To spend more than is prudent or necessary. v.tr. 1. . If they strengthen, we will increase spending -- but only after we pay down debt to a more comfortable level," Seitz said. OPERATING HIGHLIGHTS -- In Algeria, production began from the fourth and final oil production train at the Hassi Berkine central processing facility (CPF). With the start-up of this train -- which is capable of processing 75,000 barrels of oil per day from five satellite fields in Block 404 -- gross oil production capacity through the CPF increased to 285,000 barrels per day. -- In North Louisiana, the Vernon field portion of the Bossier play has achieved "giant" field status with an estimated gross ultimate recovery of about 1 trillion cubic feet of gas. Anadarko has increased production from 7 million cubic feet (MMcf) a day when the field was acquired in December 1999 to approximately 78 MMcf a day currently. New leasing and drilling has extended the field to the south and west. Five rigs are currently working in this area. -- In the Gulf of Mexico, Anadarko and El Paso Energy Partners signed definitive agreements for the joint development of Anadarko's 100 percent-owned Marco Polo deepwater discovery at Green Canyon 608. The facility design and construction has been contracted for, with installation planned for the third quarter of 2003 and start-up planned for the first quarter of 2004. At a water depth of 4,300 feet, Marco Polo will be the deepest tension-leg platform in the world. Six development wells are planned, with drilling scheduled to start next month. -- Also in the Gulf, the "H" platform at the South Marsh Island 280-281 complex has been completed, and production has reached 99 MMcf a day of gas and 1,000 barrels a day of oil from two discovery wells drilled in 2001. Anadarko has a 50 percent working interest in these wells. In the third quarter, the company expects to install the "I" platform and bring on production from three other recent discoveries. All of these new wells are the result of a reappraisal and redevelopment program in the mature gas field. -- In Canada, the company announced three significant natural gas discoveries. In Northeast British Columbia, the Sahtenah b-83 discovery well flowed at a rate of 9.7 MMcf of gas per day, and the Adsett b-82-G, a Slave Point discovery, tested at 4.8 MMcf per day of gas before stimulation. In the Saddle Hills area of northern Alberta, the 15-28 discovery well was connected to the pipeline and is currently producing 8.9 MMcf per day. -- As part of its ongoing stock repurchase program, Anadarko bought back an additional 1 million shares of common stock at an effective average price of $43 per share, when combined with put option premiums that expired during the first quarter. -- Fortune magazine named Anadarko the "most admired" company in its industry segment and ranked Anadarko employees among the top 10, most-talented employees in any company, across all industries. In addition, Anadarko ranked No. 232 in the annual Fortune 500 listing of the largest U.S. companies based on revenues. EARNINGS GUIDANCE Anadarko expects second-quarter earnings of 75-85 cents per share and cash flow of $2.10-$2.20 per share, based on mid-April Noun 1. mid-April - the middle part of April period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Apr, April - the month following March and preceding May NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). prices. Additional details on the quarter and annual expectations will be provided in the Modeling call referenced below. Anadarko Petroleum Corporation is one of the largest independent oil and gas exploration and production companies in the world. U.S. operations are in Texas, Louisiana, the Mid-Continent and Western states, Alaska and the Gulf of Mexico. Internationally, Anadarko has significant production in Canada, Algeria, 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 it is exploring in several other countries. More information about the company, including recent investor presentations, is available at www.anadarko.com. FINANCIAL DATA Three pages of summary financial data follow. 2002 ANNUAL MEETING OF STOCKHOLDERS The 2002 Annual Meeting of Stockholders will be held today at 10 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 (11 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 ) in The Woodlands Woodlands refers to several places:
EARNINGS CONFERENCE CALL The Earnings Conference Call is set for April 26 at 9:30 a.m. CDT (10:30 a.m. EDT). More details are available at www.anadarko.com. MODELING CONFERENCE CALL The Financial Modeling Conference Call will be held May 3 at 9:30 a.m. CDT (10:30 a.m. EDT) to discuss detailed financial issues that support the company's projections of future-period earnings. More details are available 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 on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant at www.anadarko.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page. 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. 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 (MD&A) 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
Quarter Ended
Summary Financial Information (a) March 31
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$ and shares in millions 2002 2001
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Revenues
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Gas sales $ 353 $ 1,114
Oil and condensate sales 350 361
Natural gas liquids sales 42 73
Marketing sales 607 1,458
Minerals and other 21 3
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Total 1,373 3,009
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Costs and Expenses
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Marketing purchases 596 1,433
Operating expenses 170 157
Administrative and general 72 49
Depreciation, depletion and amortization 267 274
Other taxes 56 83
Impairments related to oil and gas
properties 8 7
Amortization of goodwill -- 17
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Total 1,169 2,020
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Operating Income 204 989
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Other (Income) Expense
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Merger expenses -- 10
Interest expense 49 22
Other (income) expense 23 (96)
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Total 72 (64)
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Income before Income Taxes 132 1,053
Income Taxes 43 389
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Net Income Before Cumulative Effect of
Change in Accounting Principle $ 89 $ 664
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Preferred Stock Dividends 1 3
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Net Income Available to Common Stockholders
Before Cumulative Effect of Change in
Accounting Principle $ 88 $ 661
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Cumulative Effect of Change in Accounting
Principle -- 5
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Net Income Available to Common Stockholders $ 88 $ 656
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Per Common Share
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Net income - before change in accounting
principle - basic $ 0.35 $ 2.64
Net income - before change in accounting
principle - diluted $ 0.34 $ 2.52
Change in accounting principle - basic $ -- $ (0.02)
Change in accounting principle - diluted $ -- $ (0.02)
Net income - basic $ 0.35 $ 2.62
Net income - diluted $ 0.34 $ 2.50
Dividends $ 0.075 $ 0.05
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Average Number of Shares Outstanding
- Basic 248 250
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Average Number of Shares Outstanding
- Diluted 263 263
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(a) Net income for 2001 reflects a change in accounting principle
related to accounting for derivative instruments and hedging
activities.
Cash Flow from Operations before Changes in Assets and Liabilities
--------------------------------------------------------------------
Net income before cumulative effect of
change in accounting principle $ 89 $ 664
Depreciation, depletion and amortization 267 274
Amortization of goodwill -- 17
Amortization of restricted stock 5 --
Non-cash merger expenses -- 3
Interest expense - zero coupon debentures 3 3
Deferred income taxes 9 209
Impairments related to oil and gas
properties 8 7
Other non-cash items 18 (60)
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Total $ 399 $ 1,117
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Capital Expenditures
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Capital spending $ 732 $ 571
Capitalized interest 38 51
Capitalized overhead 43 36
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Total $ 813 $ 658
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Capitalization
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Total debt $ 5,518 $ 4,905
Stockholders' equity 6,374 7,444
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Total $ 11,892 $ 12,349
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Capitalization Ratios
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Total debt 46% 40%
Stockholders' equity 54% 60%
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Total Assets $ 17,106 $ 18,705
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(a) Net income for 2001 reflects a change in accounting principle
related to accounting for derivative instruments and hedging
activities.
Anadarko Petroleum Corporation
Quarter Ended
Volumes and Prices March 31
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2002 2001
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Natural Gas
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United States
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Volumes, billion cubic feet 131 139
Average daily volumes, million cubic feet
per day 1,458 1,548
Price per thousand cubic feet $ 2.13 $ 6.86
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Canada
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Volumes, billion cubic feet 31 24
Average daily volumes, million cubic feet
per day 347 269
Price per thousand cubic feet $ 2.34 $ 6.50
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Other International
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Volumes, billion cubic feet -- 1
Average daily volumes, million cubic feet
per day -- 5
Price per thousand cubic feet $ -- $ 1.03
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Total
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Volumes, billion cubic feet 162 164
Average daily volumes, million cubic feet
per day 1,805 1,822
Price per thousand cubic feet $ 2.17 $ 6.79
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Crude Oil and Condensate
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United States
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Volumes, million barrels 9 8
Average daily volumes, thousand barrels
per day 91 89
Price per barrel $ 19.00 $ 25.44
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Canada
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Volumes, million barrels 3 3
Average daily volumes, thousand barrels per
day 38 31
Price per barrel $ 15.93 $ 16.56
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Algeria
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Volumes, million barrels 5 2
Average daily volumes, thousand barrels per
day 59 25
Price per barrel $ 20.12 $ 25.12
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Other International
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Volumes, million barrels 2 4
Average daily volumes, thousand barrels per
day 24 41
Price per barrel $ 15.38 $ 14.87
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Total
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Volumes, million barrels 19 17
Average daily volumes, thousand barrels per
day 212 186
Price per barrel $ 18.36 $ 21.59
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Natural Gas Liquids
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Total
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Volumes, million barrels 4 3
Average daily volumes, thousand barrels per
day 40 36
Price per barrel $ 11.61 $ 22.54
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Total Barrels of Oil Equivalent (BOE)
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Volumes, million BOE 50 47
Average daily volumes, thousand BOE per day 553 525
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