Anadarko Reports Record Production, Strong Second-Quarter Earnings; Production Volumes Up 271 Percent Over Second Quarter 2000.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--July 26, 2001 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. ) announced strong financial results for the second quarter of 2001, reflecting higher oil and gas production and higher natural gas prices. Anadarko had net income available to common stockholders of $401 million, or $1.50 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. ) for the second quarter of 2001. By comparison, for the second quarter of 2000, the company reported net income available to common stockholders of $64 million, or 48 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). Results for the second quarter also reflect a lower tax rate 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 , which increased net income by $31 million, or 12 cents a share. 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 totaled $1.05 billion ($4.18 per share) in the second quarter of 2001, compared with $167 million ($1.30 per share) reported in the same period in 2000. "We continued to show excellent volume growth, both quarter-to-quarter and year-over-year, putting us ahead of our forecasts," 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 and chief executive officer. "Total production volumes were up more than 10 percent over the first quarter of this year, and they increased 271 percent from the second quarter of 2000. "We're we're Contraction of we are. we're we are still on target to meet our production growth goal for this year, although we're shifting part of our spending from some 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. natural gas projects in the lower 48 to more profitable opportunities in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east and in Canada. Our capital budget is basically unchanged, and we have 93 company-operated rigs, with working interests in 22 others, making Anadarko the most active driller 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. ," Allison said. The production growth since the first quarter was due mainly to increased volumes from two subsalt Sub´salt` n. 1. (Chem.) A basic salt. See the Note under Salt. fields in the Gulf of Mexico, successful natural gas drilling in Texas and new Canadian New Canadian Noun Canad a recent immigrant to Canada volumes from the Berkley Berkley (bûr`klē), city (1990 pop. 16,960), Oakland co., SE Mich., a suburb of Detroit; inc. 1932. It is chiefly residential. acquisition. The year-over-year volume gain was mainly due to the acquisition of Union Pacific Resources Group in mid-July n. 1. the middle part of July. Noun 1. mid-July - the middle part of July 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" 2000 and to increased production from company operations in Texas, the Gulf of Mexico and 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 . During the second quarter of 2001, Anadarko's production of natural gas, crude oil and natural gas liquids totaled 52 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 570,000 barrels a day, compared to 14 million BOE, or 148,000 barrels a day, for the second quarter of 2000. Oil production facilities in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. were off-line See offline. (jargon) off-line - (Or "offline") 1. Not directly connected to the computer (e.g., an off-line tape drive), or with connection suspended ("take the printer off-line"). Contrast background, on-line. 2. Not now or not here. for 24 days during the second quarter for routine maintenance and safety inspections and to complete the tie-in tie-in n. One thing that is related to or connected with another. Noun 1. tie-in - a fastener that serves to join or connect; "the walls are held together with metal links placed in the wet mortar during construction" of additional production facilities that are expected to go on-line in the third quarter. The company produced 47 million BOE, or 522,000 barrels a day, in the first quarter of 2001. While natural gas prices in the second quarter of 2001 were up by 40 percent, compared with the year-earlier period, crude oil prices were down by an average 20 percent compared to the same period last year. Second-Quarter Highlights -- Anadarko and Phillips Alaska announced the first discoveries in the National Petroleum Reserve-Alaska (NPR-A) since the area was reopened to exploration in 1999. The two companies also announced the discovery of and test production from a satellite oil field near the Alpine oil field on the North Slope of Alaska. The Nanuq accumulation is estimated to contain more than 40 million barrels of gross recoverable reserves. Plans for further delineation and development of the Nanuq field are under evaluation. Anadarko holds a 22 percent working interest in each of these fields. -- In the Gulf of Mexico, Anadarko discovered 170 feet of net pay at the Tarantula subsalt prospect in South Timbalier 308 in 481 feet of water. Anadarko has a 100 percent working interest. At Ship Shoal 216, the C-23 well in shallow water in the shelf area encountered 106 feet of net pay in five intervals. Anadarko is the operator with a 54.6 percent working interest. At South Marsh Island 280, Anadarko encountered 267 feet of net pay in seven pay sands in the No. 6 well in shallow water and has begun drilling well No. 7 to accelerate development of that discovery and to test deeper objectives. Anadarko is the operator, with a 50 percent working interest. -- In Central Texas, the company drilled two more major natural gas producers in the Georgetown formation. The Graham well flowed at a rate of 50 million cubic feet a day (MMcf/d) at 2,200 pounds of flowing tubing pressure, and the Barney well flowed at a rate of 52 MMcf/d at 4,100 pounds of flowing tubing pressure. Anadarko has a 100 percent working interest in both wells. -- In the Bossier play in East Texas, the company's most actively drilled play, Anadarko has made five new discoveries or field extensions in Freestone County in the first half of 2001. Anadarko currently has 26 rigs working in this play in East Texas and seven in North Louisiana. -- The company announced today the sale of its Guatemalan subsidiary, Basic Resources International, to Perenco for $120.5 million. Basic, which produces and refines crude oil, was acquired last year as part of Anadarko's merger with Union Pacific Resources. -- Anadarko is establishing operations in the Middle East with the purchase of Canadian-based Gulfstream Resources Canada Limited for approximately $137 million. Gulfstream has oil and gas reserves and production and significant exploration prospects in Qatar and Oman. The purchase, announced on June 25, is expected to close in the third quarter. Anadarko Petroleum Corporation is the largest independent exploration and production company in the world, with 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. of more than 2 billion BOE. Domestically, it has operations in 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 and Rocky Mountain regions The Rocky Mountain Region is a floristic region within the Holarctic Kingdom in western North America (Canada and the United States) delineated by Armen Takhtajan and Robert F. Thorne. , Alaska and the
Gulf of Mexico. Internationally, it is active in Canada, Algeria,
Tunisia Tunisia (tnē`zhə, ty–), Fr. Tunisie, officially Republic of Tunisia, republic (2005 est. pop. , West Africa West AfricaA region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. , 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. , Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. and the North Atlantic. Financial Data Three pages of summary financial data follow. Earnings Conference Call The Earnings Conference Call will be held today at 10:30 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 (11:30 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 ). More details are available at www.anadarko.com. Modeling Conference Call The Financial Modeling Conference Call will be held Monday Monday: see week. , July July: see month. 30 at 1:30 p.m. CDT (2:30 p.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 throughout the company during the second quarter. The report is available at www.anadarko.com in the News Bureau. 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 2000 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
Summary Financial Quarter Ended Year to Date
Information (a) June 30 June 30
----------------- -----------------
$ and shares in millions 2001 2000 2001 2000
------- ------- ------- -------
Revenues
--------
Gas sales $825 $156 $1,939 $265
Oil and condensate sales 375 93 736 211
Natural gas liquids sales 71 38 144 80
Marketing sales 976 460 2,476 851
Minerals and other 17 1 20 2
------- ------- ------- -------
Total 2,264 748 5,315 1,409
======= ======= ======= =======
Costs and Expenses
------------------
Marketing purchases and
transportation 957 446 2,432 826
Operating expenses 193 62 350 123
Administrative and general 64 30 113 60
Depreciation, depletion
and amortization 320 60 594 119
Other taxes 66 13 149 25
Impairments related to
international properties 8 -- 15 --
Amortization of goodwill 19 -- 36 --
------- ------- ------- -------
Total 1,627 611 3,689 1,153
======= ======= ======= =======
Operating Income 637 137 1,626 256
======= ======= ======= =======
Other (Income) Expense
----------------------
Merger expenses 17 -- 27 --
Interest expense 25 20 47 41
Other (income) expense (4) -- (100) --
------- ------- ------- -------
Total 38 20 (26) 41
======= ======= ======= =======
Income before Income Taxes 599 117 1,652 215
======= ======= ======= =======
Income Taxes
------------
Income taxes 228 50 617 98
Effect of change in Canadian
income tax rate (31) -- (31) --
------- ------- ------- -------
Total 197 50 586 98
======= ======= ======= =======
Net Income Before Cumulative
Effect of Change in
Accounting Principle $402 $67 $1,066 $117
======= ======= ======= =======
Preferred Stock Dividend 1 3 4 5
======= ======= ======= =======
Net Income Available to Common
Stockholders Before
Cumulative Effect of Change
in Accounting Principle $401 $64 $1,062 $112
======= ======= ======= =======
Cumulative Effect of Change
in Accounting Principle -- -- 5 17
======= ======= ======= =======
Net Income Available to
Common Stockholders $401 $64 $1,057 $95
======= ======= ======= =======
Per Common Share
----------------
Net income - before
change in accounting
principle - basic $1.60 $0.50 $4.24 $0.87
Net income - before change
in accounting
principle - diluted $1.50 $0.48 $4.01 $0.84
Change in accounting
principle - basic $ -- $ -- $(0.02) $(0.13)
Change in accounting
principle - diluted $ -- $ -- $(0.02) $(0.13)
Net income - basic $1.60 $0.50 $4.22 $0.74
Net income - diluted $1.50 $0.48 $3.99 $0.72
Dividends $0.05 $0.05 $0.10 $0.10
------- ------- ------- -------
Average Number of Shares
Outstanding - Basic 251 128 251 128
======= ======= ======= =======
Average Number of Shares
Outstanding - Diluted 268 138 266 135
======= ======= ======= =======
Cash Flow from Operations
before Changes in Assets
and Liabilities
-------------------------
Net income before cumulative
effect of change in
accounting principle $402 $67 $1,066 $117
Depreciation, depletion and
amortization 320 60 594 119
Amortization of goodwill 19 -- 36 --
Amortization of restricted
stock -- -- -- 1
Non-cash merger expenses 4 -- 7 --
Interest expense - zero
coupon debentures 3 3 6 4
Deferred income taxes 206 37 415 62
Impairments related to
international properties 8 -- 15 --
Other non-cash items 88 -- 27 --
------- ------- ------- -------
Total $1,050 $167 $2,166 $303
======= ======= ======= =======
Capital Expenditures
--------------------
Capital spending $759 $239 $1,330 $396
Capitalized interest 50 5 101 10
Capitalized overhead 47 23 83 45
------- ------- ------- -------
Total $856 $267 $1,514 $451
======= ======= ======= =======
Capitalization
--------------
Total debt $4,689 $1,656
Stockholders' equity 7,821 1,647
------- ------- ------- -------
Total $12,510 $3,303
======= ======= ======= =======
Capitalization Ratios
---------------------
Total debt 37% 50%
Stockholders' equity 63% 50%
------- ------- ------- -------
Total Assets $18,756 $4,549
======= ======= ======= =======
(a) Revenues and costs and expenses for 2000 reflect a
reclassification of certain amounts related to the SEC's staff
bulletin on revenue recognition. Net income for 2000 also reflects
a change in accounting principle related to accounting for foreign
crude oil inventories. Net income for 2001 reflects a change in
accounting principle related to accounting for derivative
instruments and hedging activities.
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Volumes and Prices June 30 June 30
--------------- --------------
2001 2000 2001 2000
------ ------ ------ ------
Natural Gas
-----------
United States
Volumes, billion
cubic feet 151 49 290 93
Average daily volumes,
million cubic feet
per day 1,651 536 1,600 511
Price per thousand
cubic feet $4.43 $3.20 $5.60 $2.84
------ ------ ------ ------
Canada
Volumes, billion
cubic feet 33 -- 57 --
Average daily volumes,
million cubic feet
per day 362 -- 316 --
Price per thousand
cubic feet $4.82 $ -- $5.53 $ --
------ ------ ------ ------
Other International
Volumes, billion
cubic feet -- -- 1 --
Average daily volumes,
million cubic feet
per day 5 -- 5 --
Price per thousand
cubic feet $1.24 $ -- $1.13 $ --
------ ------ ------ ------
Total
Volumes, billion
cubic feet 184 49 348 93
Average daily volumes,
million cubic feet
per day 2,018 536 1,921 511
Price per thousand
cubic feet $4.49 $3.20 $5.58 $2.84
------ ------ ------ ------
Crude Oil and
Condensate
-------------
United States
Volumes, million
barrels 9 1 16 4
Average daily volumes,
thousand barrels
per day 96 21 92 21
Price per barrel $24.61 $26.29 $25.00 $25.57
------ ------ ------ ------
Canada
Volumes, million
barrels 3 -- 6 --
Average daily volumes,
thousand barrels
per day 36 -- 34 --
Price per barrel $18.84 $ -- $17.79 $ --
------ ------ ------ ------
Algeria
Volumes, million
barrels 2 2 4 4
Average daily volumes,
thousand barrels
per day 17 17 21 23
Price per barrel $25.58 $27.23 $25.30 $27.27
------ ------ ------ ------
Other International
Volumes, million
barrels 4 -- 8 --
Average daily volumes,
thousand barrels
per day 43 -- 42 --
Price per barrel $14.68 $ -- $14.77 $ --
------ ------ ------ ------
Total
Volumes, million
barrels 18 3 34 8
Average daily volumes,
thousand barrels
per day 192 38 189 44
Price per barrel $21.38 $26.71 $21.48 $26.47
------ ------ ------ ------
Natural Gas Liquids
-------------------
Total
Volumes, million
barrels 4 2 7 4
Average daily volumes,
thousand barrels
per day 42 21 39 22
Price per barrel $18.81 $20.10 $20.52 $20.43
------ ------ ------ ------
Total Barrels of Oil
Equivalent (BOE)
--------------------
Volumes, million BOEs 52 14 99 27
------ ------ ------ ------
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