HOUSTON, Jan. 26 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today announced 1998 operating results, including record
production volumes and reserve growth. In 1998, Anadarko achieved a reserve
replacement ratio of 581% -- the 17th consecutive year that the company has
more than replaced annual production with new reserves, a record unmatched in
the industry. The company plans to report its 1998 fourth quarter and annual
financial results later this week.
Robert J. Allison, Jr., Chairman, President and CEO, said, "1998 was
Anadarko's best year ever for operating results. We added more than a quarter
of a billion energy equivalent barrels of proved reserves at a finding cost of
only $3.13 per barrel. Doing this in a year when our production was also at
an all-time high makes Anadarko's performance all the more significant."
During 1998, the company added 274.3 million energy equivalent barrels
(MMEEBs) -- or 1.65 trillion cubic feet of gas equivalent -- of proved
reserves, a 32% increase from year-end 1997. Most of the additions in
1998 were natural gas reserves from recent discoveries in the Gulf of Mexico's
sub-salt trend. This gives Anadarko a more balanced reserve base in terms of
gas versus oil and U.S. versus foreign. For example, natural gas now
accounts for 64% of the company's domestic proved reserves, up from 55% at
year-end 1997. Anadarko's natural gas reserves represent 47% of the company's
total proved reserves. In 1998, Anadarko produced 47.2 MMEEBs, 7% above 1997
and the highest production level in the company's 40-year history.
"Although low prices affected our financial results for 1998, Anadarko
continued to outperform our industry peers and grow our core assets," said
Allison. "Despite terrible prices, we achieved real economic growth and added
value for our stockholders during this very tough period. We continued to
make significant exploration discoveries in the U.S. and overseas. Anadarko's
operating successes last year reflect the superior quality of our exploration
and development projects and our commitment to grow the company profitably."
Proved Reserves
Anadarko's proved reserves rose 32% from 708.0 MMEEBs in 1997 to
935.1 MMEEBs in 1998. The company's reserves have increased at an average
compound rate of 19% annually over the last five years following significant
discoveries in the Gulf of Mexico, Algeria and Alaska.
Proved natural gas reserves at year-end 1998 totaled 2.65 trillion cubic
feet (Tcf), up 53% from 1.73 Tcf at year-end 1997. Proved reserves of crude
oil, condensate and natural gas liquids grew 18% from 419.7 million barrels
(MMBbls) at year-end 1997 to 494.0 MMBbls at the end of 1998.
In the U.S., Anadarko had 690.1 MMEEBs (net) of proved reserves at year-
end 1998, up 32% from 523.9 MMEEBs (net) at year-end 1997.
At year-end 1998, the company had 245.0 MMBbls (net) of proved reserves of
crude oil and condensate in Algeria, up 33% from 184.1 MMBbls (net) at year-
end 1997. The growth reflects continued success in the company's drilling
program in Algeria during 1998.
Finding Cost
For 1998, Anadarko's worldwide finding cost for proved reserves was
$3.13 per EEB, versus $4.28 in 1997. A better measure of cost of finding
performance is over a five-year period. For 1994-1998, Anadarko's worldwide
finding cost was $3.17 per EEB. The most recent five-year (1993-1997)
worldwide finding cost for the industry was $3.99 per EEB. Industry data for
1998 are not yet available.
The company's U.S. finding cost for 1998 was $3.11 per EEB, versus
$4.79 in 1997. For 1994-1998, Anadarko's U.S. finding cost was $3.61 per EEB.
By comparison, the industry's U.S. finding cost was $5.05 per EEB for
1993-1997. Industry data for 1998 are not yet available.
In 1998, Anadarko's capital expenditures were $917 million, the highest in
its history. Among major capital projects during 1998 was the development of
the Hassi Berkine South Field in Algeria, which began production in May
1998. Other key programs included exploration drilling in the Gulf of
Mexico's sub-salt play, development of the Alpine field on Alaska's North
Slope, and acquisitions of producing properties in Oklahoma and Texas.
Anadarko's 1999 capital budget will be significantly below 1998, reflecting
low prices. The company will announce its 1999 capital plans later this week.
Summary of 1998 Operations Statistics:
U.S. Worldwide
Reserve Additions (MMEEBs)
Drilling Adds 207.9 270.2
Improved Recovery 9.1 9.1
Acquisitions 38.7 38.7
Property Sales 0 0
Revisions (43.7) (43.7)
Total Reserve Adds 212.0 274.3
1998 Production (MMEEBs) 45.8 47.2
Oil and Gas Costs Incurred
(millions ) $658.8 $859.7
Performance Factors
1998 Reserve Replacement 462% 581%
5-year Reserve Replacement 249% 359%
1998 Cost of Finding (per EEB)$3.11 $3.13
5-year Cost of Finding $3.61 $3.17
Total Proved Reserves 690.1 935.1
Gas Oil, Condensate Total
(Bcf) and NGLs (MMBbls) (MMEEBs)
Reserves, December 31, 1997 1,730 419.7 708.0
1998 Production (177) (17.8) (47.2)
1998 Reserve Adds 1,094 92.1 274.3
Reserves, December 31, 1998 2,647 494.0 935.1
% of Total Company Reserves 47% 53% 100%
This press release contains forward-looking statements 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 assurances, however, can be given that its goals
will be achieved. See Additional Factors Affecting Business in the
Management's Discussion and Analysis (MD&A) included in the Company's 1997
Annual Report on Form 10-K.
For more information about Anadarko's worldwide operations, please visit
the company's web site at http://www.anadarko.com on the Internet.
SOURCE Anadarko Petroleum Corporation
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http://www.anadarko.com
Company News On-Call:
http://www.prnewswire.com/comp/038950.html or fax,
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CONTACT:
Analysts and Investors, A. Paul Taylor, Jr.,
281-874-3471, or Steve C. Campbell, 281-874-3260, or Media, Carol
L. Cox, 281-873-3855, all of Anadarko Petroleum Corporation
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