HOUSTON, Jan. 28 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today announced financial and operating results for the fourth
quarter and annual 1998.
Fourth Quarter Results
For 1998's fourth quarter, Anadarko reported a net loss available to
common stockholders of $56.7 million, or 47 cents per share (diluted), on
$135.5 million of revenues. During the same period in 1997, Anadarko had net
income of $42.0 million, or 35 cents per share (diluted), on $206.1 million of
revenues. The fourth quarter decrease in revenues and earnings was due to
significantly lower commodity prices, higher costs and expenses, and preferred
stock dividends. During 1998's fourth quarter, the company also recorded a
noncash charge of $70 million before taxes ($45 million after taxes) to impair
certain foreign exploration activity; the impairment relates to all
exploratory activity in Peru and Jordan, as well as two dry holes drilled on
the Zula Block in Eritrea. Excluding the foreign impairment, Anadarko's net
loss for the fourth quarter was $12.1 million, or 10 cents per share
(diluted).
Full-Year 1998 Performance
For the full year 1998, Anadarko posted a net loss available to common
stockholders of $49.3 million, or 41 cents per share (diluted), on
$560.2 million of revenues. Net income for 1997 was $107.3 million, or
89 cents per share (diluted), on $675.1 million of revenues. Anadarko's 1998
performance was adversely affected by the steep decline in crude oil, natural
gas and natural gas liquids (NGLs) prices, higher operating expenses,
increased administrative and general costs, increased interest expense,
preferred stock dividends, and the fourth quarter foreign impairment,
partially offset by a 7 % production increase. Excluding the fourth quarter
foreign impairment, Anadarko's net loss for 1998 was $4.7 million, or 4 cents
per share (diluted).
Adding Value for Stockholders
Robert J. Allison, Jr., Chairman, President and CEO, said, "Simply stated,
our financial results for 1998 were lousy due to the collapse in commodity
prices, the worst in more than two decades. We can't change that. What we
can do is continue doing what we do best -- growing our core assets -- our
proved reserves at low finding costs just as we did in 1998. This year we're
going to hold the line on expenses where we can. So, we've taken steps to
reduce cash expenses across the board, lower our lease operating expenses and
decrease administrative and general costs. Our goal for 1999 is to get
through this low price period with higher reserves and production -- that's
adding real value for our stockholders."
Anadarko announced its 1998 operating results, including record production
volumes and reserve growth, on January 26. Highlights of the 1998 operating
results include:
-- A record production volume of 47.2 million energy equivalent barrels
(MMEEBs), up 7% from 1997. The company benefited from initial
production from Algeria, an acquisition of oil and gas producing
properties in central Oklahoma and higher NGLs volumes.
-- A 32% increase in proved reserves, growing from 708 MMEEBs at year-end
1997 to 935.1 MMEEBs at the end of 1998. The reserve increase was
attributed largely to the company's success in the Gulf of Mexico,
Algeria and Alaska.
-- A reserve replacement record of 581% of 1998 production -- Anadarko's
17th consecutive year for more than replacing annual production with
proved reserves.
Additional information on production, prices, operations statistics and
reserve additions appears below.
Eritrea Exploration Update
Anadarko also reported today that its second exploration well offshore
Eritrea was unsuccessful. The Du Rig-Rig No. 1 well was drilled to a total
depth of 2,200 meters on the Zula Block in the Red Sea. Anadarko recorded a
noncash charge in the fourth quarter of 1998 related to the two dry holes
drilled on the Zula Block. The venture's third exploration well, the Edd No.
1 well located on the Edd Block, began drilling on January 16, 1999. Anadarko
serves as operator and holds a 50% interest in both the Zula and Edd
concessions. The remaining interests are held by Agip Eritrea B.V. with 30%
and Burlington Resources with 20%.
Natural Gas, Crude Oil, Condensate and NGLs Volumes and Prices
The table below shows production volumes and prices for commodity sales
during the fourth quarter and full year 1998. Key factors affecting these
results include:
-- For the full year 1998, production volumes reached a record level, up
7% to 47.2 MMEEBs.
-- Oil and condensate production in 1998 rose 22% above 1997 levels, due
largely to initial production from Anadarko's operations in Algeria and
an acquisition of producing properties in central Oklahoma.
Increased oil and condensate production volumes were more than offset
by a 36% decline in prices in 1998 compared to 1997.
-- Natural gas production for the full year 1998 was essentially level
with 1997. Average gas prices fell 17% in 1998 from 1997.
-- NGLs volumes grew 21% in 1998 compared to 1997, reflecting a
restructuring of processing agreements in late 1997. The improved NGLs
volumes were more than offset by a 30% price decline in 1998.
Volumes and Prices
Fourth Quarter Annual
1998 1997 %Change 1998 1997 %Change
Natural Gas
Volumes, billion cubic feet 44.8 47.2 (5%) 176.7 178.7 (1%)
Average daily volumes,
million cubic feet 487 513 (5%) 484 490 (1%)
Price per thousand
cubic feet $1.88 $2.67 (30%) $1.92 $2.30 (17%)
Crude Oil & Condensate
Volumes, thousand barrels 3,256 2,439 33% 11,126 9,083 22%
Average daily volumes,
thousand barrels per day 35 27 33% 30 25 22%
Price per barrel $10.48 $17.40 (40%) $11.51 $18.03 (36%)
Natural Gas Liquids
Volumes, thousand barrels 1,578 1,774 (11%) 6,640 5,467 21%
Average daily volumes,
thousand barrels per day 17 19 (11%) 18 15 21%
Price per barrel $9.14 $14.62 (37%) $10.29 $14.64 (30%)
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
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 (per EEB) $3.61 $3.17
Total Proved Reserves (MMEEBs) 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%
Comparative financial highlights follow (amounts in millions, except per
share data):
Quarter Ended December 31,
1998 1997
Net income (loss) available to common
stockholders $(56.7) $42.0
Earnings (loss) per share - diluted $(0.47) $0.35
Revenues $135.5 $206.1
Average common shares outstanding 120.4 119.7
Year Ended December 31,
1998 1997
Net income (loss) available
to common stockholders $(49.3) $107.3
Earnings (loss) per share - diluted $(0.41) $0.89
Revenues $560.2 $675.1
Average common shares outstanding 120.1 119.4
Anadarko Petroleum Corporation
Quarter Ended Year Ended
Summary Financial Information December 31 December 31
$ and shares in millions 1998 1997 1998 1997
Revenues
Gas sales $85.7 $133.0 $353.1 $418.0
Oil and condensate
sales 35.1 44.0 133.1 168.6
Natural gas liquids
and other 14.7 29.1 74.0 88.5
Total 135.5 206.1 560.2 675.1
Costs and Expenses
Operating expenses 39.8 49.0 160.5 154.7
Administrative and
general 30.0 19.9 94.9 73.6
Depreciation, depletion
and amortization 53.2 54.5 204.5 198.8
Other taxes 9.2 8.5 37.7 42.7
Impairments related to
international
properties 70.0 --- 70.0 ---
Total 202.2 131.9 567.6 469.8
Operating Income (Loss) (66.7) 74.2 (7.4) 205.3
Interest Expense 16.6 12.3 57.7 41.0
Income (Loss) before
Income Taxes (83.3) 61.9 (65.1) 164.3
Income Taxes (29.3) 19.9 (22.9) 57.0
Net Income (Loss) $(54.0) $42.0 $(42.2) $107.3
Preferred Stock
Dividends 2.7 --- 7.1 ---
Net Income (Loss)
Available to Common
Stockholders $(56.7) $42.0 $(49.3) $107.3
Per Common Share
Net income (loss)-
basic $(0.47) $0.35 $(0.41) $0.90
Net income (loss)-
diluted $(0.47) $0.35 $(0.41) $0.89
Dividends $0.05 $0.0375 $0.1875 $0.15
Average Number of
Shares Outstanding 120.4 119.7 120.1 119.4
Cash Flow from
Operations before
Changes in Assets
and Liabilities
Net income (loss) $(54.0) $42.0 $(42.2) $107.3
Depreciation, depletion
and amortization 53.2 54.5 204.5 198.8
Amortization of
restricted stock 0.3 0.9 1.1 2.3
Deferred U.S. income
taxes (27.4) 19.3 (22.6) 48.3
Impairments related to
international
properties 70.0 --- 70.0 ---
Total $42.1 $116.7 $210.8 $356.7
Capital Expenditures
Capital spending $214.4 $170.9 $801.5 $598.2
Capitalized interest 6.3 5.5 24.7 21.1
Capitalized overhead 23.9 13.4 90.8 66.9
Total $244.6 $189.8 $917.0 $686.2
Capitalization
Long-term debt
(including short-
term portion) $ 1,425.4 $955.7
Stockholders' equity 1,259.5 1,116.8
Total $ 2,684.9 $ 2,072.5
Capitalization Ratios
Long-term debt
(including short-
term portion) 53% 46%
Stockholders' equity 47% 54%
Total Assets $ 3,633.0 $ 2,992.5
Anadarko Petroleum Corporation
Quarter Ended Year Ended
Volumes and Prices December 31 December 31
1998 1997 1998 1997
Natural Gas
Volumes, billion
cubic feet 44.8 47.2 176.7 178.7
Average daily volumes,
million cubic feet
per day 487 513 484 490
Price per thousand
cubic feet $1.88 $2.67 $1.92 $2.30
Crude Oil and Condensate
Volumes, thousand
barrels 3,256 2,439 11,126 9,083
Average daily volumes,
thousand barrels per day 35 27 30 25
Price per barrel $ 10.48 $ 17.40 $ 11.51 $ 18.03
Natural Gas Liquids
Volumes, thousand
barrels 1,578 1,774 6,640 5,467
Average daily volumes,
thousand barrels per day 17 19 18 15
Price per barrel $9.14 $ 14.62 $ 10.29 $ 14.64
Total Energy Equivalent
Barrels
Volumes, million EEBs 12.3 12.1 47.2 44.3
Additional financial and operating information appears on the
attached pages.
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 additional information, contact:
Analysts and Investors: Media:
A. Paul Taylor, Jr. Carol L. Cox
Phone: 281-874-3471 Phone: 281-873-3855
Steve C. Campbell
Phone: 281-874-3260
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.prnewswire.com/comp/038950.html or fax,
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CONTACT:
A. Paul Taylor of Anadarko Petroleum
Corporation, 281-875-1101
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