HOUSTON, Jan. 29 /PRNewswire/ -- The following was released today by
Anadarko Petroleum (NYSE: APC):
-- Focus on major development and exploration projects
-- Expect a 5% increase in oil and gas production
The Board of Directors of Anadarko Petroleum Corporation (NYSE: APC) has
approved a capital investment program of $410 million for 1999. About 50% of
the 1999 budget goes for Development of giant oil fields in Algeria and
Alaska, and existing onshore and offshore fields in the U.S. Approximately
25% of the 1999 budget is for Exploration in the Gulf of Mexico's sub-salt
trend, and overseas in the North Atlantic Margin, Eritrea and Tunisia. Nearly
70% of the 1999 budget will be spent in the United States.
In addition to its 1999 capital spending budget, Anadarko expects to
complete a financing arrangement of approximately $150 million that will be
used for expenditures to develop the Tanzanite and Hickory gas discoveries in
the Gulf of Mexico. These funds will be earmarked for development drilling
and construction of platforms and production facilities in order to bring both
fields on production by the fall of 2000.
Anadarko's 1999 budget represents a 55% decrease from the $917 million
spent in 1998, the highest level of capital expenditures in the company's
40-year history. The 1998 capital program featured significantly higher
outlays for all categories of spending -- Development, Exploration and
Property Acquisitions.
Robert J. Allison, Jr., Chairman, President and CEO, said, "Given low oil
and gas prices, we've been forced to take a hard look at our spending plans.
We have deferred some very attractive projects until prices strengthen. We've
high-graded our projects -- selecting the ones that offer the best potential
for adding reserves and increasing production. We are not slowing down on
major development activities in the Gulf of Mexico, Algeria, Alaska and
onshore in the U.S. These projects have low finding and development costs and
excellent economics even at today's prices.
"Although we'll spend less money in 1999, we expect our budget will
support continued growth in oil and gas reserves and give us a 5% increase in
production. We'll continue to evaluate opportunities to expand our worldwide
drilling portfolio. I'm very optimistic about Anadarko's ability to continue
creating value for our stockholders."
$197 Million Budgeted for Development Projects in 1999
Anadarko's 1999 capital plans call for $197 million, or about 50% of the
total budget, for oil and gas development projects, compared to $344 million
in 1998. Key 1999 activities will include development projects in Algeria,
Alaska, the Gulf of Mexico and onshore in the U.S.
In Algeria, Anadarko and its partners expect to continue development
drilling activities at the Hassi Berkine South Field (HBNS) during 1999. An
engineering, procurement and construction (EPC) contract is anticipated to be
awarded this year to expand production facilities at the HBNS Field and
construct new facilities to develop the El Biar Field. Overall, Anadarko
plans to spend approximately $69 million on development activities in Algeria
in 1999, versus $55 million in 1998.
In Alaska, Anadarko has budgeted $64 million for 1999, including
$55 million for development spending at the Alpine oil field on the North
Slope. The company has a 22% working interest in Alpine, a large new oil
field being developed by Anadarko and ARCO Alaska, Inc., which serves as
operator and holds the remaining 78% working interest. Alpine is expected to
begin producing at an initial rate of 40,000 gross barrels of oil per day in
mid-2000, ramping up to 70,000 in mid-2001. During 1999, activities at Alpine
will concentrate on drilling 15 development wells from the first of the
field's two drilling pads, construction of production facilities and
completion of an oil pipeline.
In 1999, Anadarko has earmarked approximately $23 million for development
drilling projects in the Gulf of Mexico, excluding the $150 million financing
arrangement for the Tanzanite and Hickory gas fields. In 1998, the company
spent $71 million on development activities in the Gulf of Mexico.
$97 Million Earmarked for Exploration in 1999
Anadarko has allocated $97 million for exploration activities during 1999,
compared to $257 million in 1998. The company's 1999 exploration program is
centered on the Gulf of Mexico's sub-salt trend where Anadarko expects to
drill three or four wildcat exploration wells in the sub-salt trend. The
company also will participate in exploration programs overseas in the North
Atlantic Margin, Eritrea and Tunisia.
Anadarko believes that cash flow, development financing for Tanzanite and
Hickory, and existing or available credit facilities will provide the majority
of funds to meet its capital and operating requirements for 1999. The company
will continue to evaluate funding alternatives, including property sales and
additional borrowing, to secure other funds for capital development. At this
time, the company has no plans to issue common stock outside of its Dividend
Reinvestment and Stock Purchase Plan.
The following table outlines Anadarko's capital spending for 1996-1998 and
the 1999 budget.
ANADARKO PETROLEUM CORPORATION
CAPITAL SPENDING
(Dollars in millions)
1999 Budget 1998 Actual 1997 Actual 1996 Actual
Exploration $97 $257 $185 $142
Development 197 344 346 149
Acquisitions,
Gas Gathering and Other 15 201 67 69
Capitalized Interest and
Overhead 101 115 88 67
Total $410 $917 $686 $427
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
SOURCE Anadarko Petroleum Corporation
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Related links:
http://www.anadarko.com
Company News On-Call:
http://www.prnewswire.com/comp/038950.html or fax,
800-758-5804, ext. 038950
CONTACT:
media, Carol L. Cox, 281-873-3855, or
analysts and investors, A. Paul Taylor, Jr., 281-874-3471, or
Steve C. Campbell, 281-874-3260, all of Anadarko Petroleum
Corporation
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