HOUSTON, July 29 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today announced financial and operating results for the second
quarter and first six months of 1999.
The company also reported that its Board of Directors has increased the
1999 capital spending budget, which was originally set at $410 million, to
$650 million as a result of steps taken to improve the company's balance sheet
and continued improvement in commodity prices.
For 1999's second quarter, Anadarko reported net income available to
common stockholders of $8 million, or 6 cents per share (diluted), on
$161.5 million of revenues. By comparison, during the same period in 1998,
the company had net income of $2.7 million, or 2 cents per share, on
$137.6 million of revenues.
Anadarko attributed the higher earnings in the second quarter of 1999,
compared to the second quarter of 1998, to increased crude oil prices and
production volumes. The company's average oil price for the second quarter of
1999 was $14.97 per barrel, up 30% from $11.54 per barrel a year ago. In the
second quarter of 1999, Anadarko's oil production rose 42% to an average of
42,000 barrels per day, up from 29,000 barrels per day in 1998's corresponding
period. The increase in volume was driven by oil production from the
company's operations in Algeria, which came onstream in May 1998.
Robert J. Allison, Jr., Chairman and Chief Executive Officer, said, "With
the continuing improvement in commodity prices, we're raising our 1999 capital
spending budget to $650 million. We plan to accelerate activity in both
exploration and development -- primarily gas development projects. As we've
always said, we have a superior portfolio of investment opportunities that can
add real economic value for our stockholders."
Anadarko also said that its oil and gas production volumes for the full-
year 1999 are expected to be affected by several factors, including low
capital spending in the first half of the year, lower-than-expected offshore
production levels, and lower-than-expected oil production from the HBNS Field
in Algeria due to the OPEC reductions and mechanical problems with gas
injection equipment at the field. These lower volumes will partially be
offset by higher-than-expected gas volumes from Anadarko's Bossier Play in
East Texas.
"We now expect that our production volumes in 1999 will be at least level
with 1998. However, today's higher commodity prices should give us
significantly better financial results this year -- cash flow could be 20%
higher than 1998. And, we're moving quickly to reinvest these dollars in
projects that will begin to contribute to Anadarko's production volumes over
the next several months. We still expect to achieve a significant increase in
oil and gas production volumes in the year 2000," said Allison.
In 1999's second quarter, Anadarko's natural gas production averaged
461 million cubic feet per day, essentially level with the same period in
1998. The company's wellhead price for natural gas was $1.95 per thousand
cubic feet (Mcf) for the second quarter of 1999, off slightly from $1.98 per
Mcf a year ago.
During the second quarter of 1999, Anadarko's natural gas liquids (NGLs)
sales volumes averaged 17,000 barrels per day, level with 1998's corresponding
period. The company's average price for NGLs was $11.91 per barrel in 1999's
second quarter, a 9% increase from $10.90 per barrel a year ago.
First Half Results
For 1999's first half, Anadarko reported a net loss available to common
stockholders of $15.1 million, or 12 cents per share (diluted), on
$297.9 million of revenues. The loss reflects a non-cash charge in the first
quarter of 1999 of $20 million before taxes ($13 million after taxes) related
to the remaining operations in the company's Eritrean exploration program.
During the first half of 1998, Anadarko reported net income of $9.7 million,
or 8 cents per share (diluted), on $284.5 million of revenues.
Excluding the foreign impairment, the company's net loss available to
common stockholders for the first half of 1999 was $2.1 million, or two cents
per share (diluted). In addition to the charge for Eritrea, Anadarko said its
earnings for the first six months of 1999, compared to the same period in
1998, were affected by lower natural gas prices, higher interest expense and
preferred stock dividends, partially offset by higher oil production volumes.
In the first half of 1999, Anadarko produced 25.3 million energy
equivalent barrels, up 12% from 22.6 million barrels in 1998's same period.
The increase was attributed to oil production from the company's operations in
Algeria.
Anadarko's oil production for the first six months of 1999 rose 58% to an
average of 43,000 barrels of oil per day, up from 28,000 barrels of oil per
day in 1998's corresponding period. The company's average oil price for the
first half of 1999 was $12.74 per barrel, up 4% from $12.21 per barrel a year
ago.
In 1999's first six months, Anadarko's natural gas production averaged
475 million cubic feet per day, level with the same period in 1998. The
company's wellhead price for natural gas was $1.77 per Mcf for the first half
of 1999, off 12% from $2.00 per Mcf a year ago.
During the first six months of 1999, Anadarko's NGLs sales volumes
averaged 17,000 barrels per day, down 3% from 18,000 barrels per day in 1998's
corresponding period. The company's average price for NGLs was $10.20 per
barrel in 1999's first half, 10% below an average price of $11.31 per barrel a
year ago.
1999 Capital Spending Increase
Anadarko has increased its capital budget for 1999 from $410 million to
$650 million. The largest portion of the company's capital budget increase
will be spent on development. The $197 million originally earmarked for this
category has increased 80% to $353 million to cover projects in the Gulf of
Mexico, East Texas and Alaska. It also reflects the decision not to pursue an
off balance sheet financing arrangement for the Tanzanite and Hickory
development projects. The company increased exploration spending from
$97 million to $171 million.
During the second quarter, Anadarko completed its first offering of common
stock since becoming an independent company in 1986. Aggregate proceeds from
the sale of 6.25 million shares totaled approximately $240.5 million. The
equity issue along with cash flow and proceeds from asset sales will provide
the majority of funds to meet Anadarko's capital and operating requirements
for 1999.
Divestitures Update
Anadarko recently divested of $100 million in properties, the largest
component being the sale of the company's non-operated interests in Blocks
401a and 402a in Algeria to Agip Algeria Exploration B.V. Anadarko owned a
27.5% interest in the contract area, which is operated by BHP and contains
several previously announced oil discoveries. Anadarko will use the
$84.7 million (net) from the sale to develop its primary Algerian operating
areas on Blocks 404 and 208. The agreement is subject to SONATRACH's
preferential right to purchase as well as the approval of state authorities in
Algeria.
Comparative financial highlights follow (amounts in millions, except per
share data):
Quarter Ended June 30
1999 1998
Net income available to common
stockholders $8.0 $2.7
Earnings per share - diluted $0.06 $0.02
Revenues $161.5 $137.6
Average common shares outstanding 125.3 120.0
Six Months Ended June 30
1999 1998
Net income (loss) available to common
stockholders $(15.1)* $9.7
Earnings (loss) per share -- diluted $(0.12)* $0.08
Revenues $297.9 $284.5
Average common shares outstanding 122.9 119.9
*Includes a non-cash charge of $20 million before taxes ($13 million after
taxes) related to the company's remaining operations in Eritrea.
Excluding the foreign impairment, the net loss was $2.1 million, or $0.02
per share (diluted).
1999 Capital Budget
Original Revised
Exploration $ 97 $171
Development 197 353
Gas gathering and other 15 21
Capitalized items 101 105
Total $410 $650
This news 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 1998
Annual Report on Form 10-K.
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information June 30 June 30
$ and shares in millions 1999 1998 1999 1998
Revenues
Gas sales $83.8 $87.7 $161.7 $181.2
Oil and condensate sales 58.1 31.6 101.6 63.0
Natural gas liquids and other 19.6 18.3 34.6 40.3
Total 161.5 137.6 297.9 284.5
Costs and Expenses
Operating expenses 34.4 38.7 68.5 78.9
Administrative and general 23.2 21.7 47.6 43.0
Depreciation, depletion and
amortization 53.9 48.4 110.5 99.7
Other taxes 8.6 8.5 17.7 19.4
Impairments related to
international properties --- --- 20.0 ---
Total 120.1 117.3 264.3 241.0
Operating Income 41.4 20.3 33.6 43.5
Interest Expense 18.5 13.8 37.2 26.1
Income (Loss) before Income Taxes 22.9 6.5 (3.6) 17.4
Income Taxes 12.2 2.2 6.1 6.1
Net Income (Loss) $10.7 $4.3 $(9.7) $11.3
Preferred Stock Dividends 2.7 1.6 5.4 1.6
Net Income (Loss) Available to
Common Stockholders $8.0 $2.7 $(15.1) $9.7
Per Common Share
Net income (loss) - basic $0.06 $0.02 $(0.12) $0.08
Net income (loss) - diluted $0.06 $0.02 $(0.12) $0.08
Dividends $0.05 $0.05 $0.10 $ 0.0875
Average Number of Shares
Outstanding 125.3 120.0 122.9 119.9
Cash Flow from Operations before
Changes in Assets and Liabilities
Net income (loss) $10.7 $4.3 $(9.7) $11.3
Depreciation, depletion and
amortization 53.9 48.4 110.5 99.7
Amortization of restricted stock 0.4 0.3 0.7 0.6
Deferred U.S. income taxes 5.4 2.0 (5.3) 6.0
Impairments related to
international properties --- --- 20.0 ---
Total $70.4 $55.0 $116.2 $117.6
Capital Expenditures
Capital spending $120.9 $171.1 $205.2 $411.9
Capitalized interest 5.5 6.4 11.0 12.3
Capitalized overhead 22.8 22.1 44.8 43.5
Total $149.2 $199.6 $261.0 $467.7
Capitalization
Long-term debt $1,305.8 $1,139.4
Stockholders' equity 1,492.8 1,320.7
Total $2,798.6 $2,460.1
Capitalization Ratios
Long-term debt 47% 46%
Stockholders' equity 53% 54%
Total Assets $3,690.6 $3,360.4
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Volumes and Prices June 30 June 30
1999 1998 1999 1998
Natural Gas
Volumes, billion cubic feet 41.9 42.2 86.0 86.2
Average daily volumes, million
cubic feet per day 461 463 475 476
Price per thousand cubic feet $ 1.95 $ 1.98 $ 1.77 $ 2.00
Crude Oil and Condensate - U.S.
Volumes, thousand barrels 2,167 2,559 4,491 4,811
Average daily volumes, thousand
barrels per day 24 28 25 27
Price per barrel $ 14.65 $ 11.50 $ 12.20 $ 12.21
Crude Oil and Condensate - Algeria
Volumes, thousand barrels 1,647 121 3,291 121
Average daily volumes, thousand
barrels per day 18 1 18 1
Price per barrel $ 15.38 $ 12.25 $ 13.48 $ 12.25
Crude Oil and Condensate - Total
Volumes, thousand barrels 3,814 2,680 7,782 4,932
Average daily volumes, thousand
barrels per day 42 29 43 28
Price per barrel $ 14.97 $ 11.54 $ 12.74 $ 12.21
Natural Gas Liquids
Volumes, thousand barrels 1,530 1,569 3,162 3,273
Average daily volumes, thousand
barrels per day 17 17 17 18
Price per barrel $ 11.91 $ 10.90 $ 10.20 $ 11.31
Total Energy Equivalent Barrels
Volumes, million EEBs 12.3 11.3 25.3 22.6
SOURCE Anadarko Petroleum Corporation
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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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