Anadarko Petroleum Announces Record Results for Quarter
Company Earns $1.24 Per Share Before Special Item, Expects 20 Percent
Improvement in Earnings for Fourth Quarter
HOUSTON, Oct. 26 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today reported that net income available to common shareholders in
the third quarter totaled $245.7 million ($1.07 per share - basic). Anadarko
attributed its performance to continued growth in production volumes and to
strong commodity prices. Anadarko's results include the effect of its
acquisition of Union Pacific Resources Group Inc. (UPR), which closed July 14.
The reported net income includes a charge of $63.7 million ($40.8 million
after taxes) for a portion of the costs associated with the UPR acquisition.
Excluding this item, Anadarko's net income for the third quarter was
$286.5 million, or $1.24 per share (basic), on revenues of $956.1 million.
For the same period in 1999, Anadarko's net income was $18.8 million, or
$0.15 per share (basic), on revenues of $180.3 million.
"Anadarko posted a remarkable performance in the third quarter," said
Robert J. Allison, Jr., Anadarko Chairman and CEO. "Even so, given the
current pricing outlook, we expect earnings to be about 20 percent higher in
the fourth quarter. As promised, significant new oil and gas production
should come on line later this year that will give us 17 percent volume growth
in the fourth quarter. This growth will come from four key areas: the Alpine
Field on the North Slope of Alaska, the Tanzanite and Hickory fields in the
Gulf of Mexico, and our natural gas play in East Texas. We're still on track
to more than double last year's production and to produce more than
200 million energy equivalent barrels in 2001.
"Delivering on our promise of 'double digit' production growth means we
have a very active drilling program, with 69 company-operated rigs running in
the United States, making Anadarko the most active domestic driller. Anadarko
began to ramp up exploration and development drilling in 1999 when we saw
fundamental improvements in oil and gas markets. We believe strong prices for
oil and gas -- due to the tight balance between supply and growing demand --
will last for a long time. We plan to expand our activity even more in the
future, reinvesting cash flow that will help this country meet its growing
demand for energy."
Cash flow from operations during the third quarter of 2000 totaled a
record $638.4 million ($2.77 per share), a 627 percent increase over the
$87.8 million ($0.69 per share) in the corresponding quarter of 1999.
During the third quarter of 2000, Anadarko produced approximately
39.8 million energy equivalent barrels, up 243 percent from the 11.6 million
barrels produced in the same period of 1999. The increased production comes
as a result of gas production growth in East Texas, oil production growth in
Algeria and the acquisition of UPR.
Oil prices in the third quarter averaged $26.73 per barrel, compared with
$19.32 per barrel in the same quarter last year. Total production of crude
oil and condensate in the third quarter averaged 139,000 barrels per day, up
363 percent from 30,000 barrels per day in the third quarter of 1999.
Natural gas prices at the wellhead averaged $3.80 per thousand cubic feet
(Mcf) during the quarter, compared with an average of $2.40 per Mcf in the
comparable quarter of 1999. Natural gas production in the third quarter of
2000 averaged 1,498 million cubic feet (MMcf) per day, an increase of 229
percent over the 456 MMcf per day produced in the same period last year.
Prices during the quarter for Anadarko's natural gas liquids (NGLs)
averaged $21.18 per barrel, compared with the $14.76 per barrel average in the
same quarter last year. Volumes of NGLs during the quarter averaged
43,000 barrels per day, up 126 percent from 19,000 barrels per day in the
third quarter of 1999.
First Nine Months
For the nine-month period ending Sept. 30, 2000, Anadarko reported net
income available to common shareholders of $359.7 million, or $2.22 per share
(basic), on $1.5 billion of revenues. Excluding the item discussed above,
Anadarko's net income available to common shareholders for the first nine
months of 2000 was $400.5 million, or $2.47 per share (basic). By comparison,
through the first nine months of 1999, Anadarko reported net income available
to common shareholders of $3.7 million, or $0.03 per share (basic) on revenues
of $477.4 million.
Cash flow from operations in the first nine months of 2000 totaled
$943.3 million ($5.82 per share) compared with $204 million ($1.64 per share)
for the same period last year. Anadarko attributed the improved revenues and
earnings to significantly increased production volumes, higher commodity
prices and the acquisition of UPR.
During the first nine months of 2000, Anadarko produced approximately
67.2 million energy equivalent barrels, up 82 percent from the 36.8 million
barrels produced in the same period of 1999.
Anadarko's production of crude oil and condensate for the first nine
months of 2000 averaged 76,000 barrels per day, up 95 percent from the average
of 39,000 barrels per day in the comparable 1999 period. Anadarko's average
oil price for the 2000 period was $26.79 per barrel, compared with $14.47 per
barrel in the same period last year.
In the first nine months of 2000, Anadarko's natural gas production
averaged 843 MMcf per day, up 80 percent from the average of 468 MMcf per day
produced a year earlier. The wellhead price for natural gas in the first nine
months of 2000 averaged $3.42 per Mcf, compared with $1.97 per Mcf in the same
period last year.
Anadarko's NGLs volumes during the first nine months of 2000 averaged
29,000 barrels per day, an increase of 61 percent over the 18,000 barrels per
day produced in the same period in 1999. The average price per barrel for
NGLs during the 2000 period was $20.81, compared with $11.84 a year earlier.
Outlook for the Future
Anadarko said the Company expects at least a 20 percent improvement in
earnings for the fourth quarter of 2000. This forecast is based on today's
outlook for NYMEX benchmark prices minus usual Company net price
differentials. The forecast assumes production volumes will be about
17 percent higher than third quarter volumes, due to the expected start-up of
three new production facilities in Alaska and the Gulf of Mexico. Cost and
expense run rates are not expected to change materially for the fourth
quarter.
Attached are the Company's summary financial statement and operations
report on third quarter exploration and production activities.
Anadarko Comparative Financial Highlights
Comparative financial highlights follow (amounts in millions, except per
share data):
Quarter Ended Sept. 30
2000 1999
Revenues $956.1 $180.3
Net income available
to common stockholders $245.7* $18.8
Earnings per share - basic $1.07 $0.15
Average common shares outstanding 230.4 127.4
Nine Months Ended Sept. 30
2000 1999
Revenues $1,509.1 $477.4
Net income available to common
stockholders $359.7* $3.7**
Earnings per share - basic $2.22 $0.03
Average common shares outstanding 162.2 124.4
* Results for 2000 include the acquisition of UPR on July 14, 2000, using
the purchase method of accounting. Includes a charge of $63.7 million
($40.8 million after taxes) related to a portion of the UPR merger
expense. Excluding this item, net income available to common
stockholders for the quarter was $286.5 million, or $1.24 per share
(basic), and for the nine months was $400.5 million, or $2.47 per share
(basic).
** Includes a non-cash charge of $20 million before taxes ($12.8 million
after taxes) related to the company's Eritrean exploration operations.
Excluding the foreign impairment, net income available to common
stockholders was $16.5 million, or $0.13 per share (basic).
Except for historical information, all other information in this
presentation consists of forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those projected, anticipated or implied.
The most significant of these risks and uncertainties are described in
Anadarko's SEC filings and reports and exhibits to those reports, and include
(but are not limited to) the costs and difficulties related to the integration
of acquired businesses, commodity pricing and demand, exploration and
operating risks, development risks, and the costs and other effects of
governmental regulation and legal and administrative proceedings. Anadarko
undertakes no obligation to publicly update or revise any forward-looking
statements.
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
$ and shares in millions 2000 1999 2000 1999
Revenues
Gas sales $503.7 $98.2 $758.4 $259.8
Oil and condensate sales 339.7 55.1 555.6 156.7
Natural gas liquids sales 84.5 26.4 164.6 58.6
Minerals and other 28.2 0.6 30.5 2.3
Total 956.1 180.3 1,509.1 477.4
Costs and Expenses
Operating expenses 119.8 35.2 208.6 103.7
Administrative and general 43.7 24.6 103.9 72.2
Depreciation, depletion
and amortization 215.6 51.7 334.8 162.2
Other taxes 52.2 9.7 76.8 27.4
Provision for doubtful accounts 23.3 --- 23.3 ---
Amortization of goodwill 11.3 --- 11.3 ---
Impairments related to
international properties --- --- --- 20.0
Total 465.9 121.2 758.7 385.5
Operating Income 490.2 59.1 750.4 91.9
Other (Income) Expense
Merger expense 63.7 --- 63.7 ---
Interest expense 27.9 17.9 69.5 55.0
Other (income) expense (29.0) 0.4 (29.3) (0.3)
Total 62.6 18.3 103.9 54.7
Income before Income Taxes 427.6 40.8 646.5 37.2
Income Taxes 179.2 19.3 278.6 25.4
Net Income $248.4 $21.5 $367.9 $11.8
Preferred Stock Dividends 2.7 2.7 8.2 8.1
Net Income Available to
Common Stockholders $245.7 $18.8 $359.7 $3.7
Per Common Share
Net income - basic $1.07 $0.15 $2.22 $0.03
Net income - diluted $1.03 $0.15 $2.14 $0.03
Dividends $0.05 $0.05 $0.15 $0.15
Average Number of
Shares Outstanding 230.4 127.4 162.2 124.4
Cash Flow from Operations before Changes in Assets and Liabilities
Net income $248.4 $21.5 $367.9 $11.8
Depreciation, depletion
and amortization 215.6 52.2 335.7 163.4
Amortization of goodwill 11.3 --- 11.3 ---
Non-cash merger expense 30.8 --- 30.8 ---
Interest expense - zero
coupon debentures 3.1 --- 6.9 ---
Deferred income taxes
excluding Algeria 130.4 14.1 191.9 8.8
Provision for doubtful accounts 23.3 --- 23.3 ---
Other non-cash items (24.5) --- (24.5) ---
Impairments related to
international properties --- --- --- 20.0
Total $638.4 $87.8 $943.3 $204.0
Capital Expenditures
Capital spending $441.7 $144.7 $837.5 $349.9
Capitalized interest 41.2 5.6 51.3 16.6
Capitalized overhead 42.9 20.3 87.7 65.1
Total $525.8 $170.6 $976.5 $431.6
Capitalization
Long-term debt $4,024.2 $1,405.3
Stockholders' equity 6,243.6 1,507.8
Total $10,267.8 $2,913.1
Capitalization Ratios
Long-term debt 39% 48%
Stockholders' equity 61% 52%
Total Assets $15,091.6 $3,833.8
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Volumes and Prices September 30 September 30
2000 1999 2000 1999
Natural Gas
United States
Volumes, billion cubic feet 115.9 41.9 209.0 127.9
Average daily volumes,
million cubic feet per day 1,260 456 763 468
Price per thousand cubic feet $4.01 $2.40 $3.49 $1.97
Canada
Volumes, billion cubic feet 21.4 --- 21.4 ---
Average daily volumes,
million cubic feet per day 232 --- 78 ---
Price per thousand cubic feet $2.74 $--- $2.74 $---
Other International
Volumes, billion cubic feet 0.5 --- 0.5 ---
Average daily volumes,
million cubic feet per day 6 --- 2 ---
Price per thousand cubic feet $1.10 $--- $1.10 $---
Total
Volumes, billion cubic feet 137.8 41.9 230.9 127.9
Average daily volumes,
million cubic feet per day 1,498 456 843 468
Price per thousand cubic feet $3.80 $2.40 $3.42 $1.97
Crude Oil and Condensate
United States
Volumes, thousand barrels 4,966 1,967 8,715 6,458
Average daily volumes,
thousand barrels per day 54 21 32 24
Price per barrel $30.65 $18.62 $28.42 $14.16
Algeria
Volumes, thousand barrels 2,321 818 6,544 4,108
Average daily volumes,
thousand barrels per day 25 9 24 15
Price per barrel $31.09 $20.99 $29.18 $14.97
Canada
Volumes, thousand barrels 2,015 --- 2,015 ---
Average daily volumes,
thousand barrels per day 22 --- 7 ---
Price per barrel $25.34 $--- $25.34 $---
Other International
Volumes, thousand barrels 3,509 --- 3,509 ---
Average daily volumes,
thousand barrels per day 38 --- 13 ---
Price per barrel $19.10 $--- $19.10 $---
Total
Volumes, thousand barrels 12,811 2,785 20,783 10,566
Average daily volumes,
thousand barrels per day 139 30 76 39
Price per barrel $26.73 $19.32 $26.79 $14.47
Natural Gas Liquids
United States
Volumes, thousand barrels 3,845 1,787 7,765 4,949
Average daily volumes,
thousand barrels per day 42 19 28 18
Price per barrel $21.13 $14.76 $20.77 $11.84
Canada
Volumes, thousand barrels 145 --- 145 ---
Average daily volumes,
thousand barrels per day 2 --- 1 ---
Price per barrel $22.55 $--- $22.55 $---
Total
Volumes, thousand barrels 3,990 1,787 7,910 4,949
Average daily volumes,
thousand barrels per day 43 19 29 18
Price per barrel $21.18 $14.76 $20.81 $11.84
Total Energy Equivalent Barrels
Volumes, million EEBs 39.8 11.6 67.2 36.8
SOURCE Anadarko Petroleum Corporation
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Anadarko Petroleum Corporation
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