HOUSTON, Oct. 29 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today announced financial and operating results for the third
quarter of 1998.
1998 Third Quarter
For 1998's third quarter, Anadarko reported a net loss available to common
stockholders of $2.3 million or two cents per share. Revenues for the third
quarter of 1998 totaled $140.2 million. For the same period in 1997, Anadarko
reported net income of $17.1 million or 14 cents per share on revenues of
$158.7 million. The decline in Anadarko's 1998 third quarter results from
year-ago levels was attributed primarily to substantially lower commodity
prices for crude oil, natural gas and natural gas liquids (NGLs), partially
offset by increased production volumes. Costs and expenses were higher in the
third quarter. Operating expense increased due to acquisition of domestic
producing properties and first production from Algeria. Higher administrative
and general expense, increased interest expense, and preferred stock dividends
also affected the 1998 third quarter performance.
"Like others in the oil and gas industry, Anadarko's financial performance
during the third quarter of 1998 continued to reflect weak oil and gas
prices," said Chairman, President and Chief Executive Officer Robert J.
Allison, Jr. "Despite lower prices, we are on track to set Company records
for production volumes and reserve replacement for the full-year 1998. We
expect to report an 8.3% increase in production volumes in energy equivalent
barrels for 1998 compared to 1997 levels, reflecting higher production from
the Matagorda Island 622/623 Complex in the Gulf of Mexico and the Bossier
Play in East Texas as well as initial production from our operations in
Algeria. 1998 also is shaping up to be a great year for adding reserves to
our worldwide portfolio. Overall, we expect a record reserve replacement for
the full-year 1998."
During the third quarter of 1998, Anadarko's oil volumes grew 23% to
2.9 million barrels (MMBbls) or 32 thousand barrels (MBbls) per day, from
2.4 MMBbls or 26 MBbls per day in 1997's corresponding period. The increase
in oil volumes reflected higher production in 1998 from start up of
production from the Company's Hassi Berkine South Field in Algeria, which came
onstream on May 4, 1998, and the acquisition of properties in the Golden Trend
area of central Oklahoma earlier this year. (For the third quarter of 1998,
oil production from Algeria was 466 MBbls net to Anadarko.) The higher oil
production volumes were offset by a 33% decline in 1998's third quarter oil
prices. Anadarko's average oil price for the third quarter of 1998 was $11.46
per barrel, versus $17.06 a year ago.
In 1998's third quarter, Anadarko's natural gas production was
45.7 billion cubic feet (Bcf) of gas or 497 million cubic feet (MMcf) per day,
essentially level with 45.4 Bcf or 494 MMcf of gas per day during 1997's same
period. 1998 third quarter gas volumes remained strong despite temporary
storm-related production shut-ins in the Gulf of Mexico in August and
September. Anadarko's wellhead price for natural gas averaged $1.82 per
thousand cubic feet (Mcf) for the third quarter of 1998, off 10% from $2.02 a
year ago.
Anadarko's NGLs sales volumes for the third quarter of 1998 rose 25% to
1.8 MMBbls or 19 MBbls per day, up from 1.4 MMBbls or 16 MBbls per day during
1997's corresponding period. Increased NGLs volumes were offset by lower NGLs
prices, which fell 36% from $14.65 per barrel in the third quarter of 1997 to
$9.44 in 1998's same period.
1998 First Nine Months
During the first nine months of 1998, Anadarko produced 34.9 million
energy equivalent barrels, up 8% from 32.3 million barrels for 1997's same
period. The Company's production target for the full-year 1998 was a 20%
increase over 1997. However, pipeline completion delays, lower-than-expected
production from non-operated properties, and temporary storm-related shut-ins
in the Gulf of Mexico have affected Anadarko's production volumes to date
during 1998. For the full-year 1998, Anadarko expects to produce 48 million
energy equivalent barrels, an 8.3% increase from 44 million barrels in 1997.
For the first nine months of 1998, Anadarko's net income available to
common stockholders was $7.5 million (six cents per share). Revenues for the
first nine months of 1998 totaled $424.7 million. For the corresponding
period in 1997, Anadarko reported $65.3 million in net income (54 cents per
share) on revenues of $469.0 million. The Company attributes the decline in
net income and revenues to substantially lower commodity prices, which were
partially offset by higher production volumes.
Higher costs and expenses also affected Anadarko's net income for the
first nine months of 1998. Operating expense increased $15 million due to
higher total production volumes, acquisition of domestic producing properties
and initial production from Algeria. Administrative and general expenses are
up due to higher costs associated with the Company's growing workforce.
Expenses for depreciation, depletion and amortization (DD&A) increased
$7 million due to higher production volumes, partially offset by a lower DD&A
rate. Higher interest expense and preferred stock dividends also affected
earnings for the first nine months of 1998.
Anadarko's worldwide oil production for the first nine months of 1998 rose
by 18% compared to the same period in 1997. The 1998 oil volumes to date
totaled 7.9 MMBbls or 29 MBbls per day, versus 6.6 MMBbls or 24 MBbls per day
for the first nine months of 1997. First production from Algeria and the
Golden Trend property acquisition contributed to the significant increase in
oil volumes for the first nine months of 1998. Anadarko's average oil price
declined 35% for 1998's first nine months compared to the same period in 1997.
Oil prices averaged $11.93 per barrel in 1998's first nine months, compared to
$18.26 a year ago.
During the first nine months of 1998, Anadarko's natural gas production
was level with the same period in 1997. The Company produced 131.9 Bcf of gas
or 483 MMcf/d in the first nine months of 1998. Anadarko's wellhead natural
gas price averaged $1.94 per Mcf, an 11% decline from $2.17 per Mcf in 1997's
same period.
NGLs volumes for the first nine months of 1998 increased 37% to 5.1 MMBbls
or 19 MBbls per day, up from 3.7 MMBbls or 14 MBbls per day in 1997's same
period. The substantial rise in volumes was offset by a 27% decline in the
Company's average NGLs price for the first nine months of 1998. Anadarko's
NGLs price averaged $10.65 per barrel for the first nine months of 1998,
versus $14.65 per barrel a year ago.
Eritrea
Anadarko also reported today that its first exploration well offshore
Eritrea was unsuccessful. The Bulissar No. 1 well was drilled to a total
depth of 4,200 meters on the Zula Block in the Red Sea. Anadarko, as operator
of the concession, said that while the initial well was dry, the partners are
encouraged by results of its drilling program. The well encountered source
rocks at multiple levels, good seals, and reservoir quality sands. In
addition, traces of oil were recovered from sidewall cores. These results add
to the understanding of this unexplored portion of the Red Sea. The Bulissar
No. 1 well represents only the fourth well drilled since World War II on the 9
million-acre concession area held by Anadarko and its partners.
Anadarko and its partners plan to drill two additional wells offshore
Eritrea. The venture's second well, the Du Rig-Rig No. 1, will be located
about 90 miles northwest of the Bulissar well; drilling operations are
expected to begin in November 1998. Anadarko holds a 50% interest in the
Eritrea concession. The remaining interests are held by AGIP with 30% and
Burlington Resources with 20%.
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.
Comparative financial highlights follow (amounts in millions, except per
share data):
Quarter Ended September 30
1998 1997
Net income (loss) available
to common stockholders $(2.3) $17.1
Earnings (loss) per
share - diluted $(0.02) $0.14
Revenues $140.2 $158.7
Average common shares
outstanding 120.1 119.5
Nine Months Ended September 30
1998 1997
Net income available to common
stockholders $7.5 $65.3
Earnings per share - diluted $0.06 $0.54
Revenues $424.7 $469.0
Average common shares
outstanding 120.0 119.3
Additional financial and operating information is as follows.
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
$ and shares in millions 1998 1997 1998 1997
Revenues
Gas sales $ 86.3 $ 94.8 $ 267.4 $ 285.0
Oil and condensate sales 35.0 42.0 98.0 124.5
Natural gas liquids and other 18.9 21.9 59.3 59.5
Total 140.2 158.7 424.7 469.0
Costs and Expenses
Operating expenses 41.8 39.3 120.8 105.6
Administrative and general 22.0 19.5 64.9 53.7
Depreciation, depletion and
amortization 51.6 51.1 151.3 144.3
Other taxes 9.1 10.7 28.4 34.3
Total 124.5 120.6 365.4 337.9
Operating Income 15.7 38.1 59.3 131.1
Interest Expense 15.0 11.4 41.1 28.7
Income before Income Taxes 0.7 26.7 18.2 102.4
Income Taxes 0.3 9.6 6.4 37.1
Net Income $ 0.4 $ 17.1 $ 11.8 $ 65.3
Preferred Stock Dividends 2.7 0.0 4.3 0.0
Net Income (Loss) Available to
Common Stockholders $ (2.3) $ 17.1 $ 7.5 $ 65.3
Per Common Share
Net income (loss) - basic $ (0.02) $ 0.14 $ 0.06 $ 0.55
Net income (loss) - diluted $ (0.02) $ 0.14 $ 0.06 $ 0.54
Dividends $ 0.0500 $ 0.0375 $ 0.1375 $ 0.1125
Average Number of Shares
Outstanding 120.1 119.5 120.0 119.3
Cash Flow from Operations before
Changes in Assets and Liabilities
Net income $ 0.4 $ 17.1 $ 11.8 $ 65.3
Depreciation, depletion and
amortization 51.6 51.1 151.3 144.3
Amortization of restricted stock 0.3 0.4 0.8 1.4
Deferred U.S. income taxes (1.1) 10.6 4.9 29.1
Total $ 51.2 $ 79.2 $ 168.8 $ 240.1
Capital Expenditures
Capital spending $ 175.2 $ 160.5 $ 587.1 $ 427.2
Capitalized interest 6.1 5.7 18.4 15.7
Capitalized overhead 23.4 20.9 66.9 53.5
Total $ 204.7 $ 187.1 $ 672.4 $ 496.4
Capitalization
Long-term debt $1,225.0 $ 890.6
Stockholders' equity 1,317.8 1,076.5
Total $2,542.8 $1,967.1
Capitalization Ratios
Long-term debt 48% 45%
Stockholders' equity 52% 55%
Total Assets $3,497.0 $2,868.7
Anadarko Petroleum Corporation
Quarter Ended Year to Date
September 30 September 30
Volumes and Prices
1998 1997 1998 1997
Natural Gas
Volumes, billion cubic feet 45.7 45.4 131.9 131.5
Average daily volumes,
million cubic feet per day 497 494 483 482
Price per thousand cubic feet $ 1.82 $ 2.02 $ 1.94 $ 2.17
Crude Oil and Condensate
Volumes, thousand barrels 2,940 2,392 7,871 6,643
Average daily volumes,
thousand barrels per day 32 26 29 24
Price per barrel $ 11.46 $ 17.06 $ 11.93 $ 18.26
Natural Gas Liquids
Volumes, thousand barrels 1,788 1,430 5,062 3,693
Average daily volumes,
thousand barrels per day 19 16 19 14
Price per barrel $ 9.44 $ 14.65 $ 10.65 $ 14.65
Total Energy Equivalent Barrels
Volumes, million EEBs 12.4 11.4 34.9 32.3
For more information about Anadarko's worldwide operations, please visit
the company's web site at http://www.anadarko.com on the Internet.
To add or delete a name from Anadarko's fax list for press releases,
please contact Anadarko at 281-874-3284 (fax) or 281-874-1606.
SOURCE Anadarko Petroleum Corporation
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CONTACT:
Analysts and Investors: A. Paul Taylor, Jr.,
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