Anadarko Petroleum Corporation (NYSE: APC) has announced its financial and operating results for the second-quarter of 2016, including a net loss attributable to common stockholders of $692 million, or $1.36 per share (diluted).
The net loss includes certain items typically excluded by the investment community in published estimates, which in the aggregate decreased net income by $388 million or $0.76 per share (diluted) on an after-tax basis. Cash flow from operating activities in the second quarter of 2016 was $1.229 billion. Discretionary cash flow from operations totaled $669 million.
• Achieved record production levels at three operated Gulf of Mexico facilities and in the U.S. onshore Delaware and DJ basins
• Encountered more than 1,040 net feet of oil pay at the Shenandoah-5 appraisal well and increased working interest in this operated deepwater discovery
• Closed $2.5 billion of monetisations year to date
• Retired $3 billion of near-term maturities with proceeds from debt issued during the first-quarter
“Our portfolio continues to perform exceptionally well, and we’ve continued to significantly reduce our cost structure throughout the year,” said Al Walker, Anadarko Chairman, President and CEO. “As a result of the record sales volumes from our Lucius and Caesar/Tonga fields in the Gulf of Mexico, as well as the improving well performance in the Delaware and DJ basins, we are increasing the midpoint of our full-year divestiture-adjusted sales-volume guidance by 2 million BOE (barrels of oil equivalent). Additionally, we’ve been very successful monetizing assets through the first six months of this year and have increased the high end of our target range to $3.5 billion in total proceeds expected by year end. As stated previously, we intend to use sales proceeds to retire debt, including the remaining $750 million of 2017 maturities. In addition, should the commodity-price outlook continue to improve, we will evaluate redeploying some of the additional cash generated via operations and asset sales toward our highest-quality U.S. onshore opportunities.”
Anadarko’s second-quarter sales volumes of natural gas, oil and natural gas liquids (NGLs) totaled 72 million BOE, or an average of 792,000 BOE per day.
In the Delaware Basin of West Texas, Anadarko averaged record net sales volumes of 41,000 BOE per day, and exited the quarter at approximately 45,000 BOE per day. The company has continued its delineation programme, running six rigs to further its understanding of both the vertical and areal potential across its 600,000-gross-acre position in the heart of the play. In the DJ Basin of northeast Colorado, Anadarko continued to optimise the performance of its base production during the second quarter, achieving record net sales volumes of approximately 243,000 BOE per day.
In the Gulf of Mexico, the company achieved several production records. The Lucius platform achieved a 24-hour gross production record and averaged sales volumes above the facility’s 80,000 barrels of oil per day (BOPD) nameplate capacity. In addition, the company’s Constitution spar recently achieved a production record of 65,000 BOPD, and its K2 complex also achieved an eight-year-high production rate of 28,000 BOPD. During the quarter, Anadarko continued to advance its understanding of the Shenandoah discovery, as it encountered more than 1,040 net feet of oil pay in the Shenandoah-5 appraisal well, expanding the eastern extent of the field. Additionally, the company increased its working interest in Shenandoah to 33 percent and added several new exploration opportunities to the portfolio by participating in a preferential-right process.
Internationally, the TEN field offshore Ghana is 97-percent complete with installation, hook-up and commissioning on schedule and first oil expected in the third quarter of 2016. At the adjacent Jubilee field, following maintenance on the floating production, storage and offloading vessel (FPSO) and implementation of new production and offtake procedures, production has ramped back up and is expected to average approximately 85,000 BOPD during the second half of the year. The partnership determined a long-term solution to convert the FPSO to a permanently moored facility, with the work program expected to be completed in the first half of 2017. Until the work program is complete, shuttle tankers will continue to be utilized to deliver offtake. Offshore Côte d’Ivoire, Anadarko continued its successful appraisal programme with the drilling of the Paon-3AR horizontal sidetrack, which will be followed by a drillstem and interference testing program in the third-quarter. In advancing the Mozambique LNG project, Anadarko achieved a significant milestone by submitting the Resettlement Plan for government review.
Anadarko ended the second-quarter with approximately $1.4 billion of cash on hand. Year to date, Anadarko has generated approximately $2.5 billion in monetisations, including proceeds received during the second-quarter from the secondary offering of Western Gas Equity Partners (NYSE: WGP) common units and divestitures of the company’s Wamsutter and non-core Permian assets.