Anadarko Announces 2014 Fourth-Quarter And Full-Year Results

HOUSTON, Feb. 2, 2015 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced 2014 fourth-quarter results, reporting a net loss attributable to common stockholders of $395 million, or $0.78 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by $582 million, or $1.15 per share (diluted), on an after-tax basis.⁽¹⁾ Cash flow from operating activities in the fourth quarter of 2014 was $1.952 billion, and discretionary cash flow totaled $2.412 billion.⁽²⁾

For the year ended Dec. 31, 2014, Anadarko reported a net loss attributable to common stockholders of $1.750 billion, or $3.47 per share (diluted), which includes a net loss of $4.045 billion associated with the settlement of the Tronox Adversary Proceeding, after tax. Full-year 2014 cash flow from operating activities was $8.466 billion. Discretionary cash flow for the year totaled $9.404 billion.⁽²⁾

2014 HIGHLIGHTS

• Delivered sales-volume growth of more than 11 percent, increasing year-over-year sales volumes by approximately 86,000 barrels of oil equivalent (BOE) per day on a divestiture-adjusted basis⁽³⁾
• Achieved a reserve-replacement ratio of more than 160 percent at competitive costs
• Accelerated more than $2.5 billion of value through asset monetizations
• Achieved significant progress on several large-scale projects, highlighted by the recent startup of the 80,000-barrels-of-oil-per-day (BOPD) Lucius spar in the deepwater Gulf of Mexico

"Anadarko's fourth-quarter operating performance was a capstone to another terrific year for our company," said Anadarko Chairman, President and CEO Al Walker. "In 2014, we demonstrated the quality of our portfolio by delivering results that exceeded the midpoint of our initial sales-volume guidance by approximately 38,000 BOE per day,⁽³⁾ while staying well within our initial range of capital investment guidance and generating free cash flow.⁽²⁾ This outperformance was primarily driven by results in the Wattenberg field, where we enhanced efficiencies in our drilling and completions and leveraged the competitive advantage of our expansive midstream infrastructure to significantly bolster our growth. We believe our efficient allocation of capital, active portfolio management and commitment

to financial discipline position Anadarko to deliver differentiating performance in the challenging current environment and as commodity prices recover."

SALES VOLUMES AND PROVED RESERVES

Anadarko's full-year sales volumes of natural gas, crude oil and natural gas liquids (NGLs) totaled a record 306 million BOE, or an average of 838,000 BOE per day, on a divestiture-adjusted basis.⁽³⁾ Fourth-quarter 2014 sales volumes of natural gas, crude oil and NGLs totaled 79 million BOE, or an average of 854,000 BOE per day.

Anadarko organically added 503 million BOE of proved reserves in 2014 before the effects of price revisions and incurred oil and natural gas exploration and development costs of approximately $8.8 billion.⁽²⁾ The company estimates its proved reserves at year-end 2014 totaled approximately 2.86 billion BOE, with 69 percent of its reserves categorized as proved developed. At year-end 2014, Anadarko's proved reserves were comprised of 49 percent liquids and 51 percent natural gas.

U.S. ONSHORE HIGHLIGHTS

In 2014, Anadarko's U.S. onshore operating areas achieved a 16-percent year-over-year increase in total sales volumes, including an increase of 78,000 barrels per day in liquids volumes, and an approximate 50-percent increase, or 49,000 BOPD, in oil volumes on a divestiture-adjusted basis.⁽³⁾ This growth was driven by record production in several major growth plays, including the Wattenberg field, Eagleford Shale and Wolfcamp Shale.

Anadarko's Wattenberg field in Colorado continued to demonstrate excellent performance as the company achieved year-over-year growth of approximately 55 percent, increasing sales volumes by more than 60,000 BOE per day over its 2013 average of 109,000 BOE per day. Significant infrastructure was placed in service in the field during the year, including the Lancaster cryogenic plant, Front Range NGL pipeline and more than 300 million cubic feet per day of additional field compression. These expansions, coupled with continued strong reservoir performance and enhanced drilling and completions efficiencies, underpinned Wattenberg's production growth.

In the Delaware Basin in West Texas, the company exited the year with ten operated rigs and continued its successful evaluation of the extensive Wolfcamp Shale oil opportunity. Anadarko continues to expand key infrastructure to facilitate future growth from the basin, including the integration of the Nuevo Midstream assets acquired by Anadarko's midstream limited partnership, Western Gas Partners, LP (WES).

INTERNATIONAL AND DEEPWATER HIGHLIGHTS

In 2014, Anadarko advanced multiple significant mega projects and achieved a net production record at the El Merk project in Algeria. The company commissioned the 80,000-BOPD Lucius facility in the deepwater Gulf of Mexico and achieved first oil on Jan. 16, 2015 - just over three years from project sanction. Also in the Gulf of Mexico, the 80,000-BOPD Heidelberg project remains on track for first oil in 2016, as construction on the topsides is more than 70-percent complete, and two deepwater drilling rigs are actively drilling development wells in the field. In addition, Anadarko's non-operated 80,000-barrels-per-day TEN development offshore Ghana also remains on schedule with first production expected in 2016, and new gas-handling infrastructure was completed in the adjacent Jubilee field during the fourth quarter, which is expected to enable increased oil production beginning in 2015.

During the fourth quarter, the Government of Mozambique gazetted the Decree Law, which is an important step in providing the appropriate framework for a stable business environment for investors, customers, financiers and construction contractors as Anadarko advances its large-scale LNG project. Anadarko and its partners in Mozambique's Offshore Area 1 have continued to advance long-term LNG sales agreements with the recent addition of new non-binding Heads of Agreement (HOAs) with customers in Asian markets. With these new agreements, the partners have HOAs in place covering a total of more than 8 million tonnes per annum.

Anadarko also maintained an active exploration and appraisal program during the year, laying the foundation for potential future mega projects. Appraisal activity offshore Côte d'Ivoire at the Paon discovery and in the Gulf of Mexico at the Shenandoah discovery continued to validate the company's geologic models around these apparent commercial discoveries.

OPERATIONS REPORT

For additional details on Anadarko's fourth-quarter 2014 operations and exploration program, please refer to the comprehensive Operations Report available at www.anadarko.com.

FINANCIAL HIGHLIGHTS

Anadarko ended 2014 with approximately $7.4 billion of cash on hand and, subsequent to year-end, the company remitted final payment to fully resolve the Tronox Adversary Proceeding, converted its secured debt revolver to an unsecured facility and announced a commercial paper program.

During the year, the company generated approximately $150 million of free cash flow, including $696 million of capital investments incurred by WES.⁽²⁾ Anadarko also closed transactions to monetize more than $2.5 billion of assets in 2014, including the $1.1 billion divestment of its China subsidiary,

the $500 million sale of its non-operated interest in the Vito Gulf of Mexico development, the $442 million Eaglebine carried-interest agreement, and most recently the $120 million divestiture of non-core assets in the Midland Basin. This total does not include the previously announced $2.64 billion Mozambique sell-down and $581 million Pinedale/Jonah divestiture. At year-end 2014, Anadarko's net debt to adjusted capitalization ratio was approximately 26 percent.⁽²⁾

CONFERENCE CALL TOMORROW AT 8 A.M. CST, 9 A.M. EST

Anadarko will host a conference call on Tuesday, Feb. 3, 2015, at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2014 results. The dial-in number is 855.812.0464 in the U.S., or 970.300.2271 internationally. The confirmation number is 54428059. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will be available on the website for approximately 30 days following the conference call.

FINANCIAL DATA

Nine pages of summary financial data follow, including costs incurred, proved reserves and current hedge positions.

⁽¹⁾ See the accompanying table for details of certain items affecting comparability.

⁽²⁾ See the accompanying table for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measures provide useful information for investors.

⁽³⁾ See the accompanying table for a reconciliation of "divestiture-adjusted" or "same-store" sales volumes, which are intended to present performance of Anadarko's continuing asset base, giving effect to recent divestitures.

Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2014, the company had approximately 2.86 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, please visit www.anadarko.com.

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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 assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including Anadarko's ability to realize its expectations regarding performance in this challenging economic environment, finalize year-end reserves, timely complete and commercially operate the projects and drilling prospects identified in this news release, successfully plan, secure necessary government approvals, finance, build and operate the necessary infrastructure and LNG park and achieve production and budget expectations on its mega projects. See "Risk Factors" in the company's 2013 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

ANADARKO CONTACTS

MEDIA:

John Christiansen, [email protected], 832.636.8736
Stephanie Moreland, [email protected], 832.636.2912
Christina Ramirez, [email protected], 832.636.8687

INVESTORS:

John Colglazier, [email protected], 832.636.2306
Robin Fielder, [email protected], 832.636.1462
Jeremy Smith, [email protected], 832.636.1544

 

 

 

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