Anadarko Petroleum (APC) posted better-than-expected numbers for the second quarter of 2009 on higher sales volumes, lower lease operating expenses (LOE) and improved drilling efficiency. Net loss from continuing operations were 47 cents per share, lower than the Zacks Consensus Estimate of 66 cents. It reported a net income of 3 cents per share in the same period last year.
Sales volumes went up 12% to 56 million barrels of oil equivalent (BOE) or 617 thousand BOE per day, above the quarterly guidance, primarily due to higher volumes in the Rockies and Independence Hub and higher natural gas liquids (NGL) recoveries at the Chipeta Cryo plant in Utah. Daily sales volumes of crude oil & condensate, natural gas and NGL averaged 182 thousand barrels (down 7%), 2.3 billion cubic feet (up 25%) and 46 thousand barrels (up 12%), respectively.
Revenues dipped 37% to $1.7 billion due to lower energy prices. Revenues from natural gas and NGL were down 56% and 55% respectively, whereas crude oil & condensate sales were up 120%. Realized price — including the impact of hedges — for crude oil & condensate, natural gas and NGL averaged $45.8 per barrel (up 137%), $3.1 per thousand cubic feet (down 65%) and $27.6 per barrel (down 60%).
Anadarko continued with its efforts to control cost and improve operational efficiency to stay competitive under the present challenging commodity price environment. LOE improved 12% sequentially and 18% year-over-year to $4.26 per BOE.
Anadarko also focused on strengthening the balance sheet and enhancing the financial flexibility and liquidity position. It raised $1.3 billion from equity offering in May to finance capex plans and issued $900 million of senior notes in June to refinance near-term debts. Anadarko ended the quarter with $3.5 billion of cash in hand and committed revolving credit facility of $1.3 billion. It has no scheduled debt maturities until 2011.
Anadarko has raised the sales volume guidance for 2009 by 2–3 million BOE to 210–215 million BOE and kept the capex budget intact at $3.9–$4.4 billion. We reiterate our Neutral recommendation for the company.
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