Independent oil and gas producer Anadarko Petroleum Corporation (APC) unveiled its 2012 outlook and capital program. The company expects to surpass its impressive 2011 sales performance in 2012. The company targets sales volumes of about 256 – 260 million barrels of oil equivalent (MMBOE) in 2012, compared with net sales volumes of 248 MMBOE in 2011. In the first quarter of 2012, the company expects sales volumes to be in the range of 61 – 63 MMBOE.
Anadarko also outlined its 2012 capital expenditure plans, projecting fiscal 2012 capital spending of roughly $6.6 – $6.9 billion, higher than $6.55 billion spent in 2011. The rise in the capex budget would support the company’s global expansion plans. Anadarko’s total capital spending in the first quarter of 2012 is expected to be in the range of $1.6 – $1.76 billion.
Region-wise, Anadarko’s 2012 capital budget has been divided into four parts, with about 55% allocated for the U.S. Among onshore operations, 25% is earmarked for International projects, 10% in the Gulf of Mexico and 10% for Midstream and other projects.
The majority of the planned capital expenditure is directed towards developing the company’s resource-rich US shale acreage. Investments in Eagleford Shale in South Texas and Marcellus Shale in north-central Pennsylvania are likely to boost the total production of the company.
We also believe the investments in the Wattenberg field of northeastern Colorado and in the liquid-rich East Texas assets will aid in onshore production growth.
The company has left the nightmares of the Deepwater Horizon accident behind and is making significant headway in its Gulf of Mexico projects. Anadarko has started first production in the Caesar/Tonga mega project and is gradually progressing with the development work in the Lucius project. Anadarko has plans to begin work on the Heidelberg discovery in the latter part of the year.
Capital expenditure is also directed at developing the company’s international projects. The investments are predominantly centered in Africa. Development in offshore Mozambique, El Merk in Algeria, the Jubilee unit in West Africa and explorations offshore Ghana are likely to contribute a chunk of the 81-84 thousand barrels per day (MBbl/d) production forecast for the first quarter of 2012.
We believe these capital-intensive endeavors would help the company to grow on a global scale. Anadarko continues with its drilling program unabated in 2012 and has decided to spud 25 high impact wells worldwide. Such an aggressive drilling program, with 20% of the capital budget directed towards exploration, will enable the company to reach its target and strengthen its worldwide presence.
Based in The Woodlands, Texas, Anadarko Petroleum is primarily engaged in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and NGLs.The company presently retains a short-term Zacks #2 Rank, which translates into a short-term Buy rating. The company competes directly with BP plc. (BP) and ConocoPhillips (COP).
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