Anadarko Petroleum Corporation (APC) posted robust numbers for the fourth quarter of 2009, driven by higher sales volumes and lower capital spending on near term projects. Net income from continuing operations was 4 cents per share, in line with the Zacks Consensus Estimate of 4 cents and better than a net loss of 12 cents reported in the same period last year. For full year 2009, the company reported a net loss of 28 cents, better than the Zacks Consensus Estimate of a net loss of $1.12 and below the last year’s net income of $6.91.
Sales volumes in the reported quarter went up 2% to 53 million barrels of oil equivalent (BOE) or 583 thousand BOE per day (MBOE/d). For the year, Anadarko’s sales volumes improved 7% to 220 million BOE or 604 MBOE/d, primarily due to the 50% success rate achieved in deepwater drilling and advancing of its three sanctioned mega projects on time and within budget.
Anadarko ended the year with estimated proved reserves of 2.3 billion BOE, adding 314 million BOE of proved reserves in 2009 at costs of approximately $4.66 billion. This represents replacing 140% of production. At year-end, the company had 70% of its reserves in the proved developed category, with the remaining 30% categorized as proved, undeveloped. Anadarko’s product mix of proved reserves was made up of 56% natural gas and 44% liquids.
In the quarter, daily sales volumes of crude oil & condensate, natural gas and natural gas liquids (NGL) averaged 190,000 barrels (up 15%), 2.1 billion cubic feet (down 6%) and 47,000 barrels (up 24%), respectively. In 2009, average daily sales volumes were 187,000 barrels (up 3%) of crude oil & condensate, 2.2 billion cubic feet (up 8%) of natural gas and 47,000 barrels (up 21%) of NGL.
Including the impact of hedges, realized prices in the quarter for crude oil & condensate, natural gas and NGL averaged $71.55 per barrel (up 38%), $4.06 per thousand cubic feet (down 25%) and $39.91 per barrel (up 41%), respectively. Crude oil & condensate, natural gas and NGL prices in 2009 declined 38%, 53% and 44%, respectively, to $59.51 per barrel, $3.61 per thousand cubic feet and $31.42 per barrel, primarily due to the impact of the recession.
Revenues for the quarter and the year dipped 17% and 41%, respectively, to $2.4 billion and $9.0 billion due to lower energy prices. During the quarter, revenues from natural gas were down 29%, while crude oil & condensate and NGL revenues improved 58% and 73%, respectively. The increase in liquids revenue was driven by their higher realized prices during the quarter. In 2009, revenues from natural gas, crude oil & condensate and NGL declined 49%, 37% and 33%, respectively.
The company continued with its efforts to control costs and improve operational efficiency to stay competitive under thepresent challenging commodity price environment. During the year, the company reduced its lease operating expense (LOE) per BOE by more than 20% year over year.
Anadarko is also focused on strengthening its balance sheet and enhancing its financial flexibility and liquidity position. The company ended the year with $3.5 billion of cash in hand and a total debt of $12.7 billion. It had a debt-to-capitalization ratio of 39% at year-end 2009. Capital expenditures in the quarter were $1.7 billion and at year-end were $4.6 billion.
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