Anadarko posts a profit after a big year-ago loss
Oct 29, 2012 (Menafn - Houston Chronicle - McClatchy-Tribune Information Services via COMTEX) --A year ago, Anadarko Petroleum Corp. posted a huge loss as it was weighed down by a multibillion-dollar Gulf oil spill settlement. This time around, it scored a third-quarter profit thanks to cost cuts and higher revenue from increased oil sales.
The independent oil and gas company, headquartered in The Woodlands, said Monday it expects the momentum to continue. It hiked its full-year sales-volumes guidance to 265 million to 267 million barrels of oil equivalent. And it doesn't expect a corresponding rise in capital spending.
"Anadarko is delivering another year of strong operational results and continued cost reductions," President and CEO Al Walker said.
The company is seeing strength in both oil and natural gas.
Natural gas volumes averaged roughly 2.5 billion cubic feet per day as Anadarko continued to ramp up activity during the quarter in its Wattenberg Horizontal program in northeast Colorado and in the Eagle Ford Shale in South Texas. The company said those fields combined for an increase of more than 800,000 barrels of liquids sales volumes over the second quarter of this year.
Strength abroad
Overseas, there were positives as well.
Anadarko completed its four-well initial appraisal program in the Golfinho/Atum complex off Mozambique. All four appraisal wells were successful, resulting in an increase in the field's estimated recoverable natural gas resources.
Walker said the find is one of the most significant natural gas discoveries in the last 20 years and could make Mozambique one of the world's largest exporters of liquefied natural gas.
For the three months ending Sept. 30, Anadarko swung to a 121 mil- lion profit, compared with a year-ago loss that was due in large part to settlement costs related to the 2010 disaster in the Gulf of Mexico, the company said. The profit was 24 cents a share, and compared with a loss of 3.05 billion, or 6.12 a share, in the year-ago period.
Revenue in the quarter rose 4 percent to 3.33 billion from 3.2 billion a year earlier.
For the first nine months of the year, Anadarko earned 2.19 billion, or 4.34 a share, compared with a loss of 2.29 billion, or 4.60 a share, a year earlier, the company said. Nine-month revenue fell slightly to 10 billion from 10.13 billion a year earlier.
Macondo effects
Anadarko was a minority owner of BP's Macondo well that blew out in the Gulf and led to the worst U.S. offshore oil spill ever. Eleven rig workers were killed in the related explosion of the Deepwater Horizon drilling rig.
Anadarko recorded 4.04 billion in Deepwater Horizon settlement and related costs in the third quarter of last year. That included 4 billion that Anadarko agreed to pay British oil giant BP as part of a settlement related to the Gulf disaster. Anadarko held a 25 percent share in Macondo.
As part of the settlement, BP agreed to indemnify Anadarko against certain claims. Civil and criminal fines were excluded, however, opening Anadarko up to potential further liability. BP and the Justice Department have been in talks about a settlement over fines and penalties.
Anadarko is eligible for a potential share in money that BP is able to recover from third parties or insurance, according to the two companies' agreement.
Anadarko is to discuss its results in a conference call Tuesday with investors and analysts.
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