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Anadarko beats quarterly profit estimates on record sales

BRADLEY OLSON and REBECCA PENTY

THE WOODLANDS, Texas (Bloomberg) -- Anadarko Petroleum, the explorer that discovered more than 6 Bbbl of oil and natural gas in the past decade, surpassed analysts’ profit estimates after reporting record sales volumes.

Anadarko reported a net loss of $2.67 bn, or $5.30 a share, from a profit of $460 mn, or 91 cents, a year earlier, stemming from a $5 bn legal settlement, Anadarko said in a statement. Excluding settlement costs and other one-time items, per-share earnings of $1.26 exceeded the $1.15 average of 29 analysts’ estimates compiled by Bloomberg.

“They beat what we were looking for, they beat what consensus was, and a lot of it was really driven by the strength in production,” Andrew Coleman, an analyst at Raymond James & Associates in Houston, said in a phone interview. With the Tronox bankruptcy effectively settled, more investors may be attracted to invest in the stock, he said.

Chairman and CEO Al Walker plans to spend as much as $8.8 bn this year on projects from the Gulf of Mexico to New Zealand after Anadarko settled an environmental lawsuit that had dragged on shares. The company agreed last month to pay the U.S. Justice Department $5.15 bn to clean up pollution left behind by its Kerr-McGee unit, which it acquired in 2006.

Revenue rose 50% to $5.84 bn from $3.89 bn a year ago, driven by higher production. The company reported record sales volumes of the equivalent of 819,000 bpd that topped the midpoint of its previous estimate by 10,000 barrels.

Anadarko boosted the midpoint of its 2014 sales-volume guidance by the equivalent of 3.5 MMbbl of oil. The company now forecasts selling an average of between 293 mn and 298 MMbbl this year.

The company continues to develop a discovery off the coast of Mozambique that may contain 70 Tcf of gas, enough to meet annual U.S. residential demand for 14 years. The company’s oil production has been rising in Texas and Colorado.

Brent crude futures, the global benchmark, declined 4.2% to average $107.92 a barrel in the January-to-March period, according to data compiled by Bloomberg. U.S. gas prices climbed 35% to average $4.712 per mn Btu during that period.

The earnings report was issued after the close of regular trading in New York. Anadarko rose 3.9% to $101.79 after the close of regular trading. The shares, which have 33 buy ratings and five holds from analysts, have risen 26% this year.

05/06/2014

 

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