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Anadarko boosts 2014 growth plans in domestic output surge

BRADLEY OLSON

THE WOODLANDS, Texas (Bloomberg) -- Anadarko Petroleum Corp., the global explorer under investor pressure to grow after paying almost $10 billion in legal claims since 2011, beat second quarter profit estimates and raised growth forecasts as output rose to a record.

Net income was $227 million, or 45 cents a share, down from $929 million, or $1.83, a year earlier, The Woodlands, Texas-based company said in a statement. Excluding one-time items, per-share earnings of $1.32 exceeded the $1.30 average of 31 analysts’ estimates compiled by Bloomberg.

Spurred by success in U.S. drilling and in Algeria, Anadarko sold the equivalent of 848,000 bpd of oil and natural gas, a 6% gain from the April-to-June period a year ago. The company boosted its production estimate by more than 13,000 bpd. Shares rose 1.5% to $109.23.

Chairman and CEO Al Walker is spending as much as $8.8 billion this year developing wells from Colorado to Mozambique. Drilling prospects are soaring in the Rocky Mountains as new pipelines and processing facilities allowed Anadarko to increase oil production there by more than 30% in the first quarter.

“They’re one of the leaders of that area,” said James Sullivan, an analyst at Alembic Global Advisors, who rates the stock the equivalent of buy and doesn’t own shares. “They’ve got the biggest footprint and the company is ahead of the game in terms of land and takeaway capacity.”

Anadarko owns more than 8 million acres of mineral rights in the region and royalty income reached $385 million in the first half of this year, a pace that would exceed 2013 proceeds by 14%. The company is likely to seek sales of rights to future royalties that could be worth $6.14 billion, cash that would be used to buy back as many as 10% of shares, Arun Jayaram, an analyst at Credit Suisse AG, said on July 28 in a note to investors.

In 2011, Anadarko paid BP Plc $4 billion to settle all claims over the 2010 blowout at the Gulf of Mexico Macondo well, which caused the largest offshore oil spill in U.S. history. The company owned a 25% stake in the well. Anadarko agreed in April to pay the U.S. Justice Department $5.15 billion to settle a pollution litigation case.

07/29/2014

 

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