Anadarko swings to third quarter profit on higher sales absent settlement charges
BY ALISON SIDER AND NATHALIE TADENA
HOUSTON -- Without the burden of a hefty Deepwater Horizon settlement charge, Anadarko swung to a third quarter profit on higher volumes of oil sales and increased activity in U.S. shale formations.
Anadarko reported a profit of $121 million compared with a year earlier loss of $3.05 billion.Last year's quarter included $4 billion Anadarko agreed to pay to BP for security against certain claims relating to the 2010 Deepwater Horizon oil spill. Anadarko owned a 25% stake in the blown out well that was operated by BP.
Taking out the impacts from the BP settlement a year earlier, derivatives impacts, asset write downs and other items, adjusted earnings rose to 84 cents from 66 cents in this year's third quarter. Analysts polled by Thomson Reuters most recently projected earnings of 76 cents a share on revenue of $3.4 billion.
In the latest period, Anadarko's sales volume of 68 MMboe was about the same as last quarter, but was 12% higher than a year ago. Anadarko raised its projected sales volume range for the year to 265 to 267 MMboe, from 261 to 265 MMboe projected in July.
Chief executive Al Walker said in a news release that capital spending won't increase along with projected sales as the company has worked to reduce costs.
Raymond James analyst Andrew Coleman said the increased production was a "modest positive."
"Production for the quarter was better than we were looking for and costs were a little lower. As far as what we're going to take away folks are going to be looking at how the production increase will set up the company for the rest of the year," he said.
Anadarko's operations in shale fields such as the Eagle Ford in south Texas and the Wattenberg in northeast Colorado helped propel its increased production, with 800,000 more boe produced in those two areas during the third quarter than during the second.
But sales were down 12% in the Gulf of Mexico from the previous year due to weather related shut ins and naturally declining production there, the company said.
The company also said its natural gas discovery off the coast of Mozambique has exceeded initial expectations.
Dow Jones Newswires