WESTERN GAS PARTNERS, LP HOUSTON, March 7, 2017 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced its 2017 initial capital expectations and guidance. The company will also host an investor conference call tomorrow to discuss recent updates and expectations, including:
HIGHLIGHTS
-- Announced 2017 initial capital program of $4.5 to $4.7 billion((1))
-- Increased Wolfcamp A (Delaware Basin) net resources by 50 percent to
more than 3 billion BOE
-- Increased DJ Basin development area net resources by 33 percent to more
than 2 billion BOE
-- Improved margins per barrel significantly as a result of higher
oil-production mix
-- Completed Eagleford divestiture increasing cash on hand as of March 3 to
more than $5 billion
-- Expected 25-percent increase in oil sales volumes in 2017 relative to
the prior year((2))
"Our 2017 initial capital program is designed to leverage our streamlined portfolio and sharpened focus on higher-margin oil production, which is expected to generate stronger returns and substantial cash flow to fund material growth over the next five years," said Al Walker, Anadarko Chairman, President and CEO. "With a growing lower-risk resource base of more than 6.5 billion BOE (barrels of oil equivalent) in our premier U.S. focus areas of the Delaware and DJ basins, and the deepwater Gulf of Mexico, I believe Anadarko is poised to deliver exceptional value in 2017 and well beyond.
"In 2017, we plan to allocate approximately 80 percent of our total capital program toward our U.S. onshore upstream and midstream activities, and our expanded position in the deepwater Gulf of Mexico," added Walker. "These investments provide the foundation for our increased five-year oil growth expectations of more than 15 percent on a compounded annual basis at current prices, and we are prepared to be flexible throughout the year if we see the opportunity in the Delaware and DJ basins to accelerate activity to capture additional value. Furthermore, sustained oil production from our deepwater Gulf of Mexico, Algeria and Ghana assets is expected to generate significant free cash flow to support growth and fund future value creation through exploration success and our LNG business."
2017 Initial Capital Expectations ($4.5 - $4.7 Billion)(1)
By Area Billions By Type
U.S. Onshore $1.9 U.S. Focus Areas* 80%
Deepwater & Int'l.
Operations 1.1 Int'l. Cash Generation** 2%
Deepwater & Int'l. 0.8 Future Upside (Exploration &
Exploration/LNG LNG) 15%
Midstream 0.6 Corporate 3%
Note: All amounts are approximates.
* U.S. onshore upstream and
midstream, and deepwater Gulf of
Mexico
** Algeria and Ghana operations
Initial Sales-Volume Expectations(2)
2017 Initial Expectations 2016
------------------------- ----
Total (MMBOE) 235 - 239 210
Oil (MBOPD) 357 - 362 287
U.S. ONSHORE
During 2016, Anadarko high-graded its U.S. onshore portfolio by divesting a number of natural-gas-weighted assets and concentrating its top-tier positions in the Delaware and DJ basins, which resulted in an expected 25-percent increase in liquids composition from the U.S. onshore relative to 2015 on a same-store-sales basis.((2))
In the Delaware Basin in West Texas, Anadarko increased its estimated net resources in the Wolfcamp A formation by about 50 percent to more than 3 billion BOE of net resources. In addition, the company estimates it has more than 1 billion BOE of incremental potential upside on its acreage in the Wolfcamp B, C and D formations, the Bone Spring, and Avalon Shale opportunities. In 2017, the company plans to invest approximately $820 million in Delaware Basin upstream activities, with an additional $560 million of Anadarko capital allocated toward the expansion of its midstream backbone to enable future growth. Anadarko plans to average 10 to 14 operated drilling rigs during the year and drill more than 150 operated mid-lateral-equivalent wells.
In the DJ Basin of northeast Colorado, Anadarko increased its estimated net resources by about 33 percent as a result of improved recoveries and additional down-spacing opportunities. The company now estimates it has more than 2 billion BOE of net resources within its development area, with additional upside on its acreage in the greater DJ Basin. In 2017, Anadarko plans to invest approximately $840 million in DJ Basin upstream activities, average five to six operated rigs and drill approximately 290 mid-lateral-equivalent wells.
"We expect our current 2017 U.S. onshore capital allocation to deliver significant oil growth toward the end of the year as we overcome the effects of last year's reduced activity levels on our shorter-cycle onshore opportunities," added Walker. "We anticipate achieving an exit rate of approximately 50,000 barrels of oil per day in the Delaware Basin, which is more than 80-percent higher than 2016, and in the DJ Basin, we expect our oil-production exit rate to be about 100,000 barrels per day, a 30-percent increase over the prior year."
DEEPWATER & INTERNATIONAL OPERATIONS
In 2017, Anadarko expects to invest approximately $1.1 billion in its deepwater Gulf of Mexico, Algeria and Ghana assets.
In the Gulf of Mexico, the company plans to continue leveraging its premier infrastructure position and drill approximately seven development tiebacks during the year. In addition, Anadarko expects to benefit from a full year of production from the recently acquired Freeport-McMoRan properties, which doubled Anadarko's sales volumes to more than 160,000 BOE per day at the end of last year. Minimal capital investments are expected to be required in 2017 to maintain the steady, long-lived, high-margin oil production provided by the company's strong cash-generating assets in Algeria and offshore Ghana.
DEEPWATER & INTERNATIONAL EXPLORATION AND LNG
Exploration and LNG development continue to be differentiating components of Anadarko's business. In 2017, the company expects to invest approximately $770 million in its deepwater and international exploration program and LNG project in Mozambique.
During the year, Anadarko plans to drill up to 10 exploration/appraisal wells in the deepwater Gulf of Mexico, Côte d'Ivoire, and Colombia, where Anadarko recently added to its previous exploration success with another discovery at the Purple Angel prospect.
The company expects to continue advancing the Mozambique LNG project where it has made good progress on the legal and contractual framework, and recently submitted a Development Plan to the Government of Mozambique for the Golfinho/Atum discoveries.
CONFERENCE CALL TOMORROW AT 8 A.M. CST, 9 A.M. EST
Anadarko will host a conference call on Wednesday, March 8, 2017, at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) to discuss its initial 2017 capital program and guidance. The dial-in number is 877.883.0383 in the U.S. or 412.902.6506 internationally. The confirmation number is 4377341. To access the live audio webcast and related presentation materials, please visit the investor relations section of the company's website at www.anadarko.com. A replay of the conference call will also be available on the website for approximately 30 days following the call.
INVESTOR BOOK
Anadarko's updated Investor Book is available on the company's website at http://investors.anadarko.com/investor-kit.
Four pages of supplemental materials including the company's initial 2017 guidance, updated hedging positions and a reconciliation of same-store-sales volumes are provided in the tables attached to this release.
((1) )Does not include capital investments made by Western Gas Partners, LP (NYSE: WES).
((2) )See the accompanying table for a reconciliation of same-store-sales volumes, which reflects both divestitures and acquisitions.
Logo - http://photos.prnewswire.com/prnh/20141103/156201LOGO
Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2016, the company had 1.72 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, please visit www.anadarko.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including Anadarko's ability to successfully execute upon its capital program; to meet financial and operating guidance contained in this news release; to meet the long-term goals identified in this news release; to successfully drill, complete, test and produce the wells identified in this news release; and to successfully plan, secure necessary government approvals, enter into long-term sales contracts, finance, build, and operate the necessary infrastructure and LNG park in Mozambique. See "Risk Factors" in the company's 2016 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.
Cautionary Note to Investors: The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms. Anadarko uses certain terms in this news release, such as "net resources," "resource base," "potential upside," and similar terms that the SEC's guidelines strictly prohibit Anadarko from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in Anadarko's Form 10-K for the year ended Dec. 31, 2016, File No. 001-08968, available from Anadarko at www.anadarko.com or by writing Anadarko at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380, Attn: Investor Relations. This form may also be obtained by contacting the SEC at 1-800-SEC-0330.
Anadarko Contacts
MEDIA:
John Christiansen, john.christiansen@anadarko.com, 832.636.8736
INVESTORS:
Robin Fielder, robin.fielder@anadarko.com, 832.636.1462
Jim Grant, james.grant@anadarko.com, 832.636.8320
Pete Zagrzecki, pete.zagrzecki@anadarko.com, 832.636.7727
Anadarko Petroleum Corporation
Financial and Operating External Guidance
2017 Q1 Guidance
Note: Guidance excludes 2017 sales volumes associated with the Eagleford and Marcellus* divestitures.
1st-Qtr. Full-Year
Guidance (see Note) Guidance (see Note)
------------------ ------------------
Units Units
Total Sales Volumes (MMBOE) 59 - 61 235 - 239
Total Sales Volumes (MBOE/
d) 656 - 678 644 - 655
Oil (MBbl/d) 351 - 356 357 - 362
United States 253 - 256 273 - 276
Algeria 70 - 71 59 - 60
Ghana 28 - 29 25 - 26
Natural Gas (MMcf/d)
United States 1,260 - 1,300 1,165 - 1,195
Natural Gas Liquids (MBbl/
d)
United States 96 - 100 90 - 93
Algeria 5 - 7 5 - 6
$ / Unit $ / Unit
Price Differentials vs.
NYMEX (w/o hedges)
Oil ($/Bbl) (4.90) - (0.90) (5.10) - (1.00)
United States (6.00) - (2.00) (6.00) - (2.00)
Algeria (2.00) - 2.00 (2.00) - 2.00
Ghana (2.00) - 2.00 (2.00) - 2.00
Natural Gas ($/Mcf)
United States (0.35) - (0.15) (0.35) - (0.15)
* Pending
Anadarko Petroleum Corporation
Financial and Operating External Guidance
2017 Q1 Guidance
Note: Guidance excludes 2017 sales volumes associated with the Eagleford and Marcellus* divestitures.
1st-Qtr. Full-Year
Guidance (see Note) Guidance (see Note)
------------------ ------------------
$ MM $ MM
Other Revenues
Marketing and Gathering
Margin 75 - 85 380 - 400
Minerals and Other 55 - 75 180 - 200
Costs and Expenses
$ / BOE $ / BOE
Oil & Gas Direct Operating 3.90 - 4.10 4.00 - 4.50
Oil & Gas Transportation 3.40 - 3.60 3.50 - 3.65
Depreciation, Depletion, and
Amortization 15.75 - 16.10 17.80 - 17.90
Production Taxes (% of
Product Revenue) 6.5% - 7.5% 6.5% - 7.5%
$ MM $ MM
General and Administrative 260 - 280 1,000 - 1,050
Other Operating Expense 20 - 30 30 - 40
Exploration Expense
Non-Cash 210 - 240 450 - 550
Cash 55 - 75 235 - 255
Interest Expense (net) 215 - 230 845 - 865
Other (Income) Expense (5) - 5 (15) - -
Taxes
Algeria (100% current) 60% - 70% 60% - 70%
Rest of Company (100%
deferred) 5% - 15% 30% - 40%
Noncontrolling Interest 70 - 75 255 - 275
Avg. Shares Outstanding (MM)
Basic 551 - 553 552 - 554
Diluted 552 - 554 553 - 555
Capital Investment
(Excluding Western Gas
Partners, LP) $ MM $ MM
APC Capital Expectations 950 - 1,150 4,500 - 4,700
____________________
* Pending
Anadarko Petroleum Corporation
Commodity Hedge Positions
As of March 7, 2017
Weighted Average Price per barrel
Volume Floor Sold Floor Purchased Ceiling Sold
(MBbls/d)
---------
Oil
Three-Way Collars
2017
WTI 68 $40.00 $50.00 $58.84
Brent 23 $40.00 $50.00 $62.64
91 $40.00 $50.00 $59.80
Volume Weighted Average Price per MMBtu
(Thousand
MMBtu/d) Floor Sold Floor Purchased Ceiling Sold
-------- ---------- --------------- ------------
Natural Gas
Three-Way Collars
2017 682 $2.00 $2.75 $3.60
2018 250 $2.00 $2.75 $3.54
Anadarko Petroleum Corporation
Reconciliation of Same-Store Sales
Average Daily Sales Volumes
Oil Natural
Gas NGLs Total
MBbls/d MMcf/d MBbls/d MBOE/d
------- ------ ------- ------
Quarter Ended March 31, 2016
U.S. Onshore 130 1,128 71 389
Deepwater Gulf of
Mexico 58 85 7 79
International and
Alaska 93 - 6 99
Same-Store Sales 281 1,213 84 567
--- ----- --- ---
Divestitures** 34 1,090 44 260
--- ----- --- ---
Total 315 2,303 128 827
--- ----- --- ---
Quarter Ended June 30, 2016
U.S. Onshore 127 1,127 77 392
Deepwater Gulf of
Mexico 56 73 6 74
International and
Alaska 81 - 5 86
Same-Store Sales 264 1,200 88 552
--- ----- --- ---
Divestitures** 32 988 43 240
--- --- --- ---
Total 296 2,188 131 792
--- ----- --- ---
Quarter Ended September 30, 2016
U.S. Onshore 131 1,067 79 388
Deepwater Gulf of
Mexico 65 77 6 84
International and
Alaska 93 - 7 100
Same-Store Sales 289 1,144 92 572
--- ----- --- ---
Divestitures** 28 859 37 208
--- --- --- ---
Total 317 2,003 129 780
--- ----- --- ---
Quarter Ended December 31, 2016
U.S. Onshore 125 1,099 80 388
Deepwater Gulf of
Mexico 69 82 8 91
International and
Alaska 107 - 8 115
Acquisitions* 12 11 1 15
--- --- --- ---
Same-Store Sales 313 1,192 97 609
--- ----- --- ---
Divestitures** 23 689 27 165
--- --- --- ---
Total 336 1,881 124 774
--- ----- --- ---
Year Ended December 31, 2016
U.S. Onshore 129 1,105 77 390
Deepwater Gulf of
Mexico 62 79 7 82
International and
Alaska 93 - 6 99
Acquisitions* 3 3 - 4
Same-Store Sales 287 1,187 90 575
--- ----- --- ---
Divestitures** 29 906 38 218
--- --- --- ---
Total 316 2,093 128 793
--- ----- --- ---
* Includes volumes related to
the acquisition of Gulf of
Mexico assets on December
15, 2016.
** Includes East Chalk,
Wamsutter, Ozona, Elm Grove,
Hugoton, Hearne, Carthage,
Eagleford, and Marcellus
(pending).
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SOURCE Anadarko Petroleum Corporation
