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The Woodlands, Texas oil and gas development company Andarko Petroleum reported worse than expected Fourth quarter earnings after the close Tuesday. Sales volumes rose but $APC's average selling price fell to $59.86/bbl from $56.32/bbl and total expenses jumped 19%.

Anadarko Paltform

Anandarko Petroleum Corp $APC Reported Earnings After Close Tuesday

$0.38 Missed $0.61 EPS But $3.35 Beat $3.31 Billion Revenue Forecast

Earnings

Anadarko (APC) reported fourth quarter adjusted earnings per share of 38 cents on revenue of $3.35 billion. Analysts consensus EPS Estimate was $0.61 (+238.9% Y/Y) and the consensus Revenue Estimate was $3.31B (+13.4% Y/Y). The GAAP EPS was expected to be 72 cents.  

Sales volumes rose but APC's average selling price during the quarter fell to $59.86/bbl from $56.32/bbl and total expenses jumped 19% to $3.08B as the company ramped up investments in West Texas' Delaware Basin and Colorado's DJ Basin.

Mozambique LNG Project

Ahead of Earnings Anadarko Petroleum announced two major long-term contracts with it's proposed liquefied natural gas terminal in Mozambique, bringing it a step closer to building the first on-shore LNG plant in the African country at a time when global LNG demand is expected to soar.

Anadarko Mozambique LNG

APC's Mozambique project struck a long-term deal with one of the world's biggest purchasers of liquefied natural gas, Tokyo Gas Co Ltd. and Centrica LNG Company Ltd., a subsidiary of Centrica plc. Separately it also announced a deal with a subsidiary with Shell. Anadarko said the Tokyo Gas-Centrica deal call for the co-purchasing 2.6 million metric annually of liquefied natural gas from the start-up of production at Mozambique LNG until the early 2040s. The Mozambique project would produce 12.88 million metric tons per a year, supporting development of the Golfinho/Atum oilfield located entirely within an area known as Offshore Area 1.

Anadarko also announced that it struck a 13-year agreement with a Shell subsidiary to buy 2 million metric tons of liquefied natural gas from its Mozambique LNG project. Combined with its previously announced agreements, Anadarko now has agreements to supply customers with 7.5 million metric tons annually. The company said it expected to announce additional agreements soon. It will make a final investment decision to green-light construction of the project in the first half of this year

Anadarko Petroleum Corp NYSE: $APC

Market Reaction After hours 47.59 −1.49 (-3.04%)

Highlights

  • APC says Q4 sales volumes for oil, natural gas and natural gas liquids averaged 701K boe/day, up 10% from 637K boe/day in the year-ago quarter, while FY 2018 sales volumes averaged 666K boe/day;
  • For FY 2019, APC forecasts total sales volume of 260M-270M boe vs. 243M boe in 2018.
  • But while sales volumes rose, APC's average selling price during the quarter fell to $59.86/bbl from $56.32/bbl and total expenses jumped 19% to $3.08B as the company ramped up investments in West Texas' Delaware Basin and Colorado's DJ Basin;
  • APC also reports $226M in income taxes for Q4, compared with a $1.11B tax benefit in the year-ago quarter.
  • APC says it organically added 284M boe of proved reserves before the effects of price revisions during 2018 to 1.47B boe (63% liquids, 37% natural gas), with 78% of its reserves categorized as proved developed.
  • While expecting continued market volatility "for some time," APC maintains previously announced capital spending plans of $4.3B-$4.7B, which enables it to operate within anticipated discretionary cash flow at $50/bbl oil and remain committed to maximizing capital efficiency and enhancing returns on a multi-year basis.

 

Anandarko Petroleum Q3 Earnings Recap

$0.82 Missed $0.87 EPS BUT $3.7B Beat $3.44 Billion Revenue Forecast

Earnings

Anadarko (APC) reported third quarter earnings of $0.82 per share, missing the consensus estimate of $0.87 per share. This compares to loss of $0.77 per share a year ago. These figures are adjusted for non-recurring items. APC posted revenues of $3.70 billion for the quarter ended surpassing the Zacks consensus  $3.44 billion.

Anadarko Petroleum Corp NYSE: $APC

Market Reaction Pre Market $57.33 +0.88 (+1.56%)

Highlights

      • APC achieved record onshore oil sales volumes of 175K bbl/day of oil during Q3, up 37% Y/Y on a divestiture adjusted basis, and margins of $33.68/boe jumped 58% from a year ago.
      • Q3 total volumes rose 9% Y/Y to 682K boe/day, including a 70% increase to a record 70K boe/day in the Delaware Basin and a monthly record oil rate of more than 140K boe/day in August from the deepwater Gulf of Mexico, where it achieved record production at the Caesar/Tonga development.
      • APC capital spending for the quarter totaled $1.4B, exceeding its previous guidance of $1.05B-$1.25B, but the company expects annual capex to come in unchanged at $4.5B-$4.8B.

What to watch with APC is the debt load, cost and oil and gas revenue. In the first six months of the year, Anadarko has spent more cash on capital expenditures than it generated from its operations. The obvious risk is if oil prices fall significantly, Anadarko may have to lower CapEx. That would impact dividend payments. 

Anadarko Petroleum Corporation will host an investor conference call on Wednesday, Oct. 31, 2018, at 8 a.m. CDT (9 a.m. EDT) to discuss its third-quarter 2018 financial and operating results.

Earnings will be released after close of market on Tuesday, Oct. 30. The full text of the release will be available on the company's website at www.anadarko.com. Wednesday, Oct. 31, 2018.

About Anadarko

Anadarko Petroleum Corporation is an independent exploration and production company. The Company’s segments include Oil and Gas Exploration & Production; Midstream, and Marketing. The Oil and Gas Exploration & Production segment explores for and produces oil, condensate, natural gas and natural gas liquids (NGLs), and focuses on the development and operation of the Company’s liquefied natural gas (LNG) project in Mozambique.

The company’s asset portfolio includes U.S. onshore resource plays in the Rocky Mountains, the southern United States, the Appalachian basin and Alaska; the deepwater Gulf of Mexico; and in Mozambique, Algeria, Ghana, Brazil, Colombia, Côte d’Ivoire, Kenya, Liberia, New Zealand and other countries.

Source: Anadarko

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