Anadarko Announces 2019 First-Quarter Results
HOUSTON, April 25, 2019 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced 2019 first?quarter results, reporting a net loss attributable to common stockholders of $15 million, or $0.03 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by $274 million, or $0.56 per share (diluted), on an after-tax basis.((1))
Anadarko generated $1.129 billion of cash flow from operations during the quarter, while capital expenditures totaled $1.030 billion, excluding Western Midstream Partners, LP (NYSE: WES). Additionally, the company reported discretionary cash flow from operations of $1.541 billion((2)) and adjusted free cash flow of $381 million((2)) for the quarter.
FIRST-QUARTER 2019 HIGHLIGHTS
Anadarko's first-quarter 2019 sales volume of oil, natural gas and natural gas liquids (NGLs) totaled 64 million barrels of oil equivalent (BOE), or an average of 715,000 BOE per day, which included 412,000 barrels of oil per day (BOPD).
Anadarko's U.S. onshore assets averaged sales volume of 465,000 BOE per day during the first quarter of 2019, which included 195,000 BOPD. Anadarko's Gulf of Mexico averaged a record 166,000 BOE per day in the quarter, which included 138,000 BOPD. Internationally, the company averaged 84,000 BOE per day during the first quarter, which included 79,000 BOPD.
The company also continued to make significant progress with its Mozambique LNG project, announcing Sale and Purchase Agreements (SPAs) now totaling more than 9.5 million tonnes per annum (MTPA), with two additional SPAs in the final stages of execution that, if executed, would bring the total volume to more than 11 MTPA. During the quarter, the project also was designated as the first mover by the Government of Mozambique for the marine facilities to support the onshore LNG industry in Mozambique. The company remains positioned to take a final investment decision (FID) during the first half of this year.
FINANCIAL DATA
Nine pages of summary financial data follow, including current hedge positions and a reconciliation of "divestiture-adjusted" or "same-store" sales.
(1) See the accompanying table for
details of certain items affecting
comparability.
(2) See the accompanying table for a
reconciliation of GAAP to non-GAAP
financial measures and a statement
indicating why management believes
the non-GAAP financial measures
provide useful information for
investors.
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 2018, the company had 1.47 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 plan, secure additional government and partner approvals, enter into the additional long-term sales contracts identified in this release, take FID and the timing thereof, finance, build, and operate the necessary infrastructure and LNG park in Mozambique. See "Risk Factors" in the company's 2018 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.
Anadarko Contacts
INVESTORS:
Mike Pearl, mike.pearl@anadarko.com, 832.636.3271
Kyle Deakins, kyle.deakins@anadarko.com, 832.636.2354
Jon VandenBrand, jon.vandenbrand@anadarko.com, 832.636.1007
MEDIA:
John Christiansen, john.christiansen@anadarko.com, 832.636.8736
Stephanie Moreland, stephanie.moreland@anadarko.com, 832.636.2912
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Below are reconciliations of certain GAAP to non-GAAP financial measures, each as required under Regulation G of the Securities Exchange Act of 1934. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be comparable to similarly titled measures.
Management uses adjusted net income (loss) to evaluate operating and financial performance and believes the measure is useful to investors because it eliminates the impact of certain noncash and/or other items that management does not consider to be indicative of the Company's performance from period to period. Management also believes this non-GAAP measure is useful to investors to evaluate and compare the Company's operating and financial performance across periods, as well as facilitating comparisons to others in the Company's industry.
Quarter Ended March 31, 2019
Before After Per Share
millions except per-
share amounts Tax Tax (diluted)
---
Net income (loss)
attributable to common
stockholders (GAAP) $
(15) $
(0.03)
Adjustments for certain
items affecting
comparability
Total gains (losses) on
derivatives, net, less
net cash from settlement
of commodity derivatives
(after noncontrolling
interest)* $
(300) (232) (0.47)
Gains (losses) on
divestitures, net (5) (4) (0.01)
Contingency accruals (9) (7) (0.01)
Reorganization-related
charges (19) (15) (0.04)
Change in uncertain tax
positions (16) (0.03)
Certain items affecting
comparability $
(333) (274) (0.56)
---
Adjusted net income
(loss) (Non-GAAP) $
259 $
0.53
---
* Includes $(155) million related to
commodity derivatives, $(148)
million related to interest-rate
derivatives (after noncontrolling
interest) and $3 million related
to gathering, processing, and
marketing sales.
Quarter Ended March 31, 2018
Before After Per Share
millions except per-
share amounts Tax Tax (diluted)
---
Net income (loss)
attributable to
common stockholders
(GAAP) $
121 $
0.22
Adjustments for
certain items
affecting
comparability
Total gains (losses)
on derivatives,
net, less net cash
from settlement of
commodity
derivatives* $
27 21 0.04
Gains (losses) on
divestitures, net (24) (17) (0.03)
Impairments
Producing properties (19) (15) (0.03)
Exploration assets (53) (41) (0.08)
Contingency accruals (132) (101) (0.19)
Change in uncertain
tax positions (5) (0.01)
Certain items
affecting
comparability $
(201) (158) (0.30)
---
Adjusted net income
(loss) (Non-GAAP) $
279 $
0.52
---
* Includes $(94) million related
to commodity derivatives,
$127 million related to
interest-rate derivatives,
and $(6) million related to
gathering, processing, and
marketing sales.
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
Management believes that the presentation of Adjusted EBITDAX (Margin) provides information useful in assessing the Company's operating and financial performance across periods.
Quarter Ended March 31,
millions 2019 2018
---
Net income (loss)
attributable to common
stockholders (GAAP) $
(15) $
121
Interest expense 253 228
Income tax expense
(benefit) 166 126
Depreciation,
depletion, and
amortization 1,081 990
Exploration expense* 49 168
(Gains) losses on
divestitures, net 5 24
Impairments 19
Total (gains) losses on
derivatives, net, less
net cash from
settlement of
commodity derivatives 316 (27)
Reorganization-related
charges 18
---
Consolidated Adjusted
EBITDAX (Margin) (Non-
GAAP) $
1,873 $
1,649
---
Total barrels of oil
equivalent (MMBOE) 64 58
---
Consolidated Adjusted
EBITDAX (Margin) per
BOE $
29.27 $
28.43
---
* Includes reorganization-related
charges of $1 million for the three
months ended March 31, 2019.
Management uses net debt to determine the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt in the capitalization ratio is useful to investors in determining the Company's leverage since the Company could choose to use its cash and cash equivalents to retire debt. In addition, management believes that presenting Anadarko's net debt excluding WES is useful because WES is a separate public company with its own capital structure.
March 31, 2019
Anadarko
Anadarko WES* excluding
millions Consolidated Consolidated WES
---
Total debt (GAAP) $
17,924 $
7,208 $
10,716
Less cash and cash
equivalents 2,026 100 1,926
---
Net debt (Non-GAAP) $
15,898 $
7,108 $
8,790
---
Anadarko
Anadarko excluding
millions Consolidated WES
---
Net debt $
15,898 $
8,790
Total equity 10,533 8,928
---
Adjusted
capitalization $
26,431 $
17,718
---
Net debt to adjusted 60 50
capitalization ratio
% %
---
* Western Midstream Partners, LP
(WES) is a publicly traded
consolidated subsidiary of
Anadarko.
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
Management uses Discretionary Cash Flow from Operations (DCF), Free Cash Flow (FCF), Adjusted DCF, and Adjusted FCF to determine the company's ability to internally fund its capital expenditures and to service or incur additional debt. These measures eliminate the impact of certain items that management does not consider to be indicative of the Company's performance from period to period. To assist in measuring the Company's performance, management will also evaluate Anadarko on a deconsolidated basis, which excludes WES.
Discretionary Cash Flow from Operations and Free Cash Flow
Quarter Ended
March 31,
millions 2019 2018
---
Net cash provided by
(used in) operating
activities (GAAP) $
1,129 $
1,430
Add back
Increase (decrease) in
accounts receivable 39 (23)
(Increase) decrease in
accounts payable and
other current
liabilities 294 (45)
Other items, net 79 40
Discretionary cash
flow from operations
(Non-GAAP) $
1,541 $
1,402
---
Less
APC capital
expenditures* 1,030 1,374
WES capital
expenditures 266 330
---
Free cash flow (Non-
GAAP) $
245 $
(302)
---
* APC capital expenditures include $49
million at March 31, 2019, and $258
million at March 31, 2018, of
midstream capitalized costs incurred
by Anadarko prior to the contribution
and sale of its midstream assets to
WES.
Adjusted Discretionary Cash Flow from Operations and Adjusted Free Cash Flow
Quarter Ended
March 31,
millions 2019 2018
---
Net cash provided by
(used in) operating
activities (GAAP) $
1,129 $
1,430
Adjusted by:
Increase (decrease)
in accounts
receivable 39 (23)
(Increase) decrease
in accounts payable
and other current
liabilities 294 (45)
Other items, net 79 40
WES distributions to
third parties (130) (118)
Adjusted
discretionary cash
flow from operations
(Non-GAAP) $
1,411 $
1,284
---
Less APC capital
expenditures
(excludes WES)* 1,030 1,374
---
Adjusted free cash
flow (Non-GAAP) $
381 $
(90)
---
* APC capital expenditures include $49
million at March 31, 2019, and $258
million at March 31, 2018, of
midstream capitalized costs incurred
by Anadarko prior to the contribution
and sale of its midstream assets to
WES.
Anadarko Petroleum Corporation
Cash Flow Information
(Unaudited)
Quarter Ended
March 31,
millions 2019 2018
--- ---
Cash Flows from Operating Activities
---
Net income (loss) $
96 $
174
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities
Depreciation,
depletion, and
amortization 1,081 990
Deferred income
taxes 1 42
Dry hole expense and
impairments of
unproved properties - 106
Impairments - 19
(Gains) losses on
divestitures, net 5 24
Total (gains) losses
on derivatives, net 315 36
Operating portion of
net cash received
(paid) in
settlement of
derivative
instruments 1 (63)
Other 42 74
Changes in assets
and liabilities (412) 28
---
Net Cash Provided by
(Used in) Operating
Activities $
1,129 $
1,430
---
Net Cash Provided by
(Used in) Investing
Activities $
(1,528) $
(1,113)
---
Net Cash Provided by
(Used in) Financing
Activities $
1,129 $
(1,507)
---
Anadarko Petroleum Corporation
(Unaudited)
Quarter Ended
Summary Financial
Information March 31,
millions except per-
share amounts 2019 2018
--- ---
Consolidated Statements of Income
---
Revenues and Other
---
Oil sales $
2,096 $
2,127
Natural-gas sales 320 247
Natural-gas liquids
sales 240 292
Gathering, processing,
and marketing sales 470 360
Gains (losses) on
divestitures and other,
net 92 19
---
Total 3,218 3,045
---
Costs and Expenses
---
Oil and gas operating 289 276
Oil and gas
transportation 222 196
Exploration 49 168
Gathering, processing,
and marketing 256 237
General and
administrative 267 278
Depreciation, depletion,
and amortization 1,081 990
Production, property,
and other taxes 199 190
Impairments - 19
Other operating expense 21 140
---
Total 2,384 2,494
---
Operating Income (Loss) 834 551
---
Other (Income) Expense
---
Interest expense 253 228
(Gains) losses on
derivatives, net 313 35
Other (income) expense,
net 6 (12)
---
Total 572 251
---
Income (Loss) Before
Income Taxes 262 300
---
Income tax expense
(benefit) 166 126
---
Net Income (Loss) 96 174
---
Net income (loss)
attributable to
noncontrolling
interests 111 53
---
Net Income (Loss)
Attributable to Common
Stockholders $
(15) $
121
---
Per Common Share
---
Net income (loss)
attributable to common
stockholders-basic $
(0.03) $
0.23
Net income (loss)
attributable to common
stockholders-diluted $
(0.03) $
0.22
---
Average Number of Common
Shares Outstanding-
Basic 490 518
---
Average Number of Common
Shares Outstanding-
Diluted 490 519
---
Exploration Expense
---
Dry hole expense
$ $
53
Impairments of unproved
properties - 53
Geological and
geophysical,
exploration overhead,
and other expense 49 62
---
Total $
49 $
168
---
Anadarko Petroleum Corporation
(Unaudited)
March 31, December 31,
millions 2019 2018
--- ---
Condensed Balance Sheets
---
Cash and cash
equivalents $
2,026 $
1,295
Accounts receivable, net
of allowance 2,065 2,026
Other current assets 338 474
Net properties and
equipment 28,936 28,615
Other assets 3,006 2,336
Goodwill and other
intangible assets 5,622 5,630
Total Assets $
41,993 $
40,376
---
Short-term debt -
Anadarko* 21 919
Short-term debt - WES 2,000 28
Other current
liabilities 3,728 3,711
Long-term debt -
Anadarko* 10,695 10,683
Long-term debt - WES 5,208 4,787
Deferred income taxes 2,624 2,437
Asset retirement
obligations 2,876 2,847
Other long-term
liabilities 4,308 4,021
Common stock 57 57
Paid-in capital 13,057 12,393
Retained earnings 1,024 1,245
Treasury stock (4,881) (4,864)
Accumulated other
comprehensive income
(loss) (329) (335)
Total stockholders'
equity 8,928 8,496
---
Noncontrolling interests 1,605 2,447
---
Total Equity 10,533 10,943
---
Total Liabilities and
Equity $
41,993 $
40,376
---
Capitalization
---
Total debt $
17,924 $
16,417
Total equity 10,533 10,943
---
Total $
28,457 $
27,360
---
Capitalization Ratios
---
Total debt 63
%
% 60
Total equity 37
%
% 40
---
*
Excludes WES
Anadarko Petroleum Corporation
(Unaudited)
Sales Volume and Prices
Average Daily Sales Volume
Sales Volume
Average Sales Price
Oil Natural Gas NGLs Oil Natural Gas NGLs
Oil Natural Gas NGLs
MBbls/d MMcf/d MBbls/d MMBbls Bcf MMBbls Per Bbl Per Mcf Per Bbl
---
Quarter Ended March 31, 2019
United States 333 1,150 106 29 104 10 $
55.14 $
3.09 $
23.54
Algeria 61 5 6 61.49 35.01
Other International 18 1 2 65.04 0.65
Total 412 1,151 111 37 104 10 $
56.51 $
3.09 $
24.11
Quarter Ended March 31, 2018
United States 288 1,051 92 25 95 9 $
62.58 $
2.61 $
33.24
Algeria 55 5 5 67.24 40.76
Other International 28 3 67.68
Total 371 1,051 97 33 95 9 $
63.66 $
2.61 $
33.63
Average Daily Sales
Volume Sales Volume
MBOE/d
MMBOE
Quarter Ended March
31, 2019 715 64
Quarter Ended March
31, 2018 643 58
Sales Revenue and Commodity Derivatives
Sales Net Cash Received (Paid) from Settlement of
Commodity
Derivatives
millions
Oil Natural Gas NGLs
Oil Natural Gas NGLs
Quarter Ended March
31, 2019
United States $
1,654 $
320 $
223 $
6
$
$
Algeria 333 17
Other International 109
Total $
2,096 $
320 $
240 $
6
$
$
Quarter Ended March
31, 2018
United States $
1,623 $
247 $
274 $
(67) $
(1)
$
Algeria 331 18
Other International 173
Total $
2,127 $
247 $
292 $
(67) $
(1)
$
Anadarko Petroleum Corporation
Commodity Hedge Positions
As of April 25, 2019
Weighted Average Price per barrel
Volume Floor Sold Floor Purchased Ceiling Sold
(MBbls/d)
Oil
Three-Way Collars
2019
WTI 57 $
45.00 $
55.00 $
70.22
Brent 30 $
50.00 $
60.00 $
78.22
87
Interest-Rate Derivatives
As of April 25, 2019
Instrument Notional Amt.
Reference Period
Mandatory Rate Paid Rate Received
Termination Date
--- ---
Anadarko
Swap
$550 Million
September 2016 - 2046
September 2020 6.418%
3M LIBOR
Swap
$250 Million
September 2016 - 2046
September 2022 6.809%
3M LIBOR
Swap
$100 Million
September 2017 - 2047
September 2020 6.891%
3M LIBOR
Swap
$250 Million
September 2017 - 2047
September 2021 6.570%
3M LIBOR
Swap
$450 Million
September 2017 - 2047
September 2023 6.445%
3M LIBOR
WES
Swap
$375 Million
December 2019 - 2024
December 2019 2.662%
3M LIBOR
Swap
$375 Million
December 2019 - 2029
December 2019 2.802%
3M LIBOR
Swap
$375 Million
December 2019 - 2049
December 2019 2.885%
3M LIBOR
--- ---
Anadarko Petroleum Corporation
Reconciliation of Same-Store Sales
Average Daily Sales Volume
Quarter Ended March 31, 2019 Quarter Ended March 31, 2018
Oil Natural Gas NGLs Total Oil Natural Gas NGLs Total
MBbls/d MMcf/d MBbls/d MBOE/d MBbls/d MMcf/d MBbls/d MBOE/d
---
U.S. Onshore 195 1,051 94 465 156 969 83 400
Gulf of Mexico 138 97 12 166 126 78 9 148
International 79 1 5 84 83 5 88
Same-Store Sales 412 1,149 111 715 365 1,047 97 636
Divestitures* 2 6 4 7
Total 412 1,151 111 715 371 1,051 97 643
* Includes Ram Powell and
Alaska.
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SOURCE Anadarko Petroleum Corporation
