Anadarko Announces 2019 Second-Quarter Results
HOUSTON, July 26, 2019 /PRNewswire/ -- Anadarko Petroleum Corporation (NYSE: APC) today announced 2019 second?quarter results, reporting a net loss attributable to common stockholders of $1.025 billion, or $2.09 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items increased the net loss by $1.274 billion, or $2.60 per share (diluted), on an after-tax basis,((1)) which includes the Chevron merger termination fee and other merger transaction costs of $1.042 billion. Net cash provided by operating activities totaled $776 million for the quarter.
SECOND-QUARTER 2019 OPERATIONAL HIGHLIGHTS
Anadarko's second-quarter 2019 sales volume of oil, natural gas and natural gas liquids (NGLs) totaled 68 million barrels of oil equivalent (BOE), or an average of 744,000 BOE per day, which included 434,000 barrels of oil per day (BOPD).
Anadarko's U.S. onshore assets averaged sales volume of 484,000 BOE per day during the second quarter of 2019, which included 207,000 BOPD. Anadarko's Gulf of Mexico averaged 158,000 BOE per day in the quarter, which included 130,000 BOPD. Internationally, the company averaged 102,000 BOE per day during the second quarter, which included 97,000 BOPD.
On June 18, 2019, Anadarko and the co-venturers in Mozambique's Offshore Area 1 announced a Final Investment Decision (FID), officially confirming the Mozambique LNG project is advancing to the construction phase. The Anadarko-led Area 1 Mozambique LNG project will be Mozambique's first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.88 million tonnes per annum to support the development of the Golfinho/Atum fields located entirely within Offshore Area 1.
FINANCIAL DATA
Eight 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.
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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, 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 June 30, 2019
Before After Per Share
millions except per-
share amounts Tax Tax (diluted)
---
Net income (loss)
attributable to common
stockholders (GAAP) $
(1,025) $
(2.09)
Adjustments for certain
items affecting
comparability
Total gains (losses) on
derivatives, net, less
net cash from settlement
of commodity derivatives
(after noncontrolling
interest)* $
(227) (175) (0.36)
Gains (losses) on
divestitures, net 6 5 0.01
Lower-of-cost-or-
market inventory
adjustments (6) (5) (0.01)
Merger transaction costs (1,042) (1,042) (2.12)
Exploration assets -
impairments (38) (29) (0.06)
Reorganization-related
charges (15) (11) (0.02)
Change in uncertain tax
positions (17) (0.04)
Certain items affecting
comparability $
(1,322) (1,274) (2.60)
---
Adjusted net income
(loss) (Non-GAAP) $
249 $
0.51
---
* Includes $(232) million related to
interest-rate derivatives (after
noncontrolling interest) and $5
million related to commodity
derivatives.
Quarter Ended June 30, 2018
Before After Per Share
millions except per-
share amounts Tax Tax (diluted)
---
Net income (loss)
attributable to common
stockholders (GAAP) $
29 $
0.05
Adjustments for certain
items affecting
comparability
Total gains (losses) on
derivatives, net, less
net cash from settlement
of commodity
derivatives* $
(267) (205) (0.40)
Gains (losses) on
divestitures, net 52 39 0.07
Impairments
Producing properties
(after noncontrolling
interest) (45) (35) (0.07)
Exploration assets (41) (31) (0.06)
Contingency accrual (13) (10) (0.02)
Change in uncertain tax
positions (7) (0.01)
Certain items affecting
comparability $
(314) (249) (0.49)
---
Adjusted net income
(loss) (Non-GAAP) $
278 $
0.54
---
* Includes $32 million related
to interest-rate
derivatives, $(298) million
related to commodity
derivatives, and $(1) 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.
Three Months Ended Six Months Ended
June 30, June 30,
millions 2019 2018 2019 2018
---
Net income (loss)
attributable to common
stockholders (GAAP) $
(1,025) $
29 $
(1,040) $
150
Interest expense 249 237 502 465
Income tax expense
(benefit) 209 125 375 251
Depreciation, depletion,
and amortization 1,161 1,003 2,242 1,993
Exploration expense* 90 94 139 262
(Gains) losses on
divestitures, net (6) (52) (1) (28)
Impairments 128 147
Total (gains) losses on
derivatives, net, less
net cash from
settlement of commodity
derivatives 255 267 571 240
Reorganization-related
charges 15 33
Merger transaction costs 1,042 1,042
---
Consolidated Adjusted
EBITDAX (Margin) (Non-
GAAP) $
1,990 $
1,831 $
3,863 $
3,480
---
Total barrels of oil
equivalent (MMBOE) 68 58 132 116
---
Consolidated Adjusted
EBITDAX (Margin) per
BOE $
29.26 $
31.57 $
29.27 $
30.00
---
* Includes reorganization-related
charges of $1 million for the six
months ended June 30, 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.
June 30, 2019
Anadarko
Anadarko WES* excluding
millions Consolidated Consolidated WES
---
Total debt (GAAP) $
18,229 $
7,489 $
10,740
Less cash and cash
equivalents 1,394 96 1,298
---
Net debt (Non-GAAP) $
16,835 $
7,393 $
9,442
---
Anadarko
Anadarko excluding
millions Consolidated WES
---
Net debt $
16,835 $
9,442
Total equity 9,331 7,773
---
Adjusted
capitalization $
26,166 $
17,215
---
Net debt to adjusted 64 55
capitalization
ratio % %
---
* Western Midstream Partners, LP
(WES) is a publicly traded
consolidated subsidiary of
Anadarko.
Anadarko Petroleum Corporation
Cash Flow Information
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
millions 2019 2018 2019 2018
--- ---
Cash Flows from Operating Activities
---
Net income (loss) $
(945) $
17 $
(849) $
191
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities
Depreciation,
depletion, and
amortization 1,161 1,003 2,242 1,993
Deferred income
taxes (55) (15) (54) 27
Dry hole expense and
impairments of
unproved properties 41 43 41 149
Impairments - 128 147
(Gains) losses on
divestitures, net (6) (52) (1) (28)
Total (gains) losses
on derivatives, net 254 437 569 473
Operating portion of
net cash received
(paid) in
settlement of
derivative
instruments 1 (171) 2 (234)
Other 70 65 112 139
Changes in assets
and liabilities 255 (230) (157) (202)
---
Net Cash Provided by
(Used in) Operating
Activities $
776 $
1,225 $
1,905 $
2,655
---
Net Cash Provided by
(Used in) Investing
Activities $
(1,257) $
(1,943) $
(2,785) $
(3,056)
---
Net Cash Provided by
(Used in) Financing
Activities $
(149) $
(319) $
980 $
(1,826)
---
Anadarko Petroleum Corporation
(Unaudited)
Three Months Ended Six Months Ended
Summary Financial
Information
June 30,
June 30,
millions except per-
share amounts 2019 2018 2019 2018
--- ---
Consolidated Statements of Income
---
Revenues and Other
---
Oil sales $
2,470 $
2,265 $
4,566 $
4,392
Natural-gas sales 205 203 525 450
Natural-gas liquids
sales 216 318 456 610
Gathering, processing,
and marketing sales 465 382 935 742
Gains (losses) on
divestitures and
other, net 86 123 178 142
---
Total 3,442 3,291 6,660 6,336
---
Costs and Expenses
---
Oil and gas operating 310 275 599 551
Oil and gas
transportation 222 209 444 405
Exploration 90 94 139 262
Gathering, processing,
and marketing 274 252 530 489
General and
administrative 368 288 635 566
Merger transaction
costs 1,042 1,042
Depreciation,
depletion, and
amortization 1,161 1,003 2,242 1,993
Production, property,
and other taxes 182 201 381 391
Impairments - 128 147
Other operating expense 8 22 29 162
---
Total 3,657 2,472 6,041 4,966
---
Operating Income (Loss) (215) 819 619 1,370
---
Other (Income) Expense
---
Interest expense 249 237 502 465
(Gains) losses on
derivatives, net 254 436 567 471
Other (income) expense,
net 18 4 24 (8)
---
Total 521 677 1,093 928
---
Income (Loss) Before
Income Taxes (736) 142 (474) 442
---
Income tax expense
(benefit) 209 125 375 251
---
Net Income (Loss) (945) 17 (849) 191
---
Net income (loss)
attributable to
noncontrolling
interests 80 (12) 191 41
---
Net Income (Loss)
Attributable to Common
Stockholders $
(1,025) $
29 $
(1,040) $
150
---
Per Common Share
---
Net income (loss)
attributable to common
stockholders-basic $
(2.09) $
0.05 $
(2.13) $
0.28
Net income (loss)
attributable to common
stockholders-diluted $
(2.09) $
0.05 $
(2.13) $
0.28
---
Average Number of
Common Shares
Outstanding-Basic 491 504 491 511
---
Average Number of
Common Shares
Outstanding-Diluted 491 505 491 512
---
Exploration Expense
---
Dry hole expense $
3 $
2 $
3 $
55
Impairments of unproved
properties 38 41 38 94
Geological and
geophysical,
exploration overhead,
and other expense 49 51 98 113
---
Total $
90 $
94 $
139 $
262
---
Anadarko Petroleum Corporation
(Unaudited)
June 30, December 31,
millions 2019 2018
--- ---
Condensed Balance Sheets
---
Cash and cash
equivalents $
1,394 $
1,295
Accounts receivable, net
of allowance 1,779 2,026
Other current assets 298 474
Net properties and
equipment 29,091 28,615
Other assets 2,953 2,336
Goodwill and other
intangible assets 5,614 5,630
Total Assets $
41,129 $
40,376
---
Short-term debt -
Anadarko* 31 919
Short-term debt - WES - 28
Other current
liabilities 3,761 3,711
Long-term debt -
Anadarko* 10,709 10,683
Long-term debt - WES 7,489 4,787
Deferred income taxes 2,555 2,437
Asset retirement
obligations 2,879 2,847
Other long-term
liabilities 4,374 4,021
Common stock 58 57
Paid-in capital 13,135 12,393
Retained earnings (149) 1,245
Treasury stock (4,892) (4,864)
Accumulated other
comprehensive income
(loss) (379) (335)
Total stockholders'
equity 7,773 8,496
---
Noncontrolling interests 1,558 2,447
---
Total Equity 9,331 10,943
---
Total Liabilities and
Equity $
41,129 $
40,376
---
Capitalization
---
Total debt $
18,229 $
16,417
Total equity 9,331 10,943
---
Total $
27,560 $
27,360
---
Capitalization Ratios
---
Total debt 66
%
% 60
Total equity 34
%
% 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 June 30, 2019
United States 337 1,167 110 32 106 9 $
60.60 $
1.93 $
19.96
Algeria 60 5 5 1 67.60 35.83
Other International 37 3 71.01
Total 434 1,167 115 40 106 10 $
62.45 $
1.93 $
20.63
Quarter Ended June 30, 2018
United States 284 1,037 95 27 94 8 $
66.94 $
2.15 $
34.66
Algeria 52 5 5 1 74.73 39.34
Other International 28 2 71.76
Total 364 1,037 100 34 94 9 $
68.43 $
2.15 $
34.88
Six Months Ended June 30,
2019
United States 335 1,159 108 61 210 19 $
57.90 $
2.50 $
21.71
Algeria 60 5 11 1 64.57 35.39
Other International 28 5 69.01 0.65
Total 423 1,159 113 77 210 20 $
59.58 $
2.50 $
22.33
Six Months Ended June 30,
2018
United States 286 1,044 93 52 189 17 $
64.75 $
2.38 $
33.97
Algeria 54 5 10 1 70.93 40.06
Other International 28 5 69.70
Total 368 1,044 98 67 189 18 $
66.03 $
2.38 $
34.27
Average Daily Sales Volume Sales Volume
MBOE/d
MMBOE
Quarter Ended June
30, 2019 744 68
Quarter Ended June
30, 2018 637 58
Six Months Ended
June 30, 2019 729 132
Six Months Ended
June 30, 2018 640 116
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 June 30, 2019
United States $
1,862 $
205 $
200
$
$
$
Algeria 372 16
Other International 236
Total $
2,470 $
205 $
216
$
$
$
Quarter Ended June 30, 2018
United States $
1,726 $
203 $
301 $
(176) $
6
$
Algeria 359 17
Other International 180
Total $
2,265 $
203 $
318 $
(176) $
6
$
Six Months Ended June 30, 2019
United States $
3,516 $
525 $
423 $
6
$
$
Algeria 705 33
Other International 345
Total $
4,566 $
525 $
456 $
6
$
$
Six Months Ended June 30, 2018
United States $
3,349 $
450 $
575 $
(243) $
5
$
Algeria 690 35
Other International 353
Total $
4,392 $
450 $
610 $
(243) $
5
$
Anadarko Petroleum Corporation
Commodity Hedge Positions
As of July 26, 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 July 26, 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 June 30, 2019 Quarter Ended June 30, 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 207 1,073 98 484 169 969 86 417
Gulf of Mexico 130 93 12 158 114 66 9 134
International 97 5 102 80 5 85
Same-Store Sales 434 1,166 115 744 363 1,035 100 636
Divestitures 1 1 2 1
Total 434 1,167 115 744 364 1,037 100 637
Six Months Ended June 30, 2019 Six Months Ended June 30, 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 201 1,061 96 474 163 968 84 408
Gulf of Mexico 134 96 12 162 120 72 9 141
International 88 5 93 82 5 87
Same-Store Sales 423 1,157 113 729 365 1,040 98 636
Divestitures 2 3 4 4
Total 423 1,159 113 729 368 1,044 98 640
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SOURCE Anadarko Petroleum Corporation
