HOUSTON--(BUSINESS WIRE)--Jan. 31, 2003--Anadarko Petroleum
Corporation (NYSE:APC) said today it expects to earn $1.15 per share
(diluted) for the first quarter of 2003, with expected cash flow of
$2.60 per share (diluted).
For the full year, the company expects earnings of $3.90 per share
(diluted) and cash flow of $10.10 per share (diluted).
PRICE ASSUMPTIONS
Anadarko's 2003 estimates assume average NYMEX oil prices of $29
per barrel for the first quarter and $24 per barrel thereafter, with a
full-year average of $25.25. The company's natural gas price estimate
is $5 per thousand cubic feet (Mcf) for the first quarter, and $4 per
Mcf thereafter, for a full-year average of $4.25 per Mcf. To determine
realized prices Anadarko used these estimates, plus or minus an
expected price "differential" for each of the company's major
producing areas, and any adjustment for hedge positions. Price data
are shown on an attached financial table.
For 2003, Anadarko has hedged approximately 40 percent of its
natural gas production through June and 35 percent for July through
December. About 35 percent of Anadarko's oil production is hedged
through December 2003. The hedge positions are under both fixed-price
and "collared" transactions, which use price ceilings and floors to
help ensure sales prices within a determined range. A summary of the
company's hedge positions is shown on an attached financial table.
VOLUME ASSUMPTIONS
Oil and gas sales volumes are expected to total 44 million barrels
of oil equivalent (BOE) in the first quarter. Full-year 2003 sales
volumes are expected to total 200 million BOE.
"Our 2003 volumes will be 3 million barrels lower than we had
forecast earlier because of the effect of higher oil prices on our
Venezuelan production, which reduced volumes by 2 million barrels, and
the ongoing strike in Venezuela, which reduced estimated volumes by 1
million barrels," said John Seitz, Anadarko President and CEO.
"Higher oil prices reduce our share of reported production under
the terms of a risk service contract with the state oil company,
whereby Anadarko earns a fee that translates into barrels of oil based
on current prices. So the price-related volume impact has essentially
no impact on revenues. The strike-related reductions are expected to
reduce cash flow by less than $20 million," he noted.
First quarter volumes will be lower than last year's fourth
quarter due to three factors: Fourth quarter volumes from Algeria were
unusually high due to an extra tanker lifting that had been delayed
from the third quarter. First quarter volumes will be impacted by the
strike in Venezuela and by a scheduled two-month shutdown of the Al
Rayyan oilfield in Qatar for installation of new production
facilities.
"But since our 2003 capital program is weighted to the first half
of the year, production should ramp up every quarter, and our fourth
quarter production is expected to be about 20 percent higher than the
first quarter," Seitz said. "That's the key to growth in 2004."
An attached financial table includes detailed production estimates
for each of Anadarko's key operating regions.
CAPITALIZATION RATIO
Anadarko expects to reduce its debt-to-total-capitalization ratio
from about 44 percent currently to 40 percent by year-end 2003. The
company expects to end the year with debt of approximately $5.3
billion.
EARNINGS CONFERENCE CALL
The Earnings and Modeling Conference Call is set for today at 11
a.m. CST (12 p.m. EST). This call will include a discussion of
detailed financial issues that support the company's projections of
future-period earnings. More details are available at
www.anadarko.com.
Anadarko Petroleum Corporation is one of the world's largest
independent oil and gas exploration and production companies.
Houston-based Anadarko is active in the U.S., Canada, Algeria and
Qatar and is executing strategic exploration programs in several other
countries. More information is available at 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 and Exchange Act of 1934. Anadarko believes that its
expectations are based on reasonable assumptions. No assurance,
however, can be given that its goals will be achieved. A number of
factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in
this release. While Anadarko makes these forward-looking statements in
good faith, neither Anadarko nor its management can guarantee that the
anticipated future results will be achieved. Anadarko discloses proved
reserves that comply with the Securities and Exchange Commission's
(SEC) definitions. Additionally, Anadarko may disclose estimated
recoverable reserves, which the SEC guidelines do not allow us to
include in filings with the SEC. See Additional Factors Affecting
Business in the Management's Discussion and Analysis included in the
company's 2001 Annual Report on Form 10-K.
Anadarko Petroleum Corporation
First Quarter 2003
Financial Model - Guidance
As of January 30, 2003
4th Quarter 1st Quarter Total Year
Actual Forecast Forecast
------------------- ----------------- -----------------
$MM $/ Share $MM $/ Share $MM $/ Share
------- ----------- ------- --------- ------- ---------
Net Income $309 $1.21 $295 $1.15 $1,000 $3.90
Cash Flow from
Operations $713 $2.76 $670 $2.60 $2,600 $10.10
---------------------- ------------------- ----------------- ---------
Price Deck
(NYMEX) ($/Unit) ($/Unit) ($/Unit)
Crude Oil
($/Bbl) $28.20 $29.00 $25.25
Natural Gas
($/Mcf) $3.98 $5.00 $4.25
Natural Gas
Liquids (%
of NYMEX Oil
Price) 62% 72% 76%
---------------------- ------------------- ----------------- ---------
Price Price Price
Differential Differential Differential
Volumes ($/Unit) Volumes ($/Unit) Volumes ($/Unit)
------- ----------- ------- --------- ------- ---------
Total Sales
(MMBoe) 49 44 200
Crude Oil
(MBbl/d): 214 $(3.53) 172 $(3.39) 198 $(2.82)
United States 84 $(3.17) 88 $(3.61) 95 $(2.23)
Canada 19 $(7.34) 15 $(6.54) 15 $(4.24)
Algeria 87 $(2.21) 56 $(1.52) 63 $(1.71)
Other
International 24 $(6.70) 13 $(6.52) 26 $(6.82)
Natural Gas
(MMcf/d): 1,682 $(0.48) 1,713 $(0.76) 1,877 $(0.56)
United States 1,295 $(0.44) 1,328 $(0.71) 1,445 $(0.48)
Canada 387 $(0.63) 385 $(0.97) 432 $(0.81)
Natural Gas
Liquids
(MBbl/d): 41 37 37
United States 38 35 35
Canada 2 2 2
---------------------- ------------------- ----------------- ---------
$MM $MM $MM
------- ------- -------
Other Revenues:
Marketing
Margin (Sales
- Costs) $10 $17 $59
Minerals and
Other $16 $16 $61
$MM $ / BOE $MM $ / BOE $MM $ / BOE
------- --------- ------- --------- ------- ---------
Costs and
Expenses:
Operating Costs $192 $3.90 $186 $4.19 $785 $3.92
Administrative
and General $87 $85 $332
Depreciation,
Depletion and
Amortization $292 $5.94 $280 $6.30 $1,267 $6.33
Impairments of
Oil and Gas
Assets $6 $- $50
Production and
Other Taxes (%
of Rev) $46 4.2% $71 6.3% $262 5.9%
---------------------- ------------------- ----------------- ---------
$MM $MM $MM
------- ------- -------
Other Items:
Interest
Expense $57 $58 $225
Other (Income)
Expense $4 $5 $37
---------------------- ------------------- ----------------- ---------
Federal Tax
Rate 28% 36% 36%
Deferred Taxes
(% of Total
Taxes) 60% 50% 48%
---------------------- ------------------- ----------------- ---------
Average Shares
Outstanding
(MM)
Basic 249 249 249
Diluted 258 259 259
---------------------- ------------------- ----------------- ---------
$MM $MM $MM
------- ------- -------
Capital
Investment
Program $558 $722 $2,300
Capital Budget $476 $639 $1,963
Capitalized
Direct
Expenses $48 $51 $200
Capitalized
Interest $34 $33 $137
Anadarko Petroleum Corporation
Hedge Position
As of January 31, 2003
Fixed and
Physical Contracts 2- Way Collars
------------------------------------------------
NYMEX
Volume Price Volume Floor Ceiling
------------------------------------------------
Crude Oil Bbl/d $/Bbl Bbl/d $/Bbl $/Bbl
------------------------------------------------
United States
1st Qtr 2003 14,000 $25.39 - $- $-
2nd Qtr 2003 14,000 $25.39 - $- $-
3rd Qtr 2003 14,000 $25.39 - $- $-
4th Qtr 2003 14,000 $25.39 - $- $-
Ttl Yr 2003 14,000 $25.39 - $- $-
Ttl Yr 2004 8,000 $23.09 - $- $-
Canada
1st Qtr 2003 2,000 $23.80 4,000 $22.30 $23.32
2nd Qtr 2003 700 $23.80 - $- $-
3rd Qtr 2003 - $- - $- $-
4th Qtr 2003 - $- - $- $-
Ttl Yr 2003 700 $23.80 1,000 $22.30 $23.32
Ttl Yr 2004 - $- - $- $-
------------------------------------------------
Total
1st Qtr 2003 16,000 $25.19 4,000 $22.30 $23.32
2nd Qtr 2003 14,700 $25.31 - $- $-
3rd Qtr 2003 14,000 $25.39 - $- $-
4th Qtr 2003 14,000 $25.39 - $- $-
Ttl Yr 2003 14,700 $25.31 1,000 $22.30 $23.32
Ttl Yr 2004 8,000 $23.09 - $- $-
------------------------------------------------
Natural Gas MMcf/d $/Mcf MMcf/d $/Mcf $/Mcf
------------------------------------------------
United States
1st Qtr 2003 200.0 $3.89 85.5 $4.62 $5.56
2nd Qtr 2003 200.0 $3.89 236.3 $4.70 $5.59
3rd Qtr 2003 270.0 $4.14 6.2 $3.00 $5.00
4th Qtr 2003 270.0 $4.14 6.2 $3.00 $5.00
Ttl Yr 2003 235.3 $4.03 83.1 $4.62 $5.56
Ttl Yr 2004 200.0 $3.88 6.2 $3.00 $5.00
Canada
1st Qtr 2003 68.2 $3.37 - $- $-
2nd Qtr 2003 68.2 $3.37 - $- $-
3rd Qtr 2003 68.2 $3.37 - $- $-
4th Qtr 2003 65.1 $3.24 - $- $-
Ttl Yr 2003 67.5 $3.34 - $- $-
Ttl Yr 2004 58.9 $3.19 - $- $-
------------------------------------------------
Total
1st Qtr 2003 268.2 $3.76 85.5 $4.62 $5.56
2nd Qtr 2003 268.2 $3.76 236.3 $4.70 $5.59
3rd Qtr 2003 338.2 $3.98 6.2 $3.00 $5.00
4th Qtr 2003 335.1 $3.97 6.2 $3.00 $5.00
Ttl Yr 2003 302.8 $3.88 83.1 $4.62 $5.56
Ttl Yr 2004 258.9 $3.72 6.2 $3.00 $5.00
------------------------------------------------
3- Way Collars
-------------------------------------------------
Sold Purchased
Volume Floor Floor Ceiling
------------------------------------------------
Crude Oil Bbl/d $/Bbl $/Bbl $/Bbl
------------------------------------------------
United States
1st Qtr 2003 53,000 $18.62 $23.81 $27.39
2nd Qtr 2003 53,000 $18.62 $23.81 $27.39
3rd Qtr 2003 53,000 $18.62 $23.81 $27.39
4th Qtr 2003 53,000 $18.62 $23.81 $27.39
Ttl Yr 2003 53,000 $18.62 $23.81 $27.39
Ttl Yr 2004 - $- $- $-
Canada
1st Qtr 2003 - $- $- $-
2nd Qtr 2003 - $- $- $-
3rd Qtr 2003 - $- $- $-
4th Qtr 2003 - $- $- $-
Ttl Yr 2003 - $- $- $-
Ttl Yr 2004 - $- $- $-
------------------------------------------------
Total
1st Qtr 2003 53,000 $18.62 $23.81 $27.39
2nd Qtr 2003 53,000 $18.62 $23.81 $27.39
3rd Qtr 2003 53,000 $18.62 $23.81 $27.39
4th Qtr 2003 53,000 $18.62 $23.81 $27.39
Ttl Yr 2003 53,000 $18.62 $23.81 $27.39
Ttl Yr 2004 - $- $- $-
------------------------------------------------
Natural Gas MMcf/d $/Mcf $/Mcf $/Mcf
------------------------------------------------
United States
1st Qtr 2003 308.8 $2.60 $3.68 $4.71
2nd Qtr 2003 308.8 $2.60 $3.68 $4.71
3rd Qtr 2003 308.8 $2.60 $3.68 $4.71
4th Qtr 2003 308.8 $2.60 $3.68 $4.71
Ttl Yr 2003 308.8 $2.60 $3.68 $4.71
Ttl Yr 2004 168.8 $2.47 $3.44 $4.89
Canada
1st Qtr 2003 - $- $- $-
2nd Qtr 2003 - $- $- $-
3rd Qtr 2003 - $- $- $-
4th Qtr 2003 - $- $- $-
Ttl Yr 2003 - $- $- $-
Ttl Yr 2004 - $- $- $-
------------------------------------------------
Total
1st Qtr 2003 308.8 $2.60 $3.68 $4.71
2nd Qtr 2003 308.8 $2.60 $3.68 $4.71
3rd Qtr 2003 308.8 $2.60 $3.68 $4.71
4th Qtr 2003 308.8 $2.60 $3.68 $4.71
Ttl Yr 2003 308.8 $2.60 $3.68 $4.71
Ttl Yr 2004 168.8 $2.47 $3.44 $4.89
------------------------------------------------
| CONTACT: |
Anadarko Petroleum Corporation, Houston |
| |
Media Contacts: |
| |
Teresa Wong, 832/636-1203 |
| |
teresa_wong@anadarko.com |
| |
or |
| |
Anne Vincent, 832/636-8368 |
| |
anne_vincent@anadarko.com |
| |
or |
| |
Investor Contacts: |
| |
Paul Taylor, 832/636-3471 |
| |
paul_taylor@anadarko.com |
| |
or |
| |
David Larson, 832/636-3265 |
| |
david_larson@anadarko.com |
| |
or |
| |
Stewart Lawrence, 832/636-3326 |
| |
stewart_lawrence@anadarko.com |
|
|