HOUSTON, Nov. 15, 2018 /PRNewswire/ -- Anadarko
Petroleum Corporation (NYSE: APC) today announced its 2019 capital
expectations and guidance. The company's 2019 capital investment
program is $4.3 to $4.7 billion,(1) which represents a
decrease relative to its 2018 program and delivers 10-percent oil
growth year over year. The capital investment plan is consistent
with the company's durable strategy focused on enhancing
shareholder value by delivering attractive margins and returns,
while advancing the development of the company's core assets and
generating material free cash flow at current strip prices.
In addition, Anadarko announced its board of directors has
authorized a $1 billion increase to
its share-repurchase program and a 20-percent increase to the
company's quarterly dividend. The company also increased its
debt-reduction program by an additional $500
million. To date, more than 10-percent of shares outstanding
have been retired since the inception of the share-repurchase
program, with $1.5 billion remaining
authorization to repurchase shares through mid-year 2020.
2019 CAPITAL PROGRAM HIGHLIGHTS
- 70 percent of investments are directed toward scalable,
oil-levered U.S. onshore assets
- $50 oil and $3 natural gas environment investment case
- ~$1.6 billion adjusted free cash
flow expected at $60 WTI,
$70 Brent, and $3 HH(2)
- 10 percent growth in oil sales volume(3)
- 15 percent or greater growth in oil sales volume per
debt-adjusted share(3)(4)
FOCUSED ON SHAREHOLDER RETURNS
- $1 billion addition to
share-repurchase program, now totaling $5
billion
- 20-percent increase in the quarterly dividend to $0.30 per share, a 500-percent increase during
2018
- $500 million increase to
debt-reduction program, now totaling $2
billion
"Our 2019 investment plan further demonstrates the capital
efficiency of our portfolio," said Anadarko Chairman and CEO
Al Walker. "We believe our
peer-leading ability to attractively grow oil volumes within cash
flow in a $50 oil environment while
delivering significant free cash flow above this break-even point,
positions our company very well to execute on our expanded
shareholder-return commitments in the near term and in a durable
fashion well into the future."
2019 Capital
Expectations ($4.3 - $4.7 Billion)(1)
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By
Area
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Billions
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By
Type
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U.S.
Onshore*
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$ 3.15
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Resource
Plays*
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70 %
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Deepwater Gulf of
Mexico
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0.50
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Conventional
Oil**
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16 %
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Algeria and
Ghana
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0.20
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Exploration and
LNG
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10 %
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Exploration
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0.25
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Corporate
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4 %
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LNG
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0.20
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* Delaware,
Denver-Julesburg (DJ), and Powder River basins, and other. Also
includes approximately $130 million midstream investment prior to
closing the Western Gas Partners, LP (WES) midstream transaction,
anticipated in the first quarter of 2019
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** Deepwater Gulf
of Mexico, Algeria, and Ghana operations
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Note: All amounts
are approximates.
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Sales-Volume
Expectations(3)
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2018
Guidance
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2019
Expectations
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Total
(MMBOE)
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240 - 245
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260 - 270
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Oil
(MBOPD)
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380 - 389
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410 - 435
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U.S. ONSHORE RESOURCE PLAYS
Anadarko plans to invest
approximately 70 percent of its 2019 capital in the U.S. onshore,
where it expects to operate an average of approximately 15 rigs and
10 completion crews focused primarily on development activities in
the Delaware and DJ basins.
Approximately $1.4 billion is
being allocated toward upstream activities in the Delaware Basin of West Texas.(1) The successful
expansion of the company's infrastructure footprint, including oil
gathering and treating throughout West
Texas, has paved the way to transition to multi-well pad
development, as illustrated by the encouraging early results at the
Silvertip-A campaign.
In the DJ Basin of northeast Colorado, the company expects to invest
approximately $1.3 billion on
upstream activities in 2019,(1) with continued
development of its minerals-interest ownership and
infrastructure-advantaged position in the Wattenberg field.
In 2019, Anadarko also expects to continue its appraisal program
in Wyoming's Powder River Basin. The company plans to
complete 10 to 15 operated horizontal wells to progress the
company's appraisal efforts in this high-potential acreage position
targeting the southern Turner-formation fairway in Converse County.
CONVENTIONAL OIL
Anadarko plans to allocate
approximately $500 million toward its
deepwater Gulf of Mexico
operations, which is about $300
million less than in 2018, while delivering a similar number
of wells and maintaining production levels between 140,000 and
150,000 barrels of oil equivalent (BOE) per day.
The company also plans to allocate about $200 million toward its international
cash-generating operations in Algeria and Ghana in 2019, where the company expects
stable year-over-year, Brent-levered oil production. Offshore
Ghana, investments will be focused
on adding incremental wells to optimize capacity at the Jubilee and
TEN floating, production, storage and offloading (FPSO)
vessels.
EXPLORATION
The company's exploration investments in
2019 are expected to total about $250
million, focused on identifying material and scalable
opportunities in the U.S. onshore and satellite opportunities near
existing operated facilities in the deepwater Gulf of Mexico.
LNG
Approximately $200
million is being allocated toward the Mozambique LNG
project, pre FID (final investment decision), for Anadarko's
portion of the costs associated with ongoing site preparation for
the shared onshore facilities. The company remains on track for FID
consideration in the first half of 2019, and anticipates adjusting
its capital-investment expectations associated with the Mozambique
LNG project at the time of project sanction.
ANADARKO DECLARES DIVIDEND
On Nov. 15, 2018, Anadarko's board of directors
declared a quarterly cash dividend on the company's common stock of
30 cents per share, payable
Dec. 26, 2018 to shareholders of
record at the close of business on Dec. 12,
2018. The amount of future dividends for Anadarko common
stock will depend on earnings, financial condition, capital
requirements and other factors. The board of directors will
determine dividends on a quarterly basis.
PRESENTATION AND WEBCAST
Anadarko will provide
additional details and information regarding the 2019 capital
program during a presentation at the Bank of America Merrill Lynch
2018 Global Energy Conference today at 4:20
p.m. EST. The link to the audio webcast presentation will be
available in the Investor section at www.anadarko.com. The replay
and slide presentation also will be available on the company's
website for approximately 30 days following the event.
(1) Does not include capital investments to be made
by Western Gas Equity Partners, LP (NYSE: WGP) and capital
investments resulting from Mozambique FID, anticipated in the first
half of 2019.(2) See the accompanying table for a
reconciliation of the GAAP to the non-GAAP financial measure and a
statement indicating why management believes the non-GAAP financial
measure provides useful information for investors.
(3) Amounts are divestiture adjusted.
(4) Debt-adjusted share(s) is computed as follows:
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Average Anadarko
Debt
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+ Average Shares
Outstanding
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Average Share
Price
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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
2017, the company had approximately 1.44 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 efficiently identify and deploy capital
resources; to meet financial and operating guidance and achieve the
production growth and cash flow levels identified in this news
release; to successfully complete the transaction identified in
this news release; to successfully complete the share-repurchase
and debt-reduction programs; to successfully drill, complete, test
and produce the wells identified in this news release; to timely
complete and commercially operate the projects, and drilling
prospects identified in this news release; and to successfully
plan, secure additional government approvals, enter into long-term
sales contracts, 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 2017 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:
Robin
Fielder, robin.fielder@anadarko.com, 832.636.1462
Andy Taylor,
andy.taylor@anadarko.com, 832.636.3089
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. The company undertakes no obligation to
publicly update or revise any non-GAAP financial measures or
related reconciliation.
Adjusted Discretionary Cash Flow from Operations (Adjusted
DCF) and Adjusted Free Cash Flow (Adjusted FCF)
The Company defines Adjusted DCF as net cash provided by (used
in) operating activities before changes in accounts receivable;
changes in accounts payable and other current liabilities; other
items, net; certain nonoperating and other excluded items; and
Western Gas Partners, LP (WES)/Western Gas Equity Partners, LP
(WGP) distributions to third parties.
The Company defines Adjusted FCF as Adjusted DCF, less APC
capital expenditures, which excludes WES.
Management believes that these measures are useful to management
and investors as a measure of a 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.
The Company's press release includes a forward-looking Adjusted
FCF estimate; however, the Company is unable to provide a
quantitative reconciliation of the forward-looking non-GAAP measure
to its most directly comparable forward-looking GAAP measure
because management cannot reliably predict certain of the necessary
components of such forward-looking GAAP measure. The reconciling
items in future periods could be significant. Below is a
reconciliation of Net cash provided by (used in) operating
activities (GAAP) to Adjusted free cash flow (Non-GAAP) for the
most recently reported quarterly periods of 2018.
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2018
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millions
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Q1
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Q2
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Q3
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Net cash provided
by (used in) operating activities (GAAP)
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$
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1,430
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$
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1,225
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$
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1,647
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Adjusted
by:
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Increase (decrease)
in accounts receivable
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(23)
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114
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253
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(Increase) decrease
in accounts payable and other current liabilities
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(45)
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(46)
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(139)
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Other items,
net
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40
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162
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61
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WES/WGP distributions
to third parties
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(118)
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(120)
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(127)
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Adjusted
discretionary cash flow from operations (Non-GAAP)
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$
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1,284
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$
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1,335
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$
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1,695
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Less APC capital
expenditures (excludes WES)
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1,377
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1,497
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1,151
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Adjusted free cash
flow (Non-GAAP)
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$
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(93)
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$
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(162)
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$
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544
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SOURCE Anadarko Petroleum Corporation