Anadarko presents at EnerCom’s The Oil & Gas Conference®
During Anadarko’s breakout session, management was asked the following questions:
- As you roll into next year, how are you thinking about CAPEX and cash flow given the probable lack of divestiture properties?
- If we did get back to $60 oil, where would the focus and incremental drilling be located?
- Could you refresh us on your strategy for drilled and uncompleted wells?
- How would you describe the state of the Delaware Basin infrastructure, especially centered around natural gas and NGL? Any concern about long-haul natural gas pipelines?
- Do you have any interest in looking at the production blocks that Mexico has been putting up?
- A couple years ago you guys made it a focus to develop Fort Lupton and some of the more populated areas. Is this still going on?
- Do you see a difference in capital efficiency between rural and urban areas?
- Could you comment on the sand intensity a year ago versus today and the results you are seeing with that?
- A lot of operators have seen a lot of improvement by going to higher sand concentrations. Is there a specific reason that the Niobrara is different?
- In the Delaware Basin, could you comment on the completions and how that has progressed over the last year or so.
- You mentioned that you would like to keep deepwater production flat or slightly up. How much CAPEX will you need to make that happen?
- Do the offshore exploration wells you spoke of include appraisal wells
- Any rough feel for the timing of Shenandoah 6?
- Early on, you guys were excited of Shenandoah. Is it still possible that there are two facilities?
- Could you talk about how offshore costs have come down?
- When does the budget cycle finish, and how does that tie in to the pricing and the obvious correlation with oil and gas prices?
- Could you review hedging philosophy and where you are now?
You can listen to Anadarko’s presentation by clicking here.
For the company’s second quarter results, click here.
Anadarko Petroleum (ticker: APC) is an exploration and production company headquartered in The Woodlands, Texas. Anadarko has operations in the United States, Gulf of Mexico, Africa, South America, and New Zealand. As of December 31, 2015, the company had approximately 2.1 BBOE of proved reserves. In Q2 2016, the company’s sales volumes totaled 72 million BOE.
Anadarko Operations and Assets
Anadarko’s 2016 capital budget is primarily focused on the Delaware Basin and the DJ Basin. In Q1 2016, Anadarko drilled 26 wells in the DJ Basin and operated an average of two rigs. Wattenberg field sales volumes increased by approximately 5% year over year and drilling costs continued to improve to $59 per foot, representing a 30% decline since Q2 2015 and a 13% reduction from Q1 2016.
Anadarko has closed on monetizations of various assets for more than $2.5 billion to date. The company has projected a target of up to $3.5 billion in monetizations during 2016. Anadarko has retired $3 billion of near-term maturities from debt issued in the first quarter. The asset monetization program will be used to retire debt. Additional information about Anadarko’s operations can be found here in the Q2 2016 operations report.
Anadarko has reduced its 2016 capital budget by almost 50% compared to 2015, which the company expects will produce volumes that are roughly flat year over year.
Financial Overview
Anadarko realized a net loss in Q2 2016 of $692 million ($1.36 per share). Cash flow from operating activities in Q2 2016 was $1.2 billion. Earlier this year, Anadarko cut its dividend 81%, which the company believes will save $450 million per year. The company has issued $3 billion of fixed income securities in 2016, which was used to refinance debt due in 2016 and part of the company’s debt for 2017. Anadarko engaged in workforce reduction in the first quarter to further lower costs.
