Anadarko Petroleum Corporation
(
APC
) posted net earnings from continuing operations of 92 cents per
share for the first quarter of 2012, surpassing the Zacks Consensus
Estimate of 83 cents and earnings of 72 cents per share reported in
the same period last year.
On a GAAP basis, Anadarko reported earnings of $4.28 per share
in the first quarter versus 43 cents per share in the year-ago
quarter. The difference between operating and GAAP earnings during
the quarter was due to the impact of a few one-time items, charges
and gains, during the quarter.
Numbering among the charges were a 2 cent loss from divestiture,
7 cents for impairments, 35 cents of Tronox related contingent
loss, and 1 cent related to the Deepwater Horizon settlement. The
company registered a total gain of 18 cents from derivatives, a 3
cent gain from tax positions and $3.60 from the Algeria exceptional
profits tax settlement.
Revenue
Revenue of $3.45 billion in the quarter exceeded the Zacks
Consensus Estimate of $3.40 billion and the year-ago figure of
$3.25 billion. The year-over-year growth in revenue was mainly due
to a 24.2% rise in oil and condensate revenues.
Operational Highlights
Sales volumes in the quarter improved 3.2% to 64 million barrels
of oil equivalent (MMBOE) or 704 thousand BOE per day (MBOE/d) from
62 MMBOE or 690 MBOE/d in the year-ago quarter. The year-over-year
rise was mainly due to marginal growth in natural gas and oil
and condensate volumes.
The liquids sales averaged 301 MBOE/d, up 5% year over year. The
increase was driven by the company's five major U.S. onshore growth
plays, namely Wattenberg, Eagleford, Greater Natural Buttes, East
Texas HZ and Permian.
Realized prices for crude oil and condensate, natural gas and
NGL averaged $111.07 per barrel (up 17.4%), $2.60 per thousand
cubic feet (down 33.8%) and $47.09 per barrel (down 3.6%),
respectively, in the reported quarter.
Total cost and expenses during the quarter (excluding the
Algeria exceptional profits tax settlement) were $2.54 billion
versus $2.35 billion in the year-ago quarter.
Interest expense during the quarter was $186 million, lower than
$220 million in the year-ago quarter.
Financials
The company continues to have a strong cash position. Cash and
cash equivalents as of March 31, 2012, were $2.95 billion versus
$2.69 billion as of December 31, 2011.
Long-term debt of the company as of March 31, 2012 was $15.4
billion versus $15.06 billion as of December 31, 2011.
Cash flow from operations in the first quarter of 2012 was $1.89
billion versus $1.28 billion in the year-ago quarter.
Capital expenditure during the quarter was $1.79 billion,
increasing marginally from $1.58 billion incurred in the first
quarter of 2011.
Guidance
The company expects its sales volume in the second quarter and
fiscal 2012 to be in the range of 64-66 MMBOE and 258-262 MMBOE,
respectively.
Marketing and gathering margin for the second quarter and fiscal
2012 are expected to be in the band of $55-$75 million and
$240-$280 million, respectively.
Minerals and Others for the second quarter and fiscal 2012 are
expected to be in the band of $35-$45 million and $155-$180
million, respectively.
General and administrative expenses for the second quarter and
fiscal 2012 are expected to be in the band of $290-$310 million and
$1.1-$1.2 billion, respectively.
Capital expenditure of the company for the second quarter and
fiscal 2012 are expected to be in the vicinity of $1.6-$1.75
billion and $6.4-$6.7 billion respectively.
Peer Comparison
ConocoPhillips
(
COP
), which competes with Anadarko Petroleum, announced operating
earnings of $2.02 per share for the first quarter 2012, which
failed to beat the Zacks Consensus Estimate of $2.08 per share.
However, earnings were 20 cents higher than the year-ago
results.
ConocoPhillips's operating revenue of $58.35 billion in the
quarter slipped 2.3% from $59.73 billion reported in the year-ago
quarter.
Our View
Anadarko was able to beat our expectation, riding on higher
sales volumes and better realized price for crude and condensate
sales. Most importantly, all the regions in which company operates
registered year-over-year growth in sales volume, except for Gulf
of Mexico (GoM). Sales volumes in GoM were down due to a fall in
the gas sales volume.
Anadarko continues to improve its overall portfolio gaining from
drilling successes in GoM, Mozambique and Ghana. The company is
also entering into strategic partnerships to develop its exiting
assets. Recently, Anadarko joined hands with
Linn Energy, LLC
(
LINE
) to develop the Salt Creek field in Wyoming's Powder River
Basin.
Despite the positives, depressed natural gas prices are causing
havoc in the oil and gas industry. Besides, the domestic operations
of the company are subject to certain laws and regulations. Failure
or delay in compliance can impact the smooth running of
operations.
Based in The Woodlands, Texas, Anadarko Petroleum is primarily
engaged in the exploration, development, production, gathering,
processing and marketing of natural gas, crude oil, condensate and
NGLs.The company presently retains a short-term Zacks #3 Rank,
which translates into a short-term Hold rating.
ANADARKO PETROL (
APC
): Free Stock Analysis Report
CONOCOPHILLIPS (
COP
): Free Stock Analysis Report
LINN ENERGY LLC (
LINE
): Free Stock Analysis Report
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