Oil and gas production in the United States is in full swing.
The U.S. Energy Information Administration states that domestic
energy production is hitting levels not seen in decades. Natural
gas production is on the rise thanks to abundant supplies that
are now being tapped into effectively due to advancements in
drilling technology, such as hydraulic fracturing. As far as oil
is concerned, in its monthly short-term energy outlook, the EIA
found that in July oil production hit its highest level in 27
This is a gold mine for companies like
that explore for and produce oil and gas. Anadarko has an
advantageous position because its assets are situated in some of
the highest-producing oil and gas fields across the country.
These assets are producing record results for Anadarko.
Wattenberg leads the way
The Wattenberg is a large natural gas field located in Colorado's
Denver Basin. This field achieved a record 169,000 barrels of oil
equivalent per day last quarter, which represented a nearly 60%
increase in year-over-year production there. This was due to
Anadarko's focus on higher-margin liquids production, thanks to
the continued success of the company's horizontal drilling
In all, Anadarko delivered record average daily production, of
848,000 barrels of oil equivalent per day. Adjusted earnings per
share rose to $1.32, representing 25% growth year over year.
Thanks to booming production of oil and gas across the United
States, a number of exploration and production companies are
doing well. Rising production and profitability are a recurring
theme, although Anadarko stands out as an above-average
For instance, peer in the space
had a solid quarter as well. Its adjusted earnings per
share rose 16% in the most recent quarter, driven by successful
results in its own core assets.
Anadarko growing overseas
One unique aspect of Anadarko's business is that it's gearing up
internationally, while others in the industry are shying away
from operating outside the United States. Some exploration and
production companies view international operations as too risky,
due to continued geopolitical turmoil and repeated supply
disruptions over the past year.
For these reasons,
sold considerable interests in Kazakhstan, Algeria, and Nigeria
last year. Its divestments totaled $7 billion, which the company
said would be reinvested back into U.S. oil fields.
Moreover, Devon Energy's operations are almost entirely
comprised of U.S.-based assets. It holds considerable positions
in the Permian Basin and the Eagle Ford shale.
By contrast, Anadarko is ramping up its efforts in Algeria as
well as Ghana, which may be a risky bet. But these efforts are
paying off. Anadarko achieved oil production milestones at its El
Merk development in Algeria. Production there eclipsed 150,000
barrels per day recently. At the Jubilee field offshore Ghana,
cumulative oil production reached 100 million barrels last
Clearly, Anadarko isn't afraid to keep operating in
international markets, and the results are working in the
Going forward, management expects strong performance to
continue. The company increased the midpoint of its 2014 sales
volume guidance by 5 million barrels of oil equivalent.
Anadarko earnings show the strength of its assets
Anadarko has a diverse asset portfolio, which produced record
results last quarter. Production and earnings soared, thanks to
continued success at its Wattenberg field, as well as its
promising international operations in Algeria and Ghana.
In turn, the company is rewarding shareholders. After Anadarko
released its quarterly earnings, the company announced a 50%
dividend increase. Management is clearly committed to sharing its
success with investors, and that's a great sign.
Anadarko has a high-quality portfolio of diverse assets, and
its recent earnings proved that it is a company taking full
advantage of booming oil and gas production.
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Anadarko Petroleum Earnings: Diverse Assets Yield
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