Independent oil & gas company,
Anadarko Petroleum Corporation
), unveiled its guidance for the first quarter and full year
2014. Driven by the addition of new facilities and proliferation
of exploration activities, Anadarko lifted its capital
expenditure (capex) plans from 2013 levels.
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Total Capex Scheme
Excluding investments related to
Western Gas Partners, LP
), a subsidiary of Anadarko, total capex for the first quarter of
2014 is expected in a range of $2.4 billion to $2.6 billion. For
full year, capital investments are expected in the band of $8.1
billion to $8.5 billion.
The lion's share of the projected expenses (70%) will be utilized
for oil production activities. Of the balance, 15%, 5% and 10%
will be allocated to several programs under Liquids Rich, Dry
Natural Gas and Other operations, respectively.
Production & Sales Expectations
By tactical use of its capital investments, Anadarko expects to
add 40,000 barrels of oil per day to its production portfolio,
reflecting an upside of 6% - 7% year over year.
Total sales volume for the first quarter is expected in the range
of 69-71 million barrels of oil equivalent (MMBoe) and, for 2014,
the projected band is 290-294 MMBoe.
Upside in the Sectors
Total sales volume (excluding the divestiture of Pinedale/Jonah
assets) is expected to move up by more than 10% to 625, 000
barrels of oil equivalent per day (Boe) for 2014. Potential
drivers include liquids-rich plays like the Eagle Ford Shale
development in South Texas, Wattenberg Horizontal program in
Colorado and the Wolfcamp Shale in West Texas and the East
Texas/North Louisiana area.
Gulf of Mexico:
In less than three years of sanction, the Lucius development is
set to produce 80,000 Boe starting from the second half of 2014.
In addition, Anadarko's Heidelberg development is nearly 75%
complete and is scheduled to drill first oil in 2016.
Anadarko anticipates a 30% year-over-year increase in sales from
the El Merk project in Algeria in 2014. Thanks to Anadarko's
fruitful 2013 appraisal and exploration activities, the company
raised its recoverable natural gas resources in Offshore Area 1,
Mozambique to a range of 45-70 trillion cubic feet (Tcf) from the
previous expectation of 35-65 Tcf.
For the first quarter, the company expects general and
administrative expenses in the range of $280-$300 million and
exploration expenses in the range of $175-$205 million. Interest
expense for the quarter is expected in the band of $180-$185
Yearly expectation for general and administrative expenses lies
in the range of $1.2-$1.3 billion, higher than $1.1 billion
incurred in 2013. Exploration expense is expected to range from
$950-$1,100 million as against $1.3 billion incurred in 2013. The
2014 guidance for interest expense is in the range of $730-$740
million, compared with $686 million reported in 2013.
Anadarko Petroleum currently carries a Zacks Rank #3 (Hold).
Other better performing oil & gas stocks include
Range Resources Corp.
Warren Resources Inc.
). Both the stocks sport a Zacks Rank #1 (Strong Buy).