Anadarko Provides 2014 Guidance - Analyst Blog


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Independent oil & gas company, Anadarko Petroleum Corporation ( APC ), 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.

Total Capex Scheme

Excluding investments related to Western Gas Partners, LP ( WES ), 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

U.S. Onshore: 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.

International: 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.  

Expenditure Guidance

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 million.

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. ( RRC ) and Warren Resources Inc. ( WRES ). Both the stocks sport a Zacks Rank #1 (Strong Buy).

ANADARKO PETROL (APC): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

WESTERN GAS PTR (WES): Free Stock Analysis Report

WARREN RSRCS (WRES): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: APC , RRC , WES , WRES

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