Anadarko Petroleum Corporation
(
APC
) posted net earnings from continuing operations of 91 cents per
share in fourth quarter 2012, beating the Zacks Consensus
Estimate of 70 cents by 30% and the year-ago earnings of 85 cents
by 7%.
On a GAAP basis, Anadarko reported earnings of 40 cents in the
fourth quarter versus the year-ago net loss of 72 cents per
share. 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 impairments of 28 per share, 8
cents from changes in tax positions, a 9 cent loss from interest
rate swaps, 10 cents on divesture and 16 cents related to general
partner appreciation rights. The company registered a gain of 20
cents from derivatives.
For the full year 2012, Anadarko earned $4.74 per share, beating
the Zacks Consensus Estimate by 42% and the year-ago earnings by
40.6%.
Revenue
Revenue of $3,410 million in the quarter missed the Zacks
Consensus Estimate by $2 million. The results were down by 11.2%
year over year mainly due to lower realized prices of the product
sold.
Revenue in 2012 was $13,411 million, falling short of the Zacks
Consensus Estimate by $47 million. Total revenue in 2012 was 4%
lower than the prior year.
Proved Reserves
Anadarko replaced 162% of is proved reserve in 2012. The
company's net proved reserves at year-end 2012 totaled 2.56
billion barrel of oil equivalent (BOE), adding about 434 million
barrels of oil equivalent (MMBOE) during 2012.
74% of the estimated proved reserves have been categorized as
proved developed and the balance as proved undeveloped. At
year-end 2012, Anadarko's product mix of proved reserves
consisted of roughly 54% natural gas and 46% liquids.
Operational Highlights
Sales volumes in the quarter improved 8% to 68 million barrels of
oil equivalent (MMBOE) or 741 thousand BOE per day (MBOE/d). The
increase was due to higher sales volume in all product categories
offered by the company. Anadarko's sales volumes in 2012 reached
a record of 268 MMBOE or 732 MBOE per day, up 8.1% from 2011
levels.
Realized prices for crude oil and condensate, natural gas and NGL
averaged $97.74 per barrel (down 6.8%), $3.28 per thousand cubic
feet (down 4.4%) and $38.97 per barrel (down 29.5%),
respectively, in the reported quarter. Oil, natural gas and NGL
realized prices for the full-year came in at $102.35 per barrel
(up 0.1%), $2.68 per thousand cubic feet (down 30.8%) and $40.44
per barrel (down 25%), respectively.
Interest expense during the year was $742 million, down 13% from
$839 million a year ago. The reduction in the year-end debt level
led to the reduction in interest expenses.
Costs incurred in 2012 for oil and natural gas exploration and
development activities were $6.358 billion versus $5.561 billion
in 2011.
Financials
Cash and cash equivalents of the company as of Dec 31, 2012, were
$2.47 billion versus $2.69 billion as of Dec 31, 2011. Despite
repayment of debts, collection of $1 billion associated with the
Algeria exceptional tax resolution boosted the cash balance of
the company.
As of Dec 31, 2012, Anadarko had total outstanding debt of $13.26
billion versus $15.23 billion at the end of the prior year. The
debt-to-capitalization ratio of 39% at year end was lower than
the previous year-end level of 46%. During the year Anadarko
repaid its $2.5 billion revolving credit facility.
Cash flow from operating activities in 2012 was $8.4 billion
compared with $2.5 billion in the prior year.
Capital expenditure of the company during the year was $7.31
billion, reflecting a 11.6% increase from $6.55 spent in 2011.
Other Oil & Gas Company Releases
ConocoPhillips
(
COP
) reported earnings of $1.43 per share in the fourth quarter,
beating the Zacks Consensus Estimate by 2 cents.
Occidental Petroleum Corporation
(
OXY
) reported earnings of $1.83 per share in the fourth quarter,
surpassing the Zacks Consensus Estimate of $1.66 for the
quarter.
Our View
The company was able to register higher sales volume but the
lower realized price of its product totally offset the benefit of
volume growth. The depressed natural gas price environment in
North America had a negative impact on the top line.
Anadarko is working consistently to improve it overall production
portfolio. Besides developing fields in the Gulf of Mexico
region, the company is focusing mainly in reserve rich Africa.
The Mozambique operation is the most prominent among its African
finds. The company also has interest in Kenya, Ghana, Cote d'
Ivoire and Algeria.
A significant portion of Anadarko's offshore operations are based
in Africa. The political instability in various African nations
could lead to disruption of operations. Anadarko has a Zacks Rank
#3 (Hold). We currently have a Zacks Rank # 1 (Strong Buy) on
Cabot Oil and Gas Corporation
(
COG
), which is slated to release its fourth-quarter results on Feb
21, 2013.
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. With a market cap of $40.23 billion, the company
has 4,800 full time employees.
ANADARKO PETROL (APC): Free Stock Analysis
Report
CABOT OIL & GAS (COG): Free Stock Analysis
Report
CONOCOPHILLIPS (COP): Free Stock Analysis
Report
OCCIDENTAL PET (OXY): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research
