Exhibit 99
Anadarko Announces Strong Third Quarter Results
HOUSTON--(BUSINESS WIRE)--Oct. 28, 2005--Anadarko Petroleum Corporation
(NYSE:APC) today announced third quarter 2005 net income available to
common shareholders of $596 million, or $2.51 per share (diluted), on
revenues of $1.76 billion.
Quarterly results include $141 million ($90 million after-tax) of
unrealized losses on derivatives, partially offset by a $29 million
($19 million after-tax) unrealized gain related to the company's firm
transportation keep-whole agreement. The quarter also included a $13
million (after-tax) charge related to the disposition of Block 30 in
Oman, which was part of the restructuring plan announced in June 2004.
Cash flow from operating activities was $1.14 billion in the third
quarter, and discretionary cash flow totaled $1.01 billion.(1)
"Anadarko's results were strong, even with the impact of several
non-cash items and unusual events, not the least of which were two
100-year storms in one quarter," said Anadarko President and CEO Jim
Hackett. "Revenues were up year-over-year and, importantly, we reduced
direct operating costs 26 percent for the same period. As a result, we
were able to expand our cash margins, partly because of higher
commodity prices, but also due to our restructured, more efficient
asset base."
Between the end of the second quarter and Oct. 12, Anadarko
purchased 5.5 million shares to complete the company's stock
repurchase program, which began in June 2004. A total of 28.4 million
shares were purchased under the $2 billion program, at an average cost
of $70.50 per share (including all trading expenses).
Third quarter sales volumes totaled 39 million barrels of oil
equivalent (BOE), or 426,000 BOE per day. Natural gas sales volumes
averaged 1,382 million cubic feet per day, at an average realized
price of $7.15 per thousand cubic feet. Oil sales volumes in the third
quarter averaged 162,000 barrels per day, with an average realized
price of $50.80 per barrel. Natural gas liquids volumes averaged
34,000 barrels per day, at an average realized price of $37.61 per
barrel.
Overall volumes were essentially flat from the second quarter
2005, despite the temporary impact of hurricanes, and were down
year-over-year due to property sales associated with Anadarko's
refocused strategy. Adjusted for these property sales, volumes
increased 8 percent year to date 2005 compared to the prior year.
Offshore Gulf of Mexico, Anadarko's gross volumes of approximately
20,000 BOE per day were shut in for a combined 20 days during the
third quarter because of Hurricanes Katrina and Rita. In total, the
company estimates that combined onshore and offshore weather-related
shut-ins and delays, including those affecting rigs being used to
develop the K2, K2 North and Genghis Khan fields, reduced third
quarter net volumes by 400,000 BOE.
As announced earlier, full-year 2005 net volumes are expected to
be reduced by approximately 2.2 million BOE due to the shut-ins and
ongoing effects of the delayed development activity, including delays
due to offshore loop currents.
"Anadarko continues to make solid progress on its growth strategy
with new initiatives underway internationally and in the Gulf of
Mexico, where we acted quickly to lock up several new resource
opportunities, as well as a separate decision to secure additional
offshore drilling rigs to carry out our active program over the coming
years," Hackett added. "Our exploration mindset is a differentiating
feature of Anadarko, as we invest over 25% of our capital to carry out
our mission to add new hydrocarbon reserves to meet the world's
increasing needs, as well as provide competitive and sustainable
growth for our shareholders."
THIRD QUARTER 2004
Third quarter 2004 net income available to common shareholders was
$399 million, or $1.58 per share (diluted), on revenues of $1.56
billion. Cash flow from operating activities for the same period was
$992 million, while discretionary cash flow totaled $617 million.(1)
EARNINGS CONFERENCE CALL TODAY AT 9:00 A.M. CDT, 10:00 A.M. EDT
Anadarko will host an earnings conference call today at 9:00 a.m.
Central Daylight Time (10:00 a.m. Eastern Daylight Time) to discuss
third quarter 2005 results and the company's outlook for the remainder
of the year. The dial-in number is 913-981-4900, and the confirmation
number is 130229. For complete instructions on how to actively
participate in the conference call, or to listen to the live audio
webcast or a replay, please refer to www.anadarko.com.
ANADARKO OPERATIONS REPORT
For more details on Anadarko's operations, please refer to the
comprehensive report on third quarter drilling activity. The report
will be available at www.anadarko.com on the Investor Relations page.
FINANCIAL DATA
Seven pages of summary financial data follow, including current
hedge positions and guidance.
Anadarko Petroleum Corporation's mission is to deliver a
competitive and sustainable rate of return to shareholders by
developing, acquiring and exploring for oil and gas resources vital to
the world's health and welfare. As of year-end 2004, the company had
2.37 billion BOE of proved reserves, making it one of the world's
largest independent exploration and production companies. Anadarko's
operational focus in North America extends from the deepwater Gulf of
Mexico, up through the Canadian Rockies and onto the North Slope of
Alaska. Anadarko's international operations are focused on its major
positions in Algeria, Venezuela and Qatar, and exploration or
production operations in several other countries. For more information
about how Anadarko is bringing excellence to the surface, please
visit: www.anadarko.com.
(1) See accompanying table for a reconciliation of GAAP to
non-GAAP financial measures and statement indicating why management
believes the non-GAAP measures are useful information for investors.
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Anadarko believes that its
expectations are based on reasonable assumptions. No assurance,
however, can be given that its goals will be achieved. A number of
factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in
this release. While Anadarko makes these forward-looking statements in
good faith, neither Anadarko nor its management can guarantee that the
anticipated future results will be achieved. See Regulatory Matters
and Additional Factors Affecting Business in the Management's
Discussion and Analysis included in the company's 2004 Annual Report
on Form 10-K.
- -0-
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
Below is a reconciliation of cash provided by operating activities
(GAAP) to discretionary cash flow (non-GAAP) as required under
Regulation G of the Securities Exchange Act of 1934. The company uses
discretionary cash flow to demonstrate the company's ability to
internally fund capital expenditures and to service or incur
additional debt. It is useful in comparisons of oil and gas
exploration and production companies because it excludes fluctuations
in assets and liabilities.
Quarter Ended
September 30
-----------------------------
millions 2005 2004
- ---------------------------------------------------------------------
Cash Flow
- ---------------------------------------------------------------------
Net cash provided by operating
activities $1,144 $992
Add back:
Change in accounts receivable 373 74
Change in accounts payable and
accrued expenses (426) (500)
Change in other items - net (83) 51
- ---------------------------------------------------------------------
Discretionary Cash Flow $1,008 $617
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
------------------- -------------------
$ and shares in millions 2005 2004 2005 2004
- ---------------------------------------------------------------------
Revenues
- ---------------------------------------------------------------------
Gas sales $909 $823 $2,466 $2,438
Oil and condensate sales 752 589 2,052 1,643
Natural gas liquids sales 119 123 333 319
Other sales (24) 27 25 65
- ---------------------------------------------------------------------
Total 1,756 1,562 4,876 4,465
- ---------------------------------------------------------------------
Costs and Expenses
- ---------------------------------------------------------------------
Direct operating 131 177 398 498
Transportation and cost of
product 75 67 217 183
General and administrative 99 98 311 269
Depreciation, depletion and
amortization 334 387 991 1,092
Other taxes 101 86 281 252
Impairments related to oil and
gas properties 13 - 13 9
- ---------------------------------------------------------------------
Total 753 815 2,211 2,303
- ---------------------------------------------------------------------
Operating Income 1,003 747 2,665 2,162
- ---------------------------------------------------------------------
Interest Expense and Other
(Income) Expense
- ---------------------------------------------------------------------
Interest expense 50 131 152 260
Other (income) expense (18) 16 (14) 72
- ---------------------------------------------------------------------
Total 32 147 138 332
- ---------------------------------------------------------------------
Income before Income Taxes 971 600 2,527 1,830
- ---------------------------------------------------------------------
Income Tax Expense 373 199 931 630
- ---------------------------------------------------------------------
Net Income $598 $401 $1,596 $1,200
- ---------------------------------------------------------------------
Preferred Stock Dividends 2 2 4 4
- ---------------------------------------------------------------------
Net Income Available to Common
Stockholders $596 $399 $1,592 $1,196
- ---------------------------------------------------------------------
Per Common Share
- ---------------------------------------------------------------------
Net income - basic $2.53 $1.59 $6.74 $4.76
Net income - diluted $2.51 $1.58 $6.68 $4.72
- ---------------------------------------------------------------------
Average Number of Common
Shares Outstanding - Basic 235 250 236 252
- ---------------------------------------------------------------------
Average Number of Common
Shares Outstanding - Diluted 238 253 238 254
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
------------------- -------------------
$ in millions 2005 2004 2005 2004
- ---------------------------------------------------------------------
Cash Flow from Operating
Activities
- ---------------------------------------------------------------------
Net income $598 $401 $1,596 $1,200
Depreciation, depletion and
amortization 334 387 991 1,092
Deferred income taxes 97 (177) 243 71
Impairments related to oil and
gas properties 13 - 13 9
Other noncash items (34) 6 (10) 78
- ---------------------------------------------------------------------
1,008 617 2,833 2,450
(Increase) decrease in
accounts receivable (373) (74) (249) (232)
Increase (decrease) in
accounts payable and accrued
expenses 426 500 357 658
Other items - net 83 (51) (66) (119)
- ---------------------------------------------------------------------
Net Cash Provided by Operating
Activities $1,144 $992 $2,875 $2,757
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Capital Expenditures
- ---------------------------------------------------------------------
Capital spending $800 $710 $2,231 $2,060
Capitalized interest 17 20 52 67
Capitalized overhead 37 41 124 127
- ---------------------------------------------------------------------
Total $854 $771 $2,407 $2,254
- ---------------------------------------------------------------------
September 30, December 31, September 30,
2005 2004 2004
- ---------------------------------------------------------------------
Condensed Balance Sheet
- ---------------------------------------------------------------------
Cash and cash equivalents $1,012 $874 $154
Other current assets 1,968 1,628 1,516
Net properties and equipment 17,283 15,913 18,034
Other assets 463 468 440
Goodwill 1,286 1,309 1,395
- ---------------------------------------------------------------------
Total Assets $22,012 $20,192 $21,539
- ---------------------------------------------------------------------
Current liabilities $2,435 $1,993 $2,794
Long-term debt 3,604 3,671 4,120
Other long-term liabilities 5,399 5,243 5,180
Stockholders' equity 10,574 9,285 9,445
- ---------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $22,012 $20,192 $21,539
- ---------------------------------------------------------------------
Capitalization
- ---------------------------------------------------------------------
Total debt $3,676 $3,840 $4,484
Stockholders' equity 10,574 9,285 9,445
- ---------------------------------------------------------------------
Total $14,250 $13,125 $13,929
- ---------------------------------------------------------------------
Capitalization Ratios
- ---------------------------------------------------------------------
Total debt 26% 29% 32%
Stockholders' equity 74% 71% 68%
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Volumes and Prices September 30 September 30
----------------- ------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------
Natural Gas
- ----------------------------------------------------------------------
United States
- ----------------------------------------------------------------------
Volumes, billion cubic feet 101 132 311 378
Average daily volumes, million
cubic feet per day 1,098 1,428 1,142 1,382
Price per thousand cubic feet $7.16 $4.96 $6.36 $5.01
- ----------------------------------------------------------------------
Canada
- ----------------------------------------------------------------------
Volumes, billion cubic feet 26 35 77 108
Average daily volumes, million
cubic feet per day 284 385 281 392
Price per thousand cubic feet $7.08 $4.81 $6.28 $5.03
- ----------------------------------------------------------------------
Total
- ----------------------------------------------------------------------
Volumes, billion cubic feet 127 167 388 486
Average daily volumes, million
cubic feet per day 1,382 1,813 1,423 1,774
Price per thousand cubic feet $7.15 $4.93 $6.35 $5.01
- ----------------------------------------------------------------------
Crude Oil and Condensate
- ----------------------------------------------------------------------
United States
- ----------------------------------------------------------------------
Volumes, million barrels 6 8 18 24
Average daily volumes, thousand
barrels per day 68 92 67 88
Price per barrel $42.84 $31.83 $41.76 $30.94
- ----------------------------------------------------------------------
Canada
- ----------------------------------------------------------------------
Volumes, million barrels 1 1 2 4
Average daily volumes, thousand
barrels per day 8 14 8 14
Price per barrel $53.97 $38.86 $48.89 $35.63
- ----------------------------------------------------------------------
Algeria
- ----------------------------------------------------------------------
Volumes, million barrels 6 6 18 18
Average daily volumes, thousand
barrels per day 65 63 66 64
Price per barrel $61.18 $38.37 $53.58 $34.21
- ----------------------------------------------------------------------
Other International
- ----------------------------------------------------------------------
Volumes, million barrels 2 2 6 6
Average daily volumes, thousand
barrels per day 21 17 21 21
Price per barrel $42.31 $30.20 $37.70 $27.06
- ----------------------------------------------------------------------
Total
- ----------------------------------------------------------------------
Volumes, million barrels 15 17 44 52
Average daily volumes, thousand
barrels per day 162 186 162 187
Price per barrel $50.80 $34.42 $46.40 $31.98
- ----------------------------------------------------------------------
Natural Gas Liquids
- ----------------------------------------------------------------------
Total
- ----------------------------------------------------------------------
Volumes, million barrels 3 4 10 12
Average daily volumes, thousand
barrels per day 34 46 37 45
Price per barrel $37.61 $29.16 $33.07 $25.90
- ----------------------------------------------------------------------
Total Barrels of Oil Equivalent
(BOE)
- ----------------------------------------------------------------------
Volumes, million BOE 39 49 119 145
Average daily volumes, thousand
BOE per day 426 534 436 528
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Commodity Hedge Position
As of September 30, 2005
Natural Gas
2- Way Collars 3- Way Collars
------------------------- ---------------------------------
Pur-
Sold chased
Volume Floor Ceiling Volume Floor Floor Ceiling
mmBtu/day $/mmBtu $/mmBtu mmBtu/day $/mmBtu $/mmBtu $/mmBtu
------------------------- ---------------------------------
United
States
------------------------- ---------------------------------
Remainder
of 2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2006 10.0 $4.00 $5.88 - $- $- $-
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2007 6.0 $4.00 $6.02 - $- $- $-
------------------------- ---------------------------------
------------------------- ---------------------------------
-------------------
Fixed and
Physical Contracts
-------------------
Volume Price
Canada mmBtu/day $/mmBtu
-------------------
-------------------
Remainder
of 2005 18.0 $2.95
-------------------
-------------------
Total
Year
2006 10.9 $2.87
-------------------
-------------------
Total
Year
2007 4.5 $2.83
-------------------
-------------------
The underlier for all prices is Nymex Henry Hub.
- ----------------------------------------------------------------------
Crude Oil
2- Way Collars 3- Way Collars
------------------------- ---------------------------------
Pur-
Sold chased
Volume Floor Ceiling Volume Floor Floor Ceiling
bbl/day $/bbl $/bbl bbl/day $/bbl $/bbl $/bbl
------------------------- ---------------------------------
United
States
------------------------- ---------------------------------
Remainder
of 2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2006 822 $22.00 $26.32 - $- $- $-
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2007 542 $22.00 $26.32 7,000 $35.00 $50.00 $88.08
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2008 - $- $- 7,000 $35.00 $50.00 $86.26
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2009 - $- $- 5,000 $35.00 $50.00 $85.58
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2010 - $- $- 6,000 $35.00 $50.00 $85.65
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2011 - $- $- 3,000 $35.00 $50.00 $86.00
------------------------- ---------------------------------
Algeria
------------------------- ---------------------------------
Total
Year
2008 - $- $- 7,000 $33.54 $48.54 $83.83
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2009 - $- $- 7,000 $33.54 $48.54 $83.53
------------------------- ---------------------------------
------------------------- ---------------------------------
Total
Year
2010 - $- $- 3,000 $33.75 $48.78 $84.20
------------------------- ---------------------------------
------------------------- ---------------------------------
The underlier for United States prices is Nymex WTI Cushing. The
underlier for Algerian prices is Brent Dated.
Anadarko Petroleum Corporation
Financial and Operating Guidance
As of October 28, 2005
Fourth Quarter Total Year
2005 Forecast 2005 Forecast
------------------ -------------------
Units Units
------------------ -------------------
Total Sales (MM BOE) 39 - 41 158 - 160
Crude Oil (MBbl/d): 159 - 169 161 - 164
United States 70 - 74 68 - 69
Canada 6 - 7 7 - 7
Algeria 53 - 63 63 - 66
Other International 23 - 25 22 - 22
Natural Gas (MMcf/d): 1,350 - 1,390 1,405 - 1,415
United States 1,070 - 1,100 1,124 - 1,132
Canada 275 - 295 279 - 284
Natural Gas Liquids (MBbl/d): 34 - 37 36 - 38
United States 33 - 35 35 - 36
Canada 1 - 2 1 - 2
- ----------------------------------------------------------------------
$/ Unit $/ Unit
------------------ -------------------
Price Differentials vs NYMEX
(w/o hedges)
Crude Oil ($/Bbl): (5.50) - (7.50) (5.40) - (5.90)
United States (4.00) - (6.00) (4.75) - (5.25)
Canada (8.00) - (11.00) (7.55) - (8.25)
Algeria (2.50) - (4.00) (1.85) - (2.25)
Other International (16.00) - (20.00) (17.20) - (18.30)
Natural Gas ($/Mcf): (1.70) - (2.10) (0.90) - (1.00)
United States (1.70) - (2.00) (0.90) - (1.00)
Canada (1.75) - (2.50) (1.00) - (1.20)
- ----------------------------------------------------------------------
$MM $MM
------------------ -------------------
Other Revenues:
Marketing 34 - 40 25 - 32
Minerals and Other 10 - 14 44 - 48
- ----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
------------------ -------------------
Direct Operating 3.45 - 3.65 3.35 - 3.45
Transportation and Cost of
Product 1.80 - 1.95 1.82 - 1.85
Depreciation, Depletion and
Amortization 8.30 - 8.60 8.32 - 8.40
Production Taxes (% of
Revenue) 5.3% - 5.8% 5.5% - 5.7%
$MM $MM
------------------ -------------------
General and Administrative 110 - 120 420 - 430
Impairments Related to Oil
and Gas Properties - - 30 13 - 43
Interest Expense 48 - 50 200 - 202
Other (Income) Expense (5) - 5 (13) - (3)
Federal Tax Rate 34% - 36% 35% - 36%
Deferred Taxes (% of Total
Taxes) 35% - 60% 30% - 38%
- ----------------------------------------------------------------------
Avg. Shares Outstanding (MM)
Basic 232 - 234 235 - 236
Diluted 234 - 236 237 - 238
$MM $MM
------------------ -------------------
Capital Investment 700 - 900 3,100 - 3,300
Capital Projects 636 - 830 2,860 - 3,054
Capitalized Direct Expenses 48 - 52 172 - 176
Capitalized Interest 16 - 18 68 - 70
CONTACT: Anadarko Petroleum Corporation, Houston
Media Contacts:
Teresa Wong, 832-636-1203
teresa_wong@anadarko.com
or
Margaret Cooper, 832-636-8355
margaret_cooper@anadarko.com
or
Investor Contacts:
David Larson, 832-636-3265
david_larson@anadarko.com
or
Stewart Lawrence, 832-636-3326
stewart_lawrence@anadarko.com