Exhibit 99
Anadarko Announces Higher First-Quarter 2006 Earnings
HOUSTON--(BUSINESS WIRE)--April, 27, 2006--Anadarko Petroleum Corporation
(NYSE:APC) today announced first-quarter 2006 net income available to
common shareholders totaled $660 million, or $2.84 per share
(diluted), which represents a 39 percent increase compared with $2.05
per share (diluted) in the 2005 first quarter. Revenues rose 28
percent across the same period to $1.95 billion.
Cash flow from operating activities was $1.22 billion in the first
quarter, and discretionary cash flow totaled $1.19 billion.(1)
"Anadarko's first quarter results were very strong and,
importantly, we continued to make progress on major development
projects that should help us deliver excellent volume growth in the
remaining three quarters of this year and into 2007," Anadarko
Chairman, President and CEO Jim Hackett said.
"Our deepwater Gulf of Mexico operations at the K2 complex
achieved production growth during the first quarter despite mechanical
issues that have since been resolved," Hackett added. "With three
wells on-line and producing a combined gross 37,000 barrels of oil
equivalent per day, we remain on track to have all eight existing K2,
K2 North and Genghis Khan wells producing by year-end. Those high-rate
wells are expected to help us deliver a 15 percent increase in total
daily production from January through December this year, as well as a
full-year 2007 growth rate of more than 9 percent."
Hackett noted, however, that full-year 2006 volume guidance has
been reduced approximately 3 percent to between 161 million barrels of
oil equivalent (BOE) and 166 million BOE, primarily due to the
expected outcome of the company's Venezuelan contract renegotiation,
in addition to the first quarter mechanical issues and resulting
development delays at the K2 complex.
Sales volumes of natural gas, crude oil and natural gas liquids in
the first quarter totaled 38 million BOE, or 419,000 BOE per day.
Natural gas sales volumes averaged 1,366 million cubic feet per day,
at an average price of $7.62 per thousand cubic feet. Oil sales
volumes in the first quarter averaged 157,000 barrels per day, with an
average price of $58.07 per barrel. Natural gas liquids sales volumes
averaged 34,000 barrels per day, at an average price of $39.97 per
barrel.
On a consecutive basis, overall sales volumes were down slightly
from the fourth quarter 2005, largely due to the timing of tanker
loadings in Qatar.
Anadarko has continued to buy back stock under its current $1
billion stock repurchase program that began in November 2005. During
the first quarter, the company repurchased more than 1.2 million
common shares for approximately $118 million, bringing the total since
November to 3.9 million shares for $364 million, at an average cost of
$92.70 per share (including all transaction costs), versus today's
closing stock price of $106.73 per share.
CONFERENCE CALL TOMORROW AT 9 A.M. CDT, 10 A.M. EDT
Anadarko will host a conference call on Friday, April 28, at 9
a.m. Central Daylight Time (10 a.m. Eastern Daylight Time) to discuss
first-quarter results and the company's outlook for 2006. The dial-in
number is 913-981-4900, and the confirmation number is 3198434. 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 first-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
exploring for, acquiring and developing oil and natural gas resources
vital to the world's health and welfare. As of year-end 2005, the
company had 2.45 billion barrels-equivalent 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 western U.S. and Canadian
regions and onto the North Slope of Alaska. Anadarko's international
activities are focused on major positions in North Africa, the Middle
East and Indonesia, as well as 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 such expectations will prove to have been
correct. A number of factors could cause actual results to differ
materially from the projections, anticipated results or other
expectations expressed in this news release. See "Risk Factors" in the
company's 2005 Annual Report on Form 10-K and other public filings,
press releases and discussions with company management. Anadarko
undertakes no obligation to publicly update or revise any
forward-looking statements.
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
March 31
------------------------
millions 2006 2005
- ----------------------------------------------------------------------
Cash Flow
- ----------------------------------------------------------------------
Net cash provided by operating activities $1,222 $936
Add back:
Change in accounts receivable (423) (140)
Change in accounts payable and accrued
expenses 305 44
Change in other items - net 83 55
- ----------------------------------------------------------------------
Discretionary Cash Flow $1,187 $895
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Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
-----------------------
$ and shares in millions 2006 2005
- ----------------------------------------------------------------------
Revenues
- ----------------------------------------------------------------------
Gas sales $936 $739
Oil and condensate sales 824 668
Natural gas liquids sales 121 106
Other sales 73 13
- ----------------------------------------------------------------------
Total 1,954 1,526
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Costs and Expenses
- ----------------------------------------------------------------------
Direct operating 167 130
Transportation and cost of product 89 70
General and administrative 117 102
Depreciation, depletion and amortization 360 324
Other taxes 112 85
Impairments related to oil and gas properties 13 -
- ----------------------------------------------------------------------
Total 858 711
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Operating Income 1,096 815
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Interest Expense and Other (Income) Expense
- ----------------------------------------------------------------------
Interest expense 51 52
Other (income) expense (2) (4)
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Total 49 48
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Income Before Income Taxes 1,047 767
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Income Tax Expense 386 276
- ----------------------------------------------------------------------
Net Income $661 $491
- ----------------------------------------------------------------------
Preferred Stock Dividends 1 1
- ----------------------------------------------------------------------
Net Income Available to Common Stockholders $660 $490
- ----------------------------------------------------------------------
Per Common Share
- ----------------------------------------------------------------------
Net income - basic $2.87 $2.07
Net income - diluted $2.84 $2.05
- ----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Basic 230 237
- ----------------------------------------------------------------------
Average Number of Common Shares Outstanding -
Diluted 232 239
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Summary Financial Information March 31
-------------------------
$ in millions 2006 2005
- ----------------------------------------------------------------------
Cash Flow from Operating Activities
- ----------------------------------------------------------------------
Net income $661 $491
Depreciation, depletion and amortization 360 324
Deferred income taxes 132 73
Impairments related to oil and gas properties 13 -
Other noncash items 21 7
- ----------------------------------------------------------------------
1,187 895
(Increase) decrease in accounts receivable 423 140
Increase (decrease) in accounts payable and
accrued expenses (305) (44)
Other items - net (83) (55)
- ----------------------------------------------------------------------
Net Cash Provided by Operating Activities $1,222 $936
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Capital Expenditures
- ----------------------------------------------------------------------
Capital spending $921 $733
Capitalized interest 15 17
Capitalized overhead 48 45
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Total $984 $795
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March 31, December 31,
2006 2005
- ----------------------------------------------------------------------
Condensed Balance Sheet
- ----------------------------------------------------------------------
Cash and cash equivalents $820 $739
Other current assets 1,715 2,177
Net properties and equipment 18,474 17,862
Other assets 662 614
Goodwill 1,196 1,196
- ----------------------------------------------------------------------
Total Assets $22,867 $22,588
- ----------------------------------------------------------------------
Current liabilities $2,186 $2,403
Long-term debt 3,392 3,555
Other long-term liabilities 5,732 5,579
Stockholders' equity 11,557 11,051
- ----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $22,867 $22,588
- ----------------------------------------------------------------------
Capitalization
- ----------------------------------------------------------------------
Total debt $3,627 $3,677
Stockholders' equity 11,557 11,051
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Total $15,184 $14,728
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Capitalization Ratios
- ----------------------------------------------------------------------
Total debt 24% 25%
Stockholders' equity 76% 75%
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended
Volumes and Prices March 31
---------------------
2006 2005
- ----------------------------------------------------------------------
Natural Gas
- ----------------------------------------------------------------------
United States
- ----------------------------------------------------------------------
Volumes, billion cubic feet 98 107
Average daily volumes, million cubic feet per day 1,091 1,183
Price per thousand cubic feet $7.58 $5.64
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Canada
- ----------------------------------------------------------------------
Volumes, billion cubic feet 25 24
Average daily volumes, million cubic feet per day 275 271
Price per thousand cubic feet $7.78 $5.70
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Total
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Volumes, billion cubic feet 123 131
Average daily volumes, million cubic feet per day 1,366 1,454
Price per thousand cubic feet $7.62 $5.65
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Crude Oil and Condensate
- ----------------------------------------------------------------------
United States
- ----------------------------------------------------------------------
Volumes, million barrels 6 6
Average daily volumes, thousand barrels per day 71 70
Price per barrel $57.24 $38.30
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Canada
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Volumes, million barrels - 1
Average daily volumes, thousand barrels per day 5 7
Price per barrel $47.60 $45.34
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Algeria
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Volumes, million barrels 6 7
Average daily volumes, thousand barrels per day 62 77
Price per barrel $63.11 $48.36
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Other International
- ----------------------------------------------------------------------
Volumes, million barrels 2 2
Average daily volumes, thousand barrels per day 19 23
Price per barrel $48.00 $31.30
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Total
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Volumes, million barrels 14 16
Average daily volumes, thousand barrels per day 157 177
Price per barrel $58.07 $42.04
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Natural Gas Liquids
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Total
- ----------------------------------------------------------------------
Volumes, million barrels 3 3
Average daily volumes, thousand barrels per day 34 36
Price per barrel $39.97 $32.44
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Total Barrels of Oil Equivalent (BOE)
- ----------------------------------------------------------------------
Volumes, million BOE 38 41
Average daily volumes, thousand BOE per day 419 455
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Anadarko Petroleum Corporation
Commodity Hedge Position for 2nd Quarter 2006 and Beyond
As of March 31, 2006
Natural Gas
United States
------------------------------------
2 - Way Collars
------------------------------------
Volume Floor Ceiling
MMMBtu/d $/MMBtu $/MMBtu
------------------------------------
------------------------------------
Remainder Year 2006 10.0 $4.00 $5.88
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------------------------------------
Total Year 2007 6.0 $4.00 $6.02
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------------------------------------
Canada
------------------------
Fixed Price
------------------------
Volume NYMEX Price
MMMBtu/d $/MMBtu
------------------------
------------------------
Remainder Year 2006 10.9 $2.87
------------------------
------------------------
Total Year 2007 4.5 $2.83
------------------------
Crude Oil
United States
--------------------- --------------------------------
2 - Way Collars 3- Way Collars
--------------------- --------------------------------
Volume Floor Ceiling Volume Sold Purchased Ceiling
Floor Floor
Bbl/day $/Bbl $/Bbl Bbl/day $/Bbl $/Bbl $/Bbl
--------------------- --------------------------------
--------------------- --------------------------------
Remainder Year
2006 822 $22.00 $26.32 - $- $- $-
--------------------- --------------------------------
--------------------- --------------------------------
Total Year 2007 542 $22.00 $26.32 15,000 $35.00 $50.00 $89.16
--------------------- --------------------------------
--------------------- --------------------------------
Total Year 2008 12,000 $35.00 $50.00 $87.66
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--------------------------------
Total Year 2009 13,000 $35.00 $50.00 $89.04
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--------------------------------
Total Year 2010 8,000 $35.00 $50.00 $86.49
--------------------------------
--------------------------------
Total Year 2011 3,000 $35.00 $50.00 $86.00
--------------------------------
--------------------------------
Total Year 2012 1,500 $35.00 $50.00 $92.50
--------------------------------
--------------------------------
Algeria
--------------------------------
--------------------------------
Total Year 2008 19,000 $33.51 $48.51 $86.73
--------------------------------
--------------------------------
Total Year 2009 20,000 $33.51 $48.51 $86.62
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--------------------------------
Total Year 2010 10,000 $33.53 $48.53 $86.98
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Anadarko Petroleum Corporation
Financial and Operating Guidance
As of April 27, 2006
2nd Quarter Total Year
2006 Forecast 2006 Forecast
----------------- -----------------
Units Units
----------------- -----------------
Total Sales (MM BOE) 38 - 40 161 - 166
Crude Oil (MBbl/d): 159 - 175 169 - 183
United States 77 - 85 87 - 93
Canada 4 - 6 5 - 6
Algeria 63 - 68 63 - 68
Other International 14 - 17 14 - 16
Natural Gas (MMcf/d): 1,340 - 1,410 1,395 - 1,445
United States 1,070 - 1,130 1,115 - 1,150
Canada 265 - 285 280 - 295
Natural Gas Liquids (MBbl/d): 32 - 36 33 - 37
United States 30 - 33 31 - 34
Canada 2 - 3 2 - 3
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$/ Unit $/ Unit
----------------- -----------------
Price Differentials vs NYMEX (w/o
hedges)
Crude Oil ($/Bbl): (5.00) - (7.00) (5.00) - (7.00)
United States (5.00) - (7.00) (6.00) - (7.00)
Canada (9.00) - (15.00) (11.00) - (13.00)
Algeria (1.50) - (2.50) (1.50) - (2.25)
Other International (12.50) - (15.00) (14.00) - (17.00)
Natural Gas ($/Mcf): (0.75) - (1.50) (1.00) - (1.75)
United States (0.75) - (1.50) (1.00) - (1.75)
Canada (0.90) - (1.50) (1.00) - (1.75)
- ----------------------------------------------------------------------
$MM $MM
----------------- -----------------
Other Revenues:
Marketing 10 - 15 90 - 110
Minerals and Other 10 - 20 70 - 90
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Costs and Expenses:
$ / Boe $ / Boe
----------------- -----------------
Direct Operating 4.15 - 4.30 4.00 - 4.15
Transportation and Cost of
Product 2.00 - 2.40 2.00 - 2.40
Depreciation, Depletion and
Amortization 9.50 - 9.90 9.75 - 9.95
Production Taxes (% of Revenue) 6.3% - 6.7% 5.9% - 6.3%
$MM $MM
----------------- -----------------
General and Administrative 120 - 130 465 - 495
Impairments Related to Oil and
Gas Properties - - - 13 - 13
Interest Expense 50 - 51 195 - 205
Other (Income) Expense (5) - 5 (10) - 10
Federal Tax Rate 34% - 36% 35% - 37%
Deferred Taxes (% of Total
Taxes) 30% - 50% 37% - 40%
- ----------------------------------------------------------------------
Avg. Shares Outstanding (MM) (a)
Basic 228 - 230 229 - 231
Diluted 230 - 232 231 - 233
$MM $MM
----------------- -----------------
Capital Investment 1,050 - 1,150 3,800 - 4,100
Capital Projects 985 - 1,075 3,530 - 3,815
Capitalized Direct Expenses 50 - 55 210 - 220
Capitalized Interest 15 - 20 60 - 65
(a) Does not include effects of the proposed two-for-one stock split.
CONTACT: Anadarko Petroleum Corporation, Houston
MEDIA CONTACT:
Teresa Wong, 832-636-1203
teresa_wong@anadarko.com
or
INVESTOR CONTACTS:
Stewart Lawrence, 832-636-3326
stewart_lawrence@anadarko.com
or
John Colglazier, 832-636-2306
john_colglazier@anadarko.com