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Anadarko Petroleum quarterly
net falls 76 percent Asset write-down brings 2001 into red; $1 billion reduction in value attributed to internal accounting error Allen Baker PNA Contributing Writer
Sharply lower prices slashed profits at Anadarko Petroleum Corp. to $109 million for the fourth quarter, down 76 percent from $457 million for the same quarter of 2000.
For the year, Houston-based Anadarko posted a loss of $188 million, compared with earnings of $796 million in 2000. That came after the company announced in late January that it was restating third quarter results with a $1.08 billion reduction in the value of its reserves after discovering an internal accounting error. The company in that quarter had already chopped the carrying value of gas properties in Canada and South America by $483 million.
The January restatement actually boosted net profits in the fourth quarter by $32 million because it reduced depletion and depreciation charges, The Wall Street Journal reported.
Factoring out “non-cash property impairments,” or changes in the value of its reserves, Anadarko’s 2001 earnings rose 68 percent to $1.39 billion, the company said.
Natural gas volumes rose to 1,863 billion cubic feet daily, a gain of 11 percent from the prior year. That gas brought an average of $2.59 per thousand cubic feet, exactly half the $5.18 Anadarko received for gas a year earlier. Liquids production up Liquids production rose 9 percent to 175,000 barrels daily. Liquids brought an average of $16.39, down 36 percent from $25.45 a year earlier.
The lower prices cut revenues for the quarter by nearly a billion dollars, to $1.38 billion from $2.35 billion. For the year, revenues rose 52 percent to $8.37 billion from $5.5 billion.
Anadarko said it was changing strategies as a result of the lower prices, deferring some drilling projects in the last half of 2001 and cutting the capital budget for 2002.
“We built an inventory of exploration prospects and development drilling locations so we’ll be well-positioned to capitalize on the next market upturn,” said Anadarko president John N. Seitz in a statement included in the earnings report. “At the first sign of demand picking up and process recovering, we plan to accelerate our drilling activity, just as we did in 1999, in the last price cycle.”
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