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Anadarko shows 87 percent lower profit; low oil and gas price offsets production gain Last summer company began scaling back natural gas development drilling and focusing more on exploration, higher-margin oil projects Allen Baker PNA Contributing Writer
Anadarko Petroleum Corp. reported sharply lower profits for the first quarter as gas prices slid compared with the lofty levels a year earlier.
Net income after preferred dividends was $88 million, down 87 percent from $656 million in the same quarter of 2001. Profits were $109 million in the fourth quarter.
“Anadarko’s financial results were affected by dramatically lower energy prices,” said John Seitz, president and chief executive officer. “In fact, natural gas prices dropped 68 percent, and crude oil prices decreased 15 percent year-over-year.”
The company collected an average of $2.17 for each thousand cubic feet of gas in the quarter, compared with $6.79 a year ago. A barrel of oil brought in $20.12 down from $25.12
With the lower prices, Houston-based Anadarko is scaling back exploration.
Anadarko is running 35 operated rigs and 21 non-operated rigs in North America, roughly half the 106 that were drilling in the same period in 2001.
Capital spending was $732 million for the quarter, up 28 percent from a year ago, but company officials plan to slow spending in the second quarter to meet the 2002 capital budget of $2 billion.
So far, however, production is holding up on the back of increased oil flow, even though North American gas volume slipped 1 percent on declines in the United States.
Sales volumes were 553,000 barrels of oil equivalent daily, up 6 percent from
525,000 a year ago on new production from Algeria, Anadarko’s share of the Alpine field on Alaska’s North Slope, and new flows from the acquisition of Berkley Petroleum in Canada in March of 2001.
But the revenue picture for gas-dominant Anadarko shows gas sales brought in just $353 million in the quarter, down from $1,114 million a year ago. Oil sales were nearly flat in dollar terms — $350 million versus $361 million a year earlier – even though production rose to 212,000 barrels daily up 14 percent from 186,000 barrels a year ago.
“We began making adjustments to our portfolio last summer to scale back natural gas development drilling and to focus more on exploration and higher-margin oil projects,’’ Seitz said.
Revenues for the quarter still slid 54 percent to $1.37 billion from $3.01 billion in 2001’s first quarter. Anadarko had $1.38 billion in revenues for the fourth quarter.
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