Low natural gas prices trigger slide in Anadarko earnings; but production is rising, company says

Steve Sutherlin, PNA managing editor

Lower natural gas prices deflated reported net income at Anadarko Petroleum Corp. in second quarter 2002, to $239 million or 93 cents per share versus $401 million or $1.50 per share for second quarter 2001. Higher oil prices and production partially offset gas results however, and the company expects gas production to rise.

John Seitz, Anadarko president and chief executive officer, said in a July 25 statement the company has had “several nice discoveries,” that will boost production by at least 5 percent in 2003.

Cash flow from operations totaled $561 million or $2.17 per share in second quarter 2002, compared with $1.05 billion or $3.91 per share in second quarter 2001, the company said.

Anadarko said its combined natural gas, crude oil and natural gas liquids volumes for the second quarter totaled 546,000 barrels per day, down from 570,000 bpd the second quarter of 2001.

Second quarter natural gas production was 1.79 billion cubic feet per day, compared with 2.02 bcf per day in second quarter 2001. Natural gas prices fell to $2.94 per thousand cubic feet from $4.49 per mcf a year earlier.

Oil volumes rose by 13,000 bpd to 205,000 bpd, mainly due to additional production capacity in Algeria, the company said. Oil prices rose to $22.38 per barrel in the second quarter of 2002, versus $21.38 per barrel for the same period in 2001.

Anadarko said it has hedged 10 percent of its natural gas production and an average of 35 percent of its oil production for the third and fourth quarters.