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Anadarko Profit Exceeds Estimates on Increased Production

Anadarko Petroleum Corp. (APC), the second- biggest U.S. independent oil and natural gas producer by market value, reported fourth-quarter profit that exceeded analysts’ estimates and output that surpassed its own forecast.

Net income was $203 million, or 40 cents a share, compared with a net loss of $358 million, or 72 cents a share, a year earlier, The Woodlands, Texas-based company said in a statement yesterday. Excluding one-time items such as writing down the value of certain assets, per-share profit was 20 cents more than the 71-cent average of 28 estimates compiled by Bloomberg.

Fourth-quarter sales volumes rose 8.5 percent from a year earlier to the equivalent of 741,000 barrels of oil a day. That exceeded the company’s Oct. 29 forecast for daily sales of 711,000 to 730,000 barrels during the quarter. Output surged in the Wattenberg field of Colorado, Eagle Ford Shale in Texas and Marcellus Shale of Pennsylvania.

“They’ve been surprising to the upside regularly now,” said James Sullivan, an analyst at Alembic Global Advisors in New York who has an overweight, or buy, rating on Anadarko shares and owns none. “It’s a good quarter, it’s kind of an on pace quarter.”

The company’s proved reserves totaled the equivalent of an estimated 2.56 billion barrels of oil at the end of 2012, according to the statement. That’s up from 2.54 billion barrels at the close of 2011. The company said about 46 percent of its proved reserves were liquids at the end of 2012, with 54 percent being natural gas.

Africa Exploration

Anadarko remains on track to meet a goal of having 3 billion barrels of oil equivalent of proved reserves by the end of 2014, Chief Executive Officer Al Walker said in the statement.

Anadarko is exploring in locations including the Gulf of Mexico and off the coast of Africa. The company said it has drilled a development well at its Lucius project in the Gulf, finding 910 net feet of so-called oil pay, which Sullivan called a “pretty good result.”

In Algeria, Anadarko said it has increased security and also expects to see initial oil output in the first quarter from a facility at the El Merk complex. The company had some unsuccessful wells outside of the U.S., including Barracuda-1 off the coast of Mozambique, according to an operations report on its website.

The company said in December it had agreed to work with Eni SpA (ENI) to build a liquefied natural gas plant in Mozambique to possibly begin exporting fuel in 2018.

Mozambique Sale

Anadarko is in the process of marketing a 10 percent working interest in an area off the coast of Mozambique, which would reduce its holding to 26.5 percent from 36.5 percent, Walker said on a conference call with analysts and investors today. The company may look to have a transaction by the time of a final investment decision expected around the end of 2013, Chief Financial Officer Bob Gwin said on the call.

“Our view was to finally formalize the process, invite some people in that we thought could in fact be good partners for us,” Walker said. Anadarko is early in a “quiet marketing” of the stake, he said.

The company also said it may look to sell Brazilian assets, as well as a stake in its Heidelberg project in the Gulf of Mexico.

The company’s average sales price for crude dropped to $97.74 a barrel in the fourth quarter from $104.82 a year earlier, while its average gas price declined to $3.28 per thousand cubic feet from $3.43 a year earlier.

Anadarko’s revenue fell 11 percent from a year earlier to $3.41 billion in the fourth quarter.

Anadarko rose 2.6 percent to $82.60 at the close in New York.

ConocoPhillips (COP) is the largest U.S. independent oil and gas producer by market value. Independent oil companies don’t own refineries or a chemical business.

To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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