Anadarko Beats Analysts’ Estimates, Raises Sales Forecast

Anadarko Petroleum Corp., the second-largest U.S. independent oil and natural-gas producer by market value, boosted its 2012 sales volume forecast and posted adjusted quarterly profit that exceeded analysts’ estimates.

The company reported a second-quarter net loss of $380 million, or 76 cents a share, from a profit of $544 million, or $1.08, a year earlier, The Woodlands, Texas-based company said in a statement yesterday. Excluding a reduction in the value of coalbed methane properties and other one-time items, per-share profit was 8 cents more than the 77-cent average of 30 analysts’ estimates compiled by Bloomberg.

Anadarko’s sales volume climbed 8.3 percent from a year earlier to the equivalent of 742,000 barrels of oil a day, the company said. The record sales were driven by increased production in Colorado and the Gulf of Mexico and higher volumes from Algeria. Anadarko also increased the midpoint of its full-year sales forecast by 3 million barrels to a range of 261 million to 265 million barrels.

“They did very well,” Fadel Gheit, a New York-based analyst at Oppenheimer & Co., said in a telephone interview today. “Very strong performance in all aspects of their business,” said Gheit, who doesn’t own Anadarko shares and expects them to perform better than the market.

Gas Prices

Anadarko recorded a $628 million after-tax charge in the second quarter that was mostly related to the declining value of coalbed methane properties because of lower gas prices. Gas futures traded in New York averaged $2.354 per million British thermal units, a decline of 46 percent as the use of new drilling techniques created a glut of the furnace fuel.

Second-quarter revenue declined 12 percent from a year earlier to $3.2 billion.

Brent crude futures, a global benchmark, dropped 7 percent from a year earlier to average $108.76 in the second quarter. Anadarko is looking to U.S. onshore formations, including in Colorado and Texas, to help boost output of liquids such as oil. The company is also exploring off the coast of Africa, and in the Gulf of Mexico.

Anadarko will consider further transactions after announcing about $1 billion of joint ventures in Wyoming and the Gulf of Mexico, President and Chief Executive Officer Al Walker said on a conference call with analysts and investors today.

Mozambique, Brazil

“A lot of people” have approached the company about possibly buying a stake in its gas assets off the coast of Mozambique, Walker said. Mozambique is on a list of transactions to consider, he said.

“Once we find the right deal that we think makes sense for us and our shareholders, we’ll be inclined to pursue something if we in fact can indeed find that,” Walker said.

Anadarko remains in a “holding pattern” on the possible sale of assets in Brazil as it assesses how a possible unitization may affect the value, Chief Financial Officer Bob Gwin said on today’s conference call. Brazil is still on the list of expected future divestitures, he said.

In the Gulf of Mexico, the company’s partnership increased the estimated recoverable resources at the Vito prospect to more than 300 million barrels of oil equivalent from more than 200 million barrels.

Tronox Case

Anadarko continues to seek a “reasonable resolution” related to a lawsuit by Tronox Inc., Bobby Reeves, the company’s general counsel, said on today’s conference call. The company plans to issue its 10-Q regulatory filing on or by Aug. 9 and will include information on the case, Reeves said.

Anadarko is defending itself against a $25 billion lawsuit by the U.S. and Tronox over environmental and tort claims related to Tronox’s 2005 spinoff from Kerr-McGee Corp., which Anadarko later acquired.

The case “has created an unfortunate cloud” as misunderstandings have affected the stock price, Walker said today.

The shares fell 3.2 percent to $69.44 at the close in New York. The stock has dropped 9 percent this year.

The stock is behaving as though a Tronox settlement may be near $5 billion, Gheit said. He expects a settlement closer to $2 billion. Anadarko ended the second quarter with about $2.8 billion of cash on hand, according to its earnings statement.

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

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