July 30 (Bloomberg) -- Anadarko Petroleum Corp., the global oil and gas producer that’s seeking to recover from almost $10 billion in legal settlement costs since 2011, raised growth forecasts as output increased to a record.
Spurred by success in U.S. drilling prospects, Anadarko boosted its 2014 production estimate by more than 13,000 barrels a day. Output in the Rocky Mountains, one of the company’s flagship areas, rose nearly 60 percent in the second quarter to the equivalent of 169,000 barrels of oil and natural gas a day, The Woodlands, Texas-based company said yesterday in a statement. Sales rose 27 percent to $4.4 billion.
“The growth that they delivered from the Rockies was phenomenal,” said James Sullivan, an analyst at Alembic Global Advisors, who rates the stock the equivalent of buy and doesn’t own shares. ’’They are one of the leaders of that area.’’
Drilling prospects are soaring in Colorado as new pipelines and processing facilities allowed Anadarko to increase oil production there by about 30 percent in two consecutive quarters, Sullivan said.
Net income in the second quarter was $227 million, or 45 cents a share, down from $929 million, or $1.83, a year earlier, according to the statement. Excluding one-time items, per-share earnings of $1.32 exceeded the $1.30 average of 31 analysts’ estimates compiled by Bloomberg. Shares rose 1.5 percent to $109.23 yesterday.
Chairman and Chief Executive Officer Al Walker is spending as much as $8.8 billion this year developing projects from Colorado to Mozambique. Anadarko plugged and abandoned its Bimini exploration well in the Gulf of Mexico, and its Deep Nansen prospect was a dry hole. The latter was worth up to $2.40 a share to Anadarko, according to Tudor Pickering Holt & Co.
Anadarko owns more than 8 million acres of mineral rights in the Rocky Mountains and royalty income reached $385 million in the first half of this year, a pace that would exceed 2013 proceeds by 14 percent. The company is likely to seek a sale of rights to future royalties that could be worth $6.14 billion, cash that would be used to buy back as many as 10 percent of shares, Arun Jayaram, an analyst at Credit Suisse AG, said July 28 in a note to investors.
In 2011, Anadarko paid BP Plc $4 billion to settle all claims over the 2010 blowout at the Gulf of Mexico Macondo well, which caused the largest offshore oil spill in U.S. history. The company owned a 25 percent stake in the well. Anadarko agreed in April to pay the U.S. Justice Department $5.15 billion to settle a pollution litigation case.
(Anadarko scheduled an earnings conference call today at 9 a.m. New York time. To listen, go to EVTS <GO>.)
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