Anadarko Petroleum Corporation outlines its expectations for capital spending for 2002 and offers guidance on 2001 financial and operating results. "Overall, 2001 was a great year for Anadarko," said John N. Seitz, President and Chief Executive Officer of Anadarko. "However, fourth-quarter results will clearly reflect the downturn in the industry. In reaction to these changing market conditions, in July of 2001, we began slowing our drilling program -- which impacted fourth-quarter volumes and will affect 2002 financial and operating results. But the strategies we have in place should also grow shareholder value and enhance the company's ability to achieve double-digit growth in production and reserves in the future. "It's simply the wrong time in the commodity price cycle to build organic production growth. Instead, now is the time to buy back stock, build reserves and build our inventory of drilling locations to take advantage of the next up-turn in oil and gas prices. Anadarko has always acted with a view towards the long-term interest of our shareholders, and these actions are in line with that strategy," Seitz said.
2001 preliminary results are as follows:
- Record annual earnings. Fourth-quarter earnings per share of about 25 cents diluted. Full-year earnings of about $3.25 per share, or about $5.05 per share excluding the third-quarter ceiling test write-down.
- Annual production volumes up more than 75 percent, from 112 million barrels of oil equivalent (BOE) to 199 million BOE in 2001. On a per-share basis, production rose about 30 percent.
- Increased proved reserves about 10 percent with a reserve replacement ratio of better than 2-to-1.
- Finding costs of slightly over $9 per BOE, largely due to reserve revisions and higher service costs.
Anadarko expects to recommend to the Board of Directors a capital spending budget for 2002 of approximately $2 billion, down about 50 percent from 2001 levels. The company expects that actual spending levels could vary considerably depending on commodity prices. The proposed budget would include $500 million for domestic and international exploration.
"Flexibility is the common theme for our 2002 strategic plan. We have a proven record of success with exploration, and we have a great inventory of ready-to-drill locations," Seitz added. "We've shown that we can add value through acquisitions, and we'll continue to buy back APC stock. We could go shopping for oil and gas reserves among the billions of dollars of announced property sales on the market, but right now the best acquisition we see in the market is APC stock. We will continue to buy back our stock at current levels," Seitz said.