Quarterly results include $141 million ($90 million after-tax) of unrealized losses on derivatives, partially offset by a $29 million ($19 million after-tax) unrealized gain related to the company's firm transportation keep-whole agreement. The quarter also included a $13 million (after-tax) charge related to the disposition of Block 30 in Oman, which was part of the restructuring plan announced in June 2004.
Cash flow from operating activities was $1.14 billion in the third quarter, and discretionary cash flow totaled $1.01 billion.(1)
"Anadarko's results were strong, even with the impact of several non-cash items and unusual events, not the least of which were two 100-year storms in one quarter," said Anadarko President and CEO Jim Hackett. "Revenues were up year-over-year and, importantly, we reduced direct operating costs 26 percent for the same period. As a result, we were able to expand our cash margins, partly because of higher commodity prices, but also due to our restructured, more efficient asset base."
Between the end of the second quarter and Oct. 12, Anadarko purchased 5.5 million shares to complete the company's stock repurchase program, which began in June 2004. A total of 28.4 million shares were purchased under the $2 billion program, at an average cost of $70.50 per share (including all trading expenses).
Third quarter sales volumes totaled 39 million barrels of oil equivalent (BOE), or 426,000 BOE per day. Natural gas sales volumes averaged 1,382 million cubic feet per day, at an average realized price of $7.15 per thousand cubic feet. Oil sales volumes in the third quarter averaged 162,000 barrels per day, with an average realized price of $50.80 per barrel. Natural gas liquids volumes averaged 34,000 barrels per day, at an average realized price of $37.61 per barrel.
Overall volumes were essentially flat from the second quarter 2005, despite the temporary impact of hurricanes, and were down year-over-year due to property sales associated with Anadarko's refocused strategy. Adjusted for these property sales, volumes increased 8 percent year to date 2005 compared to the prior year.
Offshore Gulf of Mexico, Anadarko's gross volumes of approximately 20,000 BOE per day were shut in for a combined 20 days during the third quarter because of Hurricanes Katrina and Rita. In total, the company estimates that combined onshore and offshore weather-related shut-ins and delays, including those affecting rigs being used to develop the K2, K2 North and Genghis Khan fields, reduced third quarter net volumes by 400,000 BOE.
As announced earlier, full-year 2005 net volumes are expected to be reduced by approximately 2.2 million BOE due to the shut-ins and ongoing effects of the delayed development activity, including delays due to offshore loop currents.
"Anadarko continues to make solid progress on its growth strategy with new initiatives underway internationally and in the Gulf of Mexico, where we acted quickly to lock up several new resource opportunities, as well as a separate decision to secure additional offshore drilling rigs to carry out our active program over the coming years," Hackett added. "Our exploration mindset is a differentiating feature of Anadarko, as we invest over 25% of our capital to carry out our mission to add new hydrocarbon reserves to meet the world's increasing needs, as well as provide competitive and sustainable growth for our shareholders."
THIRD QUARTER 2004
Third quarter 2004 net income available to common shareholders was $399 million, or $1.58 per share (diluted), on revenues of $1.56 billion. Cash flow from operating activities for the same period was $992 million, while discretionary cash flow totaled $617 million.
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