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Anadarko Petroleum Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 30, 2012 04:58PM
Anadarko Petroleum Corp. (APC) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:Net Income (Loss) Attributable to Common Stockholders For the first quarter of 2012, Anadarkos net income attributable to common stockholders totaled $2.2 billion, or $4.28 per share (diluted), compared to net income attributable to common stockholders of $216 million, or $0.43 per share (diluted) for the first quarter of 2011. Anadarkos net income for the first quarter of 2012 included $1.8 billion related to the resolution of the exceptional profits tax dispute with Sonatrach.
For the three months ended March 31, 2012, oil and gas operating expenses increased by $10 million. Higher sales volumes and increased activity, primarily in Ghana and the Delaware basin of the Southern and Appalachia Region, resulted in an $11 million increase to operating expenses. Surface maintenance costs, primarily in the Rockies and the Southern and Appalachia Region, contributed another $6 million of increased costs. These increases were partially offset by lower workover costs of $8 million, primarily in the Gulf of Mexico and the Rockies.
For the three months ended March 31, 2012, other taxes increased by $33 million primarily due to higher crude-oil prices, resulting in higher Algeria exceptional profits tax of $15 million and increased U.S. production and severance taxes of $12 million.
In March 2012, Anadarko reached an agreement with Sonatrach to resolve the exceptional profits tax dispute. The agreement was approved by the Algerian government and provides for delivery to the Company of crude oil valued at approximately $1.7 billion and the elimination of $62 million of the Companys previously recorded and unpaid transportation charges. The crude oil is to be delivered to the Company over a 12-month period expected to begin in June 2012. The Company recognized a $1.8 billion credit in the Costs and Expenses section of the Consolidated Statement of Income for the three months ended March 31, 2012, to reflect the effects of this agreement on previously recorded expenses. The Company expects to receive approximately $1.0 billion in cash from the sale of the crude oil during 2012 and the balance in the first half of 2013. Additionally, the parties agreed to an amendment to the existing Production Sharing Agreement (PSA) that provides the Company increased sales volumes and a lower implied exceptional profits tax rate in future periods. The amendment also confirms the duration for each exploitation license granted under the PSA will be 25 years from the date the license was awarded.
The Company continuously monitors its liquidity needs, coordinates its capital expenditure program with its expected cash flows and projected debt-repayment schedule, and evaluates available funding alternatives in light of current and expected conditions. In order to increase the predictability of 2012 cash flows, Anadarko entered into strategic derivative positions, which cover approximately 42% and 51% of its remaining 2012 anticipated natural-gas and crude-oil sales volumes, respectively. In addition, the Company has derivative positions in place for 2013. See Note 5Derivative Instruments in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
Stocks Discussed: APC,