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Anadarko (APC) Q1 Loss Narrower than Expected, Revenues Lag

Anadarko Petroleum Corporation APC reported a first-quarter 2016 adjusted loss of $1.12 per share, narrower than both the Zacks Consensus Estimate of a loss of $1.19 and the year-ago loss of 72 cents.

On a GAAP basis, the company registered a loss per share of $2.03, much narrower than the year-ago loss of $6.45. The difference between GAAP and adjusted figure was due to additional one-time loss of 91 cents, affecting comparability.

Total Revenue

In the reported quarter, Anadarko Petroleum’s revenues of $1,674 million missed the Zacks Consensus Estimate of $1,815 million by 7.8%. Revenues also plunged 27.9% year over year.

Operational Highlights

In the reported quarter, Anadarko Petroleum's average daily sales volume declined 11.5% year over year to 827,000 barrels of oil equivalent per day (BOE/d).

The quarterly sales volume for natural gas was 2,303 million cubic feet per day (MMcf/d), down 15.9% year over year from 2,738 MMcf/d. Crude oil and condensate, and NGL sales volume were 315 thousand barrels per day (MBbls/d), down 6%, and 128 MBbls/d, down 10.5%, respectively.

Realized prices for natural gas, crude oil and condensate, and NGL averaged $1.75 per thousand cubic feet (down 32.7%), $29.65 per barrel (down 37.1%) and $15.32 per barrel (down 14.9%), respectively, in the quarter under review.

Anadarko Petroleum’s total costs and expenses decreased 61.1% year over year to $2,538 million, primarily due to the absence of impairments and lower exploration expenses.

Interest expenses of $220 million inched up 2% from $216 million in the year-ago quarter due to a rise in long-term debt.

Financial Condition

Anadarko Petroleum had cash and cash equivalents of $2,947 million as of Mar 31, 2016, substantially up from $939 million as of Dec 31, 2015.

Long-term debt as of Mar 31, 2016, was $15,726 million, up from $16,636 as of Dec 31, 2015.

Anadarko Petroleum's net cash used in operating activities during the quarter was $137 million, compared with $4,504 million in the prior-year period.

In the reported quarter, the company’s capital expenditure was $896 million, down from $1,822 million in the year-ago quarter.

Guidance

Anadarko expects average daily sales volume in the range of 780,000–802,000 BOE/d for second-quarter 2016 and 770,000–781,000 BOE/d for 2016.

The company expects capital expenditure to be $700–$800 million in the second quarter and $2,600–$2,800 million in 2016.

Upcoming Peer Releases

Murphy Oil Corporation MUR is scheduled to report on May 4, after the market closes. The Zacks Consensus Estimate stands at a loss of 87 cents.

Noble Energy, Inc. NBL is scheduled to report on May 4, before the market opens. The Zacks Consensus Estimate stands at a loss of 53 cents.

WPX Energy, Inc. WPX is scheduled to report on May 5, before the market opens. The Zacks Consensus Estimate stands at a loss of 20 cents.

Zacks Rank

Anadarko Petroleum currently carries a Zacks Rank #3 (Hold).

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