Anadarko Petroleum has ventured beyond its original area of operation -- the Anadarko Basin -- to explore for, develop, produce, and market oil, natural gas, natural gas liquids, and related products worldwide. In 2015 the large independent company reported proved reserves (90% of which is located in the US) of 2.1 billion barrels of oil equivalent. Additional assets include coal, trona (natural soda ash), and other minerals. Anadarko operates a handful of gas-gathering systems in the Mid-Continent. Internationally, the company has substantial oil and gas interests in Algeria. It also has holdings in Brazil, China, Indonesia, Mozambique, and West Africa.
Anadarko's assets include US onshore resource plays in the Rocky Mountains area, the southern US, and the Appalachian basin. It is one the largest independent producers in the deepwater Gulf of Mexico, and has production and exploration activities worldwide, including high-potential basins located in Alaska, Algeria, Brazil, China, Côte d'Ivoire, Ghana, Kenya, Liberia, Mozambique, New Zealand, Sierra Leone, and other countries.
In 2015 the US accounted for 82% of Anadarko's total revenues; Algeria, 13%; and other countries, 5%.
The company is engaged in oil and gas exploration and production (including gas, crude oil, condensate, and NGLs); the midstream activities of gathering, processing, treating, and transporting oil, natural gas, and NGLs production; and the marketing of oil, natural gas, and NGLs in the US, and oil from Algeria, China, and Ghana. NGLs sales represent revenues from the sale of products derived from the processing of Anadarko’s natural-gas production.
Oil and gas exploration and production, the largest segment, accounted for 50% of the Anadarko's revenues; marketing, 42%; and midstream, 8%.
Sales and Marketing
Anadarko sells crude oil and natural gas via a range of contractual agreements, including indexed, fixed-price, and cost-escalation-based agreements. Most of the company’s US oil, condensate, and NGLs production is sold under contracts.
At the end of 2015, Anadarko was contractually committed to deliver 1.1 trillion cu. ft. of natural gas to various US customers through 2031. That year it also was contractually committed to deliver 12 million barrels of oil to ports in Algeria and Ghana through 2015.
In 2015 net revenues decreased sharply by 53% due to lower international sales volume of oil and condensate primarily due to the timing of lifting in Algeria and the sale of the company’s Chinese subsidiary in 2014. Average oil price received decreased primarily as a result of global oversupply.
Natural gas sales volumes decreased in the Southern and Appalachia Region, Rockies, and Gulf of Mexico. Sales volume in Southern and Appalachia Region decreased primarily due to voluntary curtailments and third-party infrastructure downtime in the Marcellus shale and sale of some US onshore properties and related midstream assets in East Texas. Sales volume in Rockies decreased primarily due to voluntary curtailments at Greater Natural Buttes, a natural production decline at Powder River basin, and sale of certain coalbed methane properties. Sales volumes in the Gulf of Mexico decreased primarily due to a natural production decline at IHUB.
The average natural-gas price decreased primarily due to strong year-over-year production growth in the northeast US and slightly lower weather-driven residential and commercial demand mainly in the first half of 2015.
NGLs Sales Volumes increased; however, NGLs price decreased primarily due to decreased propane prices as a result of lower seasonal demand, higher NGLs production levels, and a related decline in oil prices.
In 2015 Anadarko's net loss dipped sharply by 282% due to the decrease in net sales and impairment charges related to the company’s Greater Natural Buttes oil and gas properties and midstream properties in the Rockies.
Cash from operating activities decreased by 122%.
Anadarko explores in high-potential, proven, and emerging basins worldwide. Developing a portfolio of primarily unconventional resources provides the company with a stable base of capital-efficient, predictable, and repeatable development opportunities.
Activities in the Rockies primarily focus on expanding existing fields to increase production and adding proved reserves through horizontal drilling, infill drilling, and down-spacing operations. The company drilled 447 wells and completed 390 wells in the Rockies during 2015. In the Southern and Appalachia Region, the company drilled 338 operated horizontal wells and brought 318 wells online that year. In 2015, the company focused its exploration and appraisal activity in East Africa, Côte d’Ivoire, and Colombia.
Anadarko's strategy is to preserve and build value by focusing its capital investment on longer-dated projects while driving cost savings and efficiencies through every aspect of its business. During 2015 the company closed $2 billion of monetizations and lowered its capital expenditures by 36%.
It moves included the divestiture of certain coalbed methane properties and related midstream assets in the Rockies, certain EOR(enhanced oil recovery) assets in the Rockies, and certain oil and gas properties and related midstream assets in East Texas.
The company plans to continue its disciplined and focused approach in 2016 by emphasizing value over growth, enhancing operational efficiencies, reducing capital expenses, and managing its diverse asset portfolio.
A down oil market forced Anadarko to lay off 17% of its workforce in 2016.
To raise cash to pay down debt and help it exploit its US shale assets (a growth segment) in 2014 Anadarko sold its interest in the non-operated Vito deepwater development, along with several surrounding exploration blocks in the Gulf of Mexico, for $500 million; and sold its interest in the Pinedale/Jonah assets in Wyoming for $581 million. That year it also agreed to sell its Chinese assets for $1.1 billion.
In 2014, Anadarko entered into an agreement with the plaintiffs (in the Tronox Adversary Proceeding to resolve all claims against Kerr-McGee, which stemmed from alleged actions by Kerr-McGee prior to its acquisition by Anadarko in 2006.
That year the company agreed to pay the federal government $5.15 billion (the largest ever settlement for environmental contamination) to settle claims related to the cleanup of thousands of sites tainted with hazardous chemicals.
Mergers and Acquisitions
In 2015 Anadarko made a bid to acquire Apache, which was rebuffed.