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 2014 the large independent company reported proved reserves (92% of which is located in the US) of 2.9 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 2014 the US accounted for 80% of Anadarko's total revenues.
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.
Sales and Marketing
Anadarko sells crude oil and natural gas via a range of contractual agreements. At the end of 2014, Anadarko was contractually committed to deliver 874 billion cu. ft. of natural gas to various US customers through 2031. That year Anadarko also was contractually committed to deliver 9 million barrels of oil to ports in Algeria and Ghana through 2015.
In 2014 revenues increased by 27% due to increased sales from Oil and Gas Exploration & Production and Midstream.
The average natural-gas price Anadarko received increased primarily due to low industry natural gas storage levels as a result of colder than average winter temperatures and the associated high residential heating demand in early 2014. In addition, natural gas prices increased as a result of higher industrial natural gas demand, reduced natural gas imports from Canada, and continued strength in exports to Mexico.
Anadarko’s oil and condensate sales volumes increased by 44,000 barrels a day; however, the company’s natural gas sales volumes decreased by 63 million cu. ft. per day. Gathering, processing, and marketing sales increased by $6 million due to higher gathering and processing revenue associated with higher volumes, increased natural gas prices, and improved infrastructure, partially offset by higher processing and transportation expenses due to the higher volumes.
In 2014 the company incurred a loss of $2.5 billion compared to 2013. The primary reason was due to Tronox-related contingent loss and income tax expenses, partially offset by higher revenues. In 2014, Anadarko and Kerr-McGee entered into a settlement agreement for $5.15 billion resolving all claims asserted in the Tronox Adversary Proceeding. (Kerr-McGee spun off its chemicals unit into Tronox just before being acquired by Anadarko. In 2014 a federal judge found that this move unfairly saddled Tronox with liabilities that ultimately bankrupted it in 2009). Anadarko recognized Tronox-related contingent losses of $4.3 billion in 2014 associated with the Tronox-related contingent loss recognized in 2011.
In 2014 Anadarko’s net cash provided by operating activities decreased by $422 million due to Tronox-related costs and a change in Algeria exceptional profits tax settlement and accounts receivable.
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 569 wells and completed 487 wells in the Rockies during 2014. The Company plans to continue its drilling program in 2015, focusing on the Wattenberg field. In 2015, the Company expects to focus its exploration and appraisal activity in East Africa, Côte d’Ivoire, and Colombia.
To raise cash to pay down debt and help it exploit its US shale assets (a growth segmentAnadarko 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.
In 2013 Anadarko agreed to sell 10% of its property off the shores of Mozambique to Oil and Natural Gas Corp. Ltd. for $2.64 billion.
Mergers and Acquisitions
In 2013 Anadarko acquired a number of US oil and gas assets for about $500 million.