Special topics
Anadarko Petroleum Corporation (APC – Analyst Report) reported a first-quarter 2015 adjusted loss of 72 cents per share, wider than the Zacks Consensus Estimate of a loss of 63 cents. This amounted to a negative earnings surprise of 14.29%. In the first quarter of 2014, the company had reported earnings of $1.26 per share. Anadarko slipped into a loss in the reported quarter primarily due to lower price realized for crude oil and condensate and NGL sales and spiraling costs.
On a GAAP basis, the company registered a loss per share of $6.45 compared with the year-ago loss of $5.30 per share
Total Revenues
In the first quarter of 2015, Anadarko Petroleum’s total revenues of $2,321 million lagged the Zacks Consensus Estimate of $2,453 million by 5.4%. Reported revenues slumped 60.3% from $5,844 million a year ago.
Operational Highlights
In the quarter under review, Anadarko Petroleum’s average daily sales volume increased 14% year over year to 934,000 barrels of oil equivalent per day (BOE/d). This was primarily driven by strong sales volume of crude oil and condensate, natural gas and NGL.
The quarterly sales volume for natural gas was 2,738 million cubic feet per day (MMcf/d), down 1.5% year over year. Crude oil and condensate and NGL sales volume stood at 335 thousand barrels per day (MBbls/d), up 24.1% year over year and 143 MBbls/d, up 44.4% year over year, respectively.
Realized prices for natural gas, crude oil and condensate and NGL averaged $2.60 per thousand cubic feet (down 48.1%), $47.12 per barrel (down 52.6%) and $18 per barrel (down 58.5%), respectively, in the reported quarter.
Anadarko Petroleum’s total costs and expenses shot up 127.6% year over year to $6,529 million, primarily due to a 262.2% surge in exploration expense. Impairment charges of $2,783 million also drove expenses up.
Interest expenses increased 18% to $216 million from $183 million in the prior-year quarter, primarily due to a rise in debt levels.
Financial Condition
Anadarko Petroleum had cash and cash equivalents of $2.3 billion as of Mar 31, 2015, significantly down from $7.4 billion as of Dec 31, 2014.
Long-term debt as of Mar 31, 2015, was $16.4 billion compared with $15.1 billion as of Dec 31, 2014.
Anadarko Petroleum’s net cash used in operating activities during the quarter was $4.5 billion as against net cash generated in operating activities of $1.7 billion in the prior-year period.
In the reported quarter, the company’s capital expenditure was $1.8 billion, down from $2.6 billion in the year-ago period.
Peer Releases
Murphy Oil Corporation (MUR – Analyst Report) reported a first-quarter 2015 loss of $1.11 per share, wider than the Zacks Consensus Estimate of a loss of 86 cents.
TOTAL S.A. (TOT – Analyst Report) reported first-quarter 2015 operating earnings of $1.13 per share (€1.00 per share), surpassing the Zacks Consensus Estimate by 76.6%.
ExxonMobil Corporation (XOM – Analyst Report) posted first-quarter 2015 earnings of $1.17 per share, beating the Zacks Consensus Estimate of 80 cents.
Our View
Anadarko Petroleum came out with disappointing first-quarter financial results incurring a loss wider than the expectation. Revenues too fell short of estimates.
Despite registering strong sales volumes in the first quarter, Anadarko was severely hit by plunging oil and natural gas prices. Adding to the severity was spiraling exploration expenses which dragged down overall results.
On the positive, Anadarko is on track with its projects like the Heidelberg project and various other drilling activities in GoM and offshore Ghana. In the first quarter, significant oil accumulation was discovered at the Yeti prospect in the Gulf of Mexico of which the company owns a 37.5% working interest.
Although the company is undertaking measures to expand its oil reserves by large scale drilling projects, sinking oil prices are undermining the stock’s performance in spite of rising sales output.
Anadarko Petroleum currently has a Zacks Rank #3 (Hold).
Source: http://www.zacks.com/stock/news/173730/anadarko-posts-widerthanexpected-loss-on-sinking-prices
