Friday, October 29, 2010

Anadarko Petroleum Corporation (NYSE: APC): Q3 Earnings Preview 2010

Anadarko Petroleum Corporation (NYSE: APC) is scheduled to release its third quarter earnings after the closing bell on Monday, November 1, 2010. Analysts, on average, expect the company to report earnings of 30 cents per share on revenue of $2.65 billion. In the year ago period, the company reported a loss of 11 cents per share on revenue of $2.74 billion.

Anadarko Petroleum Corporation engages in the exploration and production of oil and gas properties primarily in the United States, the deepwater of the Gulf of Mexico, and Algeria. It markets natural gas, crude oil, condensate, and oil and natural gas liquids, as well as owns and operates natural-gas gathering, processing, treating, and transportation systems.

In the preceding second quarter, the Woodlands, Texas-based company's net loss was $40 million, or 8 cents a share, from a loss of $226 million, or 48 cents a share, in the year-earlier quarter. Excluding one-time items, adjusted net income was $244 million, or 49 cents a share, in the second quarter. Revenue climbed to $2.6 billion from $1.91 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 36 cents per share on revenue of $2.75 billion. 

At its last earnings call in August, the company lifted its 2010 production outlook to 232 million to 236 million barrels of oil equivalent, up 5%-7% from 2009 output levels. 

For the third quarter, Anadarko anticipates total sales in the range of 55 MMBOE to 58 MMBOE.

The company is bracing for a tougher regulatory climate, and faces uncertainty over costs from a massive oil spill. Anadarko was part owner of the blown-out Macondo well, and could see significant liability, in addition to new restrictions following the largest offshore oil spill in U.S. history.

According to media reports, Cnooc (NYSE: CEO), China's largest offshore oil driller, reportedly submitted a $5 billion joint bid Ghana National Petroleum to acquire Kosmos Energy's stake in Ghana's Jubilee, an asset that Exxon Mobil (NYSE: XOM) has already offered $4 billion for. Shares of the company have rallied amid speculation that the Australian firm BHP Billiton Ltd. (NYSE: BHP) could be interested in buying the independent oil and gas exploration.

Among other developments,  Anadarko recently announced that the Barquentine exploration well in the Offshore Area 1 of Mozambique's Rovuma Basin encountered a total of more than 416 net feet of natural gas pay in multiple high-quality sands. Specifically, the discovery well encountered more than 308 net feet of pay in two Oligocene sands that are separate and distinct geologic features, but age-equivalent to those encountered in Anadarko's previously announced Windjammer discovery. The well also found an additional 108 net feet of natural gas pay in the Paleocene sands. This deeper pay appears to be part of the same accumulation as the 75 net feet of pay that was encountered at the Windjammer discovery, located 2 miles to the southwest.

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