HOUSTON—Nearly a year after Anadarko Petroleum Corp.’s multibillion-dollar purchase of two rivals, chairman Jim Hackett said Tuesday the independent oil and gas producer’s output is growing, costs are under control and measures to reduce its $17 billion debt are in place.
Anadarko, based in the Houston suburb of The Woodlands, bought Kerr-McGee Corp. and Denver-based Western Gas Resources Inc. last August for more than $22 billion, and it’s spent much of the past year reshaping its portfolio—now geared toward natural gas—by selling assets in the United States to reduce debt.
In a conference call with analysts to discuss Anadarko’s second-quarter results, Hackett said the company has generated $12.7 billion in after-tax proceeds from announced or closed transactions since the Kerr-McGee/Western Gas deal. He said the company hopes to reduce its overall debt to $12 billion by year’s end without the need to issue equity.
“It’s been less than a year since the merger closed, and we couldn’t be more pleased,” Hackett said. “The portfolio is performing, our cost structure is improving and we expect to continue executing upon our strategy.”
On Monday night, Anadarko said its second-quarter earnings fell 20 percent, in part because of hefty interest payments on debt from last year’s acquisitions. But revenue nearly doubled from a year ago and the results easily beat Wall Street forecasts.
Anadarko shares rose 23 cents to $50.33 Tuesday. They’ve traded in a 52-week range of $38.40 to $55.82.
Anadarko said net income for the April-June period totaled $652 million, or $1.39 per share, compared with $814 million, or $1.76 per share, in the second quarter of 2006.
Revenue in the period surged to $3.3 billion from $1.8 billion a year ago on higher sales volumes of natural gas, crude oil and natural gas liquids.
Analysts polled by Thomson Financial had forecast earnings of 79 cents a share on revenue of $2.5 billion.
The company said income from continuing operations in the most recent quarter was $645 million, or $1.38 a share, off slightly from the comparable figure of $663 million, or $1.43 a share, a year ago.
In a research note, Raymond James & Associates said Anadarko’s “excellent” quarter was due in part to lower operating costs partly offset by slightly lower-than-anticipated volumes than it had forecast.
Hackett said Anadarko has raised the production guidance for its continuing portfolio to between 189 million and 193 million barrels of oil equivalent for the year—an increase of 3 million barrels from the previous midpoint guidance.
Anadarko got a lift in mid-July when Independence Hub, the world’s deepest production platform operating in 8,000 feet of water in the Gulf of Mexico, began producing natural gas.
The $2 billion project is expected to reach production of 1 billion cubic feet of gas a day by year’s end—roughly 2 percent of U.S. natural gas production.
Anadarko, which operates the semi-submersible platform, has reserved 61 percent of Hub’s capacity. The remainder is controlled by Italy’s Eni SpA (20 percent), Norway’s Norsk Hydro ASA (12.5 percent) and Devon Energy Corp. (6.5 percent), whose corporate headquarters are in Oklahoma City.
For the first six months of the year, Anadarko’s net income was $756 million, or $1.62 a share, off sharply from the $1.47 billion, or $3.18 a share, it earned a year ago.
