Anadarko Corporation
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Address
1201 Lake Robbins Drive
The Woodlands
Texas 77380
U.S.A.
Tel 832 636 1000
Fax 832 63 8207
Web http://www.anadarko.com
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Capex
In March 2008, the Board of Directors of Anadarko approved an expansion of the company's 2008 capital budget by approximately $400 million. Anadarko now expects 2008 capital expenditures, including expensed exploration, to be in the range of $4.9 to $5.1 billion. The additional capital is expected to have a positive impact on the company's 2008 production estimates and its 2008 reserve bookings.
Stronger-than-anticipated commodity prices and the recently announced divestitures of the Peregrino field offshore Brazil and the Kaskida Unit in the deepwater Gulf of Mexico have created an opportunity to increase the company's capital expenditures in 2008. Anadarko expect the additional capital to enhance their operating metrics and generate stronger production volumes and reserve adds. As a result, the company are increasing the midpoint of their full-year production guidance by 2 million BOE (barrels of oil equivalent). In addition, Anadarko are increasing their 2008 anticipated reserve bookings to at least 250 million BOE of proved reserves - an increase of approximately 10 percent over prior estimates at the same reserve-replacement-cost target.
In addition to the already expected double-digit production growth in the Rocky Mountain region, the additional capital will enable Anadarko to accelerate development activities in the Texas and Mid-Continent areas that offer higher-margin, lower-risk production volumes in the near term. The company also plan to direct a portion of the increased capital toward exploration drilling in the emerging Marcellus Shale area in the Appalachian Basin of Pennsylvania where they have access to approximately 500,000 gross acres in the fairway of the play. Separately, Anadarko expect to direct additional capital toward the enhancement of their acreage position in the deepwater Gulf of Mexico and their midstream infrastructure onshore.
CAPITAL ALLOCATION BY AREA
Anadarko's capital budget for 2008 reflects the company's commitment to accelerate the value of its net risked captured resources with a particular emphasis on achieving double-digit production growth in the Rocky Mountain region, continuing development in the deepwater Gulf of Mexico, including the start-up of the Blind Faith platform, driving toward first production at the Peregrino field offshore Brazil and extending the company's deepwater exploration activities worldwide. An approximate breakout of the company's 2008 capital budget by area is provided below:
- 30% Rocky Mountains
- 20% Southern U.S.
- 25% Deepwater Gulf of Mexico
- 15% International and Frontier
- 10% Midstream
Future Plans
U.S. Onshore
The majority of the 2008 budget will focus on Anadarko's inventory of development opportunities in the resource plays of the Rocky Mountain and Southern regions. Approximately 2,700 to 3,000 U.S. onshore development wells are planned in 2008, comprised of approximately 85% in the Greater Natural Buttes, Wattenberg, Powder River Basin and other areas in the Rocky Mountains, and approximately 15% in the company's Southern region including the Delaware Basin, eastern Chalk and Carthage areas of Texas.
Anadarko has identified thousands of low-risk opportunities onshore in the U.S., including infill drilling, re-completions and other repeatable projects capable of delivering double-digit production growth in the Rocky Mountain region for years to come. During 2007, the company also expanded its midstream infrastructure in the Rockies to enhance its ability to execute upon its development and production activities. Two major projects scheduled to commence in 2008 will further expand processing and gathering capabilities in the area. The first involves the second-phase expansion of the Chapita plant in Greater Natural Buttes, which will add a cryogenic processing facility that will double Chapita's current processing capacity to 500 million cubic feet per day (MMcf/d). The other significant project will add 400 MMcf/d of gathering capacity at the Fort Union system, bringing its total capacity to 1.3 billion cubic feet per day (Bcf/d) and making it the largest capacity gathering system in the Powder River Basin.
Deepwater Gulf of Mexico
The company's 2008 capital for the deepwater Gulf of Mexico is primarily focused on development drilling, with a particular focus on the eastern Gulf of Mexico and the K2 unit. In 2008, Anadarko also anticipates drilling approximately six to eight exploration and appraisal wells targeting Miocene and Lower Tertiary objectives.
International/Frontier
Anadarko has allocated the majority of its international capital toward advancing projects in Brazil, Alaska, Algeria and China. Anadarko also expects to increase its international exploration and appraisal activities in 2008 - the majority of which will be focused on deepwater opportunities in West Africa, Brazil and in the South China Sea.Production
Sales volumes of natural gas, crude oil and natural gas liquids from continuing operations for 2007 totaled 211 million BOE (578,082 boepd).
Sales volumes of natural gas, crude oil and natural gas liquids from continuing operations for 2006 totaled 178 million BOE, up from 2005 volumes of 138 million BOE.
Reserves
Anadarko estimates its worldwide proved reserves at year-end 2007 totaled 2.43 billion BOE. In 2007, excluding the effect of divestitures, the company added approximately 250 million BOE of proved reserves and incurred costs in exploration and development activities of approximately $3.84 billion. Reserve additions were primarily driven by low-risk development activities and infill drilling in the Greater Natural Buttes area, Wattenberg field and Powder River Basin, as well as the previously announced Peregrino development offshore Brazil.
Anadarko's year-end 2007 proved reserves were balanced between natural gas (58%, or 8.50 trillion cubic feet) and liquids (42%, or 1.01 billion barrels), which include crude oil, condensate and natural gas liquids.
Anadarko added 1.04 billion BOE of proved reserves, excluding sales of reserves in place, primarily from acquisitions completed during 2006. Net of property sales, the company ended 2006 with a total of 3.0 billion BOE, up 23 percent from year-end 2005.
Who's Who
James T. Hackett
Chairman
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Robert J. Allison, Jr.
Chairman Emeritus
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Bruce W. Busmire
Vice President, Finance and Treasurer
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Mario M. Coll, III
Vice President, Information Technology Services
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Robert P. Daniels
Senior Vice President, Worldwide Exploration
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Robert G. Gwin
Vice President and Treasurer
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Preston Johnson, Jr.
Vice President, Human Resources
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Karl F. Kurz
Chief Operating Officer
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Charles A. Meloy
Senior Vice President Worldwide Operations
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Gregory M. Pensabene
Vice President, Government Relations
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Robert K. Reeves
Senior Vice President, General Counsel and Chief Administrative Officer
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Albert L. Richey
Vice President
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Charlene A. Ripley
Vice President
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R. A. Walker
Senior Vice President, Finance and Chief Financial Officer
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Paula Rosput Reynolds
Director
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Peter J. Fluor
Director
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M. Cathy
Vice President and Chief Accounting Officer
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Katie
Vice President, Corporate Development
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Offices
United States
Head Office
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China
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United Kingdom
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Algeria
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Canada
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Indonesia
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