-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, NjdWagG2ApAZNoPHoJobZcZj4oAq22za/hV5U01AtpOF9SnrV8Vs7KEdWGSHrrNd 8hac5ZWq1Si0SUnUBpSXpQ== 0000773910-94-000008.txt : 19941116 0000773910-94-000008.hdr.sgml : 19941116 ACCESSION NUMBER: 0000773910-94-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANADARKO PETROLEUM CORP CENTRAL INDEX KEY: 0000773910 STANDARD INDUSTRIAL CLASSIFICATION: 1311 IRS NUMBER: 760146568 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08968 FILM NUMBER: 94559355 BUSINESS ADDRESS: STREET 1: 16855 NORTHCHASE DR CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 7138751101 MAIL ADDRESS: STREET 1: P O BOX 1330 STREET 2: P O BOX 1330 CITY: HOUSTON STATE: TX ZIP: 77251-1330 10-Q 1 ============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended: September 30, 1994 Commission File Number: 1-8968 _____________________ ANADARKO PETROLEUM CORPORATION (Exact name of registrant as specified in its charter) Delaware 76-0146568 (State or other jurisdic- (I.R.S. Employer Iden- tion of incorporation tification No.) or organization) 17001 NORTHCHASE DRIVE, HOUSTON, TEXAS 77060 (Address of executive offices) (Zip Code) (713) 875-1101 (Registrant's telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the registrant's classes of common stock as of October 31, 1994 is shown below: Number of Shares Title of Class Outstanding Common Stock, $0.10 par value 58,842,054 ============================================================================== PART I. FINANCIAL INFORMATION Item 1. Financial Statements ANADARKO PETROLEUM CORPORATION CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30 September 30 thousands 1994 1993 1994 1993 Revenues Gas sales $ 67,083 $ 65,074 $243,519 $219,698 Oil and condensate sales 34,753 30,691 93,935 97,147 Natural gas liquids and other 9,519 7,506 25,410 28,221 Total 111,355 103,271 362,864 345,066 Costs and Expenses Operating expenses 24,127 22,762 76,651 70,943 Administrative and general 15,339 14,043 45,222 42,098 Depreciation, depletion and amortization 40,807 37,412 131,490 120,894 Other taxes 10,195 10,080 31,982 31,267 Provisions for impairments of international properties --- --- --- 4,700 Total 90,468 84,297 285,345 269,902 Operating Income 20,887 18,974 77,519 75,164 Other Income 698 255 1,873 2,544 Gross Income 21,585 19,229 79,392 77,708 Interest Expense 7,126 6,088 20,843 22,431 Income before Income Taxes and Cumulative Effect of Changes in Accounting Principles 14,459 13,141 58,549 55,277 Income Taxes Income taxes 4,154 3,882 19,499 18,370 Effect of change in income tax rate --- 11,249 --- 11,249 Total 4,154 15,131 19,499 29,619 Net Income (Loss) before Cumulative Effect of Changes in Accounting Principles 10,305 (1,990) 39,050 25,658 Cumulative Effect of Changes in Accounting Principles --- --- --- 77,403 Net Income (Loss) $ 10,305 $ (1,990) $ 39,050 $103,061 Per Common Share Net income (loss) before cumulative effect of changes in accounting principles $ 0.18 $ (0.03) $ 0.66 $ 0.45 Cumulative effect of changes in accounting principles --- --- --- 1.36 Net income (loss) 0.18 (0.03) 0.66 1.82 Dividends $ 0.075 $ 0.075 $ 0.225 $ 0.225 Average Number of Shares Outstanding 58,802 58,594 58,752 56,741 See accompanying notes to consolidated financial statements. Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) September 30, December 31, thousands 1994 1993 ASSETS Current Assets Cash and cash equivalents $ 55,882 $ 17,799 Accounts receivable 89,809 110,486 Inventories, at average cost 13,760 9,551 Prepaid expenses 341 3,025 Total 159,792 140,861 Properties and Equipment Original cost 3,525,313 3,266,825 Less accumulated depreciation, depletion and amortization 1,539,046 1,425,098 Net properties and equipment - based on the full cost method of accounting for oil and gas properties 1,986,267 1,841,727 Deferred Charges 31,150 40,198 $2,177,209 $2,022,786 See accompanying notes to consolidated financial statements. Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION CONSOLIDATED BALANCE SHEET (continued) (Unaudited) September 30, December 31, thousands 1994 1993 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable Trade and other $ 92,150 $ 92,311 Banks 13,671 13,328 Accrued expenses Interest 7,660 7,663 Taxes and other 18,528 12,715 Total 132,009 126,017 Long-term Debt 655,576 542,500 Deferred Credits Deferred income taxes 440,795 424,293 Other 54,777 65,810 Total 495,572 490,103 Stockholders' Equity Common stock, par value $0.10 (200,000,000 shares authorized, 58,812,381 and 58,668,407 shares issued and outstanding as of September 30, 1994 and December 31, 1993, respectively) 5,926 5,912 Preferred stock, par value $1.00 (2,000,000 shares authorized, no shares issued as of September 30, 1994 and December 31, 1993) --- --- Paid-in capital 241,415 236,001 Retained earnings (as of September 30, 1994, $244,052,000 was not restricted as to the payment of dividends) 650,450 625,308 Deferred compensation (3,739) (3,055) Total 894,052 864,166 $2,177,209 $2,022,786 See accompanying notes to consolidated financial statements. Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Nine Months Ended September 30 thousands 1994 1993 Cash Flow from Operating Activities Net income $ 39,050 $103,061 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and amortization 131,490 120,894 Amortization of restricted stock 900 1,229 Deferred income taxes 17,386 29,774 Cumulative effect of changes in accounting principles --- (77,403) Provisions for impairments of international properties --- 4,700 188,826 182,255 Decrease in accounts receivable 20,677 17,285 Increase in inventories (4,209) (546) Increase in accounts payable - trade and other and accrued expenses 5,649 14,209 Other items - net 1,857 (1,612) Net cash from operating activities 212,800 211,591 Cash Flow from Investing Activities Additions to properties and equipment (337,617) (180,824) Sales and retirements of properties and equipment 59,144 3,269 Net cash used in investing activities (278,473) (177,555) Cash Flow from Financing Activities Additions to debt 113,076 123,679 Retirements of debt --- (141,722) Increase (decrease) in accounts payable, banks 343 (4,811) Dividends paid (13,222) (12,817) Issuance of common stock 3,844 5,557 Issuance of treasury stock 316 899 Purchase of treasury stock (355) (179) Net cash from (used in) financing activities 104,002 (29,394) Effect of Exchange Rate Changes on Cash (246) (406) Net Increase in Cash and Cash Equivalents 38,083 4,236 Cash and Cash Equivalents at Beginning of Period 17,799 14,833 Cash and Cash Equivalents at End of Period $ 55,882 $ 19,069 See accompanying notes to consolidated financial statements. Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1.Summary of Accounting Policies Anadarko Petroleum Corporation is engaged in the exploration, development, production and marketing of gas, oil and natural gas liquids. The terms "Anadarko" and "Company" refer to Anadarko Petroleum Corporation and its subsidiaries. The principal subsidiaries of Anadarko are Anadarko Gathering Company, Anadarko Marketing Company, Anadarko Trading Company, Anadarko Petroleum of Canada Ltd. and Anadarko Algeria Corporation. Effective January 1, 1993, Anadarko adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes", which resulted in an increase to net income of $87,071,000 and SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", which resulted in a decrease to net income of $9,668,000. 2.Inventories The major classes of inventories are as follows: September 30, December 31, thousands 1994 1993 Materials and supplies $10,995 $8,226 Natural gas liquids, stored in inventory 1,931 1,325 Natural gas, stored in inventory 834 --- $13,760 $9,551 3.Properties and Equipment Oil and gas properties include costs of $254,146,000 and $180,933,000 at September 30, 1994 and December 31, 1993, respectively, which were excluded from capitalized costs being amortized. These amounts represent costs associated with unevaluated properties and major development projects. 4.Long-term Debt and Financial Instruments A summary of long-term debt follows: September 30, December 31, thousands 1994 1993 Notes Payable, Banks $162,000 $142,500 Commercial Paper 93,576 --- 8 3/4% Notes due 1998 100,000 100,000 8 1/4% Notes due 2001 100,000 100,000 6 3/4% Notes due 2003 100,000 100,000 5 7/8% Notes due 2003 100,000 100,000 $655,576 $542,500 Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 4.Long-term Debt and Financial Instruments (continued) In May 1994, the Company entered into a $250,000,000 Revolving Credit Agreement and a $150,000,000 364-Day Credit Agreement with a group of 11 commercial banks. Interest rates are based on either the reference rate, the rate of certificate of deposit, the Eurodollar rate or a combination thereof. The Agreements provide for commitment fees on the unused balances at a rate of 18.5/100 of one percent and 12.5/100 of one percent for the Revolving Credit Agreement and 364-Day Credit Agreement, respectively. The Revolving Credit Agreement will expire in 1999. The Agreements replaced the Revolving Credit Agreement entered into in February 1992. As of September 30, 1994, there were no outstanding borrowings under these Agreements. The notes payable to banks and commercial paper have been classified as long-term debt in accordance with SFAS 6, "Classification of Short-term Obligations Expected to be Refinanced", under the terms of Anadarko's $400,000,000 Bank Credit Agreements. In October 1993, the Company accepted a $2,600,000 payment for an option giving the purchaser the right to enter into an interest rate swap agreement exercisable in October 1994. This agreement, if exercised, would effectively fix the rate the Company would pay on a notional $100,000,000 of its floating interest rate debt at six percent for nine years. The $2,600,000 payment and the related agreement hedged the Company's floating interest rate debt. The option was not exercised in October 1994 and as a result the Company will record a reduction to interest expense of $2,600,000 in the fourth quarter of 1994. 5.Stock For the third quarter of 1994, dividends of 7.5 cents per share were paid to holders of common stock. Under the most restrictive provisions of the various credit agreements, which limit the payment of dividends by the Company, retained earnings of $244,052,000 and $464,166,000 were not restricted as to the payment of dividends at September 30, 1994 and December 31, 1993, respectively. 6.Statement of Cash Flows Supplemental Information The amounts of cash paid for interest (net of amounts capitalized) and income taxes are as follows: Nine Months Ended September 30 thousands 1994 1993 Interest $18,586 $22,931 Income taxes $ 451 $ 5,544 In July 1993, $99,778,000 principal amount of 6 1/4% Convertible Subordinated Debentures due 2014 were converted into 2,917,276 shares of Anadarko Common Stock. Item 1. Financial Statements (continued) ANADARKO PETROLEUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 7.Income Taxes The Omnibus Budget Reconciliation Act of 1993, which was enacted in August 1993, raised the top corporate income tax rate from 34 to 35 percent retroactive to January 1, 1993. As a result, Anadarko recorded a charge to third quarter 1993 earnings of $11,249,000 (19 cents per share). 8.Contingencies - Environmental In January 1994, the Company received a Special Notice for Remedial Design/Remedial Action from the Environmental Protection Agency (EPA) in connection with the disposal of oil and gas exploration and production wastes at the PAB Oil Superfund site (the "Site") at Abbeville, Louisiana. The Company had previously received a Notice of Potential Liability from the EPA as one of the potentially responsible parties (PRP) in connection with this Site. In the Notice of Potential Liability, the EPA attributed 40 barrels of waste to the Company which was disposed of by a third party contractor on behalf of the Company. In October 1994, Anadarko signed an Administrative Order on Consent with the EPA for $8,040 in settlement of the Company's potential liability. On December 17, 1993, the Company received a notice from the Department of Justice in the State of California indicating the Company may be a PRP for the study, cleanup and closure of the waste facility owned by Geothermal, Inc. in Middletown, California (the GI site ). Anadarko's records indicate the disposal of a limited number of barrels of drilling mud at the GI site in 1982. During the first quarter of 1994, the Company, along with other PRPs, became a party to a Cost Sharing, Joint Defense and Confidentiality Agreement, effective October 20, 1993. The Company believes its share of costs in connection with the cleanup of the GI site will not have a material effect on its financial position or results of operations and will be approximately $35,000 to $70,000. 9.The information as furnished reflects all normal recurring adjustments that are, in the opinion of management, necessary to a fair statement of financial position as of September 30, 1994 and December 31, 1993, the results of operations for the three and nine months ended September 30, 1994 and 1993, and cash flows for the nine months ended September 30, 1994 and 1993. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview For the third quarter of 1994, Anadarko's net income was $10.3 million (18 cents per share of common stock outstanding) compared to income (before the effect of a change in income tax rate) of $9.3 million (16 cents per share) for the third quarter of 1993. The 1993 third quarter results included a special tax charge of $11.2 million (19 cents per share) to adjust deferred tax liabilities for the increase in the top corporate income tax rate. Stated with the effect of this charge, Anadarko had a net loss of $2.0 million (three cents per share) for the third quarter of 1993. For the first nine months of 1994, Anadarko's net income was $39.1 million (66 cents per share). This compares to income, before the effect of the change in income tax rate and changes in accounting principles, of $36.9 million (65 cents per share) for the same period of 1993. The changes in accounting principles were implemented in January 1993 and related to changes in accounting for income taxes and postretirement benefits other than pensions. Including the effect of the change in income tax rate and the cumulative effect of changes in accounting principles, net income for the first nine months of 1993 was $103.1 million ($1.82 per share). Operating Results Revenues for the third quarter of 1994 were $111.4 million, up eight percent compared to $103.3 million for the third quarter of 1993. The increase in revenues for the third quarter of 1994 is due primarily to higher volumes of natural gas, oil and natural gas liquids (NGLs), which was partially offset by a decline in natural gas prices. Revenues for the first nine months of 1994 were $362.9 million, an increase of five percent compared to $345.1 million for the same period of 1993. The increase in revenues for the first nine months of 1994 is due primarily to higher volumes of natural gas, oil and NGLs, which was partially offset by declines in prices. The following table shows the Company's volumes and U.S. prices for the three and nine months ended September 30, 1994 and 1993: Three Months Ended September 30 % Increase 1994 1993 (Decrease) Natural gas, million cubic feet 40,925 35,710 15 Price per thousand cubic feet $ 1.59 $ 1.94 (18) Crude oil and condensate, thousand barrels 2,066 1,976 5 Price per barrel $ 16.55 $ 15.81 5 Natural gas liquids, thousand barrels 626 516 21 Price per gallon $ 0.33 $ 0.31 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Nine Months Ended September 30 % Increase 1994 1993 (Decrease) Natural gas, million cubic feet 132,110 117,270 13 Price per thousand cubic feet $ 1.80 $ 1.90 (5) Crude oil and condensate, thousand barrels 6,321 5,810 9 Price per barrel $ 14.88 $ 17.06 (13) Natural gas liquids, thousand barrels 1,919 1,765 9 Price per gallon $ 0.29 $ 0.33 (12) See "Natural Gas Volumes, Prices and Markets" and "Crude Oil, Condensate and Natural Gas Liquids Volumes and Prices". Costs and expenses during the third quarter of 1994 were $90.5 million, an increase of $6.2 million (seven percent) compared to $84.3 million for the third quarter of 1993. The increase was due to several factors: (1) Depreciation, depletion and amortization increased $3.4 million (nine percent) due to higher production volumes. (2) Operating expenses were up $1.4 million (six percent) due primarily to an increase in gas purchased expense. (3) Administrative and general expenses were up $1.3 million (nine percent) due to an increase in salary and benefits for the Company's growing workforce. For the first nine months of 1994, costs and expenses were $285.3 million, an increase of $15.4 million (six percent) compared to $269.9 million for the first nine months of 1993. The increase in costs and expenses was due to several factors: (1) Depreciation, depletion and amortization increased $10.6 million (nine percent) due to higher production volumes. (2) Operating expenses were up $5.7 million (eight percent) due to higher gas purchased expense and oil and gas operating expenses. (3) Administrative and general expenses were up $3.1 million (seven percent) due to an increase in salary and benefits for the Company's growing workforce. The first nine months of 1993 costs and expenses included $4.7 million in impairments for international properties recorded in the first quarter of 1993. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Interest expense for the third quarter of 1994 was $7.1 million, an increase of 17 percent compared to $6.1 million for the third quarter of 1993. The increase in interest expense for the third quarter is due to higher average debt outstanding at slightly higher interest rates partially offset by an increase in capitalized interest. For the first nine months of 1994, interest expense was $20.8 million, a decrease of seven percent compared to $22.4 million for the same period of 1993. The decrease in interest expense for the first nine months of 1994 is due primarily to higher amounts of capitalized interest during 1994 related to an increase in costs excluded from amortization as a result of the offshore lease acquisitions in 1994, partly offset by higher average debt outstanding at slightly higher interest rates. Natural Gas Volumes, Prices and Markets During the third quarter of 1994, Anadarko produced 40.9 billion cubic feet (Bcf) or 445 million cubic feet per day (MMcf/d) of natural gas, up 15 percent compared to 35.7 Bcf or 388 MMcf/d of gas in the third quarter of 1993. Anadarko's average U.S. gas price during the third quarter of 1994 was $1.59 per thousand cubic feet (Mcf), an 18 percent decrease from $1.94 per Mcf in the third quarter of 1993. For the first nine months of 1994, Anadarko produced 132.1 Bcf or 484 MMcf/d of gas, up 13 percent compared to 117.3 Bcf or 430 MMcf/d of gas for the same period of 1993. The Company's average U.S. gas price for the first nine months of 1994 was $1.80 per Mcf, a five percent decrease from $1.90 per Mcf for the same period of 1993. The increases in gas production stem primarily from higher production allowables in the Hugoton Field of Kansas and the West Panhandle Field of Texas. Historically, natural gas sales markets have been highly seasonal because of the increase in residential heating demand during the winter. Due to this seasonality, Anadarko's natural gas prices and production volumes and, therefore, financial results have traditionally been stronger in the first and fourth quarters. Crude Oil, Condensate and Natural Gas Liquids Volumes and Prices Anadarko's crude oil and condensate production for the third quarter of 1994 increased five percent to 2.1 million barrels (MMBbls) from 2.0 MMBbls in the third quarter of 1993. Anadarko's average U.S. oil price increased five percent to $16.55 per barrel in the third quarter of 1994 compared to $15.81 per barrel for the same period in 1993. For the first nine months of 1994, crude oil and condensate production was 6.3 MMBbls, an increase of nine percent compared to 5.8 MMBbls for the same period of 1993. Anadarko's average U.S. oil price for the first nine months of 1994 was $14.88 per barrel, a decrease of 13 percent compared to $17.06 per barrel for the same period of 1993. The increases in oil production are due primarily to higher volumes from several waterflood oil projects in Southwest Kansas and West Texas. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Generally, the Company's oil and condensate production is sold on a monthly basis as it is produced. Production of oil is usually not affected by seasonal swings in market prices. NGLs sales volumes were up 21 percent to 626 thousand barrels (MBbls) at an average price of 33 cents per gallon for the third quarter of 1994. This compares to 516 MBbls at an average price of 31 cents per gallon for the same period of 1993. The increase in volumes is due primarily to an increase in product sold from inventory partially offset by a decrease in production. NGLs volumes for the first nine months of 1994 were up nine percent to 1,919 MBbls at an average price of 29 cents per gallon compared to 1,765 MBbls at an average price of 33 cents per gallon during the same period of 1993. The increase in volumes is due primarily to higher production volumes and a decrease in product stored in inventory. Hedging Strategies Anadarko uses hedges to limit the Company's and its customers' exposure to changes in the market price of natural gas and crude oil. Gains or losses on hedges are recorded when the production being hedged has been produced or delivered or the hedge instrument expires. As a result, gains and losses on these hedges are generally offset by similar changes in the price of natural gas and crude oil. Anadarko's hedges currently are comprised of futures, swaps and options. While hedges are intended to reduce the Company's exposure to declines in the market price of natural gas and crude oil, the hedges may limit the Company's gain from increases in the market price of natural gas and crude oil. Capital Expenditures, Liquidity and Dividends During the first nine months of 1994, Anadarko's capital spending (including capitalized interest and overhead) was $337.2 million compared to $180.2 million in the same period of 1993. Capital expenditures in both periods related primarily to the Company's oil and gas exploration and development activities. The increase in capital expenditures for 1994 includes $72 million for offshore leases in the Gulf of Mexico that were acquired in March 1994. Net cash from operating activities for the first nine months of 1994 was $212.8 million compared to $211.6 million in the first nine months of 1993. Anticipated higher cash flows and proceeds from divestitures have led the Company to increase its original capital budget for 1994 from $370 million to $460 million, an increase of 24 percent. The Company's revised spending budget includes increased investments in offshore leases, exploratory drilling onshore and offshore U.S., and construction of platforms and other development facili- ties in the Gulf of Mexico. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) On November 1, 1994, Anadarko closed the sale of a package of Rocky Mountain properties located in Colorado, Wyoming, Montana, North Dakota and Utah for $26 million to Plains Petroleum Operating Company. In addition, in 1994, the Company has received $59 million from the sale of properties in Canada, Arkansas, Louisiana and eastern Oklahoma. The Company believes cash flows and existing available credit facilities will be sufficient to meet capital and operating requirements during the remainder of 1994. However, Anadarko may pursue other financing options to reduce or stabilize interest costs. In May 1994, the Company entered into a $250 million Revolving Credit Agreement and a $150 million 364-Day Credit Agreement with a group of 11 commercial banks. These Agreements replaced the Revolving Credit Agreement entered into in February 1992. As of September 30, 1994, there were no outstanding borrowings under these Agreements. Anadarko's Board of Directors declared a quarterly dividend of seven and one- half cents per share of common stock outstanding. The dividend is payable on December 28, 1994 to stockholders of record on December 14, 1994. Under the most restrictive provisions of the various credit agreements, which limit the payment of dividends by the Company, retained earnings of $244,052,000 and $464,166,000 were not restricted as to the payment of dividends at September 30, 1994 and December 31, 1993, respectively. The amount of future dividends for Anadarko will depend on earnings, financial condition, capital requirements and other factors, and will be determined by the Directors on a quarterly basis. Exploration and Development Drilling During the third quarter of 1994, Anadarko participated in a total of 66 wells, including 36 oil wells, 18 gas wells and 12 dry holes. This compares to a total of 46 wells, including 22 oil wells, 12 gas wells and 12 dry holes during the third quarter of 1993. For the first nine months of 1994, Anadarko participated in a total of 194 wells, including 105 oil wells, 57 gas wells and 32 dry holes. This compares to a total of 126 wells, including 62 oil wells, 39 gas wells and 25 dry holes during the first nine months of 1993. Anadarko made several significant completions during the quarter. Algeria In August 1994, the Company announced the test results from the Berkine East No. 1 (BKE-1) well, located in the Ghadames Basin on Block 404 in Algeria's Sahara Desert. The well tested hydrocarbons from two deeper pay sands not penetrated at the time of the initial discovery announcement in May 1994. The BKE-1 well flow tested at a stabilized rate of 15,275 barrels of oil per day (BOPD) and 3.4 MMcf/d of gas through an equivalent 74/64 inch choke at 1,000 pounds per square inch (psi) flowing tubing pressure from 190 feet of perforations in the Triassic interval. The well flowed 40.6 degree API gravity oil with no water, H2S or CO2. The gas/oil ratio was 225 standard cubic feet per barrel. One of the deeper pay zones flowed at a stabilized rate of 3,693 barrels of 53 degree API gravity condensate per day plus 34.6 MMcf/d of gas through a one inch choke at 2,155 psi flowing tubing pressure from 46 feet of perforations. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Another deeper pay zone tested at 52 barrels of 56 degree API gravity condensate per day and 2 MMcf/d of gas through a 1/4 inch choke at 1,573 psi flowing tubing pressure from 137 feet of perforations. A Discovery Report is being prepared for the BKE-1 well and will be filed with Sonatrach in November 1994. This is the first step towards development of the field. The partners are currently planning a delineation well for the BKE-1 discovery. Golden Trend In the third quarter of 1994, Anadarko reported 13 significant completions from the Golden Trend, located in central Oklahoma. Located in the Antioch Southwest Field in Garvin County, Oklahoma, the Walker "A" #1-33 was reported flowing 94 BOPD and 805 Mcf/d of gas from a 3/4 inch choke with flowing tubing pressure of 100 psi. Anadarko owns a 100 percent working interest in the well. The Bristow "A" #1-34 tested at 79 BOPD and 673 Mcf/d of gas. Anadarko owns a 74 percent working interest in the well. The Reid "C" #1-17 flow tested at 113 BOPD and 891 Mcf/d of gas from a 3/4 inch choke with flowing tubing pressure of 160 psi. Anadarko owns a 100 percent working interest in the well. In Garvin County's Lindsey Southeast Field, the Bonner "A" No. 2-32 tested at 210 BOPD and 1.5 MMcf/d of gas through a 3/4 inch choke with flowing tubing pressure of 350 psi. Anadarko owns a 100 percent working interest in this well. The Paul "A" No. 1-34 flowed 146 BOPD with 1.4 MMcf/d of gas. Anadarko owns a 63 percent working interest in the well. The Wall "B" No. 1-34 flowed 41 BOPD and 1.2 MMcf/d of gas. Anadarko owns a 75 percent working interest in this well. The Simmons "B" No. 1-21 flowed 31 BOPD and 492 Mcf/d of gas. Anadarko owns a 100 percent working interest in the well. From the Bradley Field in Grady County, Oklahoma, the Truman #2-27 flowed 1.6 MMcf/d of gas and 105 BOPD through a 3/4 inch choke with flowing tubing pressure of 220 psi. Anadarko owns a 24 percent working interest in the well. The Alex "A" #1-7 flowed 1.4 MMcf/d of gas and 134 BOPD. Anadarko owns a 96 percent working interest in the well. Also from the Bradley Field in Garvin County, Oklahoma, the Story "B" No. 1-11, Ball "A" No. 1-20, Trioni "A" No. 1-10 and the Reid "B" No. 1-28 combined to produce 490 BOPD and 5.6 MMcf/d of gas on initial test rates. Anadarko operates these four wells with a working interest between 99.5 and 100 percent. Southwest Kansas/Hugoton From the Koenig Field in Haskell County, Kansas, the Yunker "A" No. 8 flowed 188 BOPD. Anadarko owns a 100 percent working interest in this well. From the Gentzler Field in Stevens County, Kansas, the Gaskill "B" No. 2 flowed 1.3 MMcf/d of gas with flowing tubing pressure of 840 psi. Anadarko owns a 100 percent interest in the well. The Gregory "C" No. 2 flowed 1.1 MMcf/d of gas with an absolute open-flow potential of 1.9 MMcf/d of gas. Flowing tubing pressure was 1,250 psi. Anadarko owns an 86 percent working interest in this well. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Two additional wells were completed from the Hugoton Infill Drilling Program. The Bressler "A" No. 1H flowed 318 Mcf/d of gas. Anadarko owns a 75 percent working interest in the well. The U.S.A. Moore "F" No. 2H flowed 385 Mcf/d of gas. Anadarko owns a 100 percent working interest in this well. From the Stirrup Field in Morton County, Kansas, the Kraber "A" No. 1 flowed 2.5 MMcf/d of gas and was reported with an absolute open-flow potential of 20 MMcf/d of gas. Flowing tubing pressure was 500 psi. Anadarko has a 94 percent working interest in the well. Permian Basin/West Texas In the Ketchum Mountain (Clearfork) Field, located in Irion County, Texas, significant flow rates were reported completions on the Sugg Lease in the Ketchum Mountain Clearfork Field. Well No. 33-08 flowed 180 BOPD and 90 Mcf/d of gas through a 19/64 inch choke. Well No. 27-14 flowed 140 BOPD from a 5/16 inch choke. The Sugg No. 27-13 flowed 98 BOPD and 225 Mcf/d of gas through a 1/4 inch choke. Also from the Sugg Lease, the Sugg No. 33-09 flowed 85 BOPD with 80 Mcf/d of gas, Well No. 27-11 flowed 79 BOPD, The Scott #34-15 was reported pumping 53 BOPD and the Sugg No. 27-15 flowed 155 BOPD and 175 Mcf/d of gas. Anadarko owns a 100 percent working interest in the Sugg Lease. Acquisition of Gas Gathering Facilities In October 1994, the Company signed definitive agreements to purchase two separate natural gas gathering systems in the Hugoton Field of Kansas from Panhandle Eastern Corporation for a purchase price of $36 million. This acquisition more than triples Anadarko's current gathering capability, increasing from 155 MMcf/d of gas to 480 MMcf/d of gas. The systems include the Cimmaron River System (CRS) and a portion of the Panhandle Eastern Pipe Line (PEPL) gathering system serving the Hugoton field area, primarily Seward, Stevens and Morton Counties in southwest Kansas and Texas County, Oklahoma. Combined, the gathering systems include approximately 1,500 miles of pipeline in Kansas, Oklahoma and Colorado. The PEPL system includes about 1,150 miles of pipeline and the CRS includes about 350 miles of pipeline. These gathering facilities serve approximately 1,000 Anadarko- operated wells and 200 third-party wells; also included are 21 compressor stations with approximately 82,000 horsepower of compression. Currently, these facilities move more than 325 MMcf/d of gas, with more than 75 percent from Anadarko-operated wells. The CRS gathering system purchase has been approved by the Kansas Corporation Commission and the PEPL gathering system purchase is subject to Federal Energy Regulatory Commission approval. Anadarko began operating the CRS system on October 1, 1994 and expects to close on the PEPL system in 1995. Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description 27 Financial Data Schedule (b) Reports on Form 8-K There were no reports filed on Form 8-K for the three months ended September 30, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized officer and principal financial officer. ANADARKO PETROLEUM CORPORATION (Registrant) November 10, 1994 [MICHAEL E. ROSE] Michael E. Rose - Senior Vice President, Finance and Chief Financial Officer EX-27 2
5 0000773910 ANADARKO PETROLEUM CORPORATION 1,000 9-MOS DEC-31-1994 SEP-30-1994 55,882 0 89,809 0 13,760 159,792 3,525,313 1,539,046 2,177,209 132,009 655,576 5,926 0 0 888,126 2,177,209 362,864 362,864 240,123 240,123 0 0 20,843 58,549 19,499 39,050 0 0 0 39,050 .66 0
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