Anadarko planning to monetize $3 billion in assets in 2016
Anadarko Petroleum Corporation says it is cutting back in West Texas and the Denver-Julesberg basin while it waits for a more “compelling price environment.”
“In 2016, we will continue our disciplined and focused approach, preserving and building value by leveraging our best-in-class capital allocation, enhancing operational efficiencies and continuing an active monetization program,” said CEO Al Walker.
- Reduces year-over-year capital investments by almost 50 per cent
- Expects higher-margin oil sales volumes to be flat year over year on a divestiture-adjusted basis
- Doubles Delaware Basin recoverable resource estimate to more than 2 billion barrels of oil equivalent (BOE)
- Announces plans to monetize up to $3 billion of assets in 2016, with $1.3 billion announced or closed year to date
“We are committed to again investing well within cash inflows from a combination of anticipated discretionary cash flow and our ongoing monetizations, with the expectation of also reducing net debt during the year,” said Walker.
“As we announced last week, we have already closed or announced monetizations totaling approximately $1.3 billion, and we expect our cash position to be further strengthened during the year through substantial cost reductions and additional identified monetization opportunities. We will also benefit from the recent action by our Board to reduce our dividend, which will provide approximately$450 million of additional cash this year.”
U.S. ONSHORE
Anadarko’s U.S. onshore activities will be reduced the most, by almost $2.5 billion in capital investments year over year, as the company preserves its opportunities, including in two of the highest-returning onshore assets in North America – the Delaware and DJ basins – for a more compelling price environment.
The company is reducing its U.S. onshore rig count by 80 per cent to five operated rigs, from an average of 25 in 2015, while focusing on its base production and retaining the flexibility to leverage its inventory of approximately 230 drilled but intentionally uncompleted wells.
In the Delaware Basin, Anadarko plans to run four operated rigs, which will be directed toward delineation and lease maintenance rather than development activities.
GULF OF MEXICO
Anadarko’s 2016 Gulf of Mexico program will focus on the company’s capital-efficient tieback oil opportunities, as well as on advancing appraisal activities.
By leveraging its existing infrastructure, Anadarko’s tieback opportunities offer returns of more than 30 per it cent at today’s strip prices. These activities will include tiebacks at Lucius, Caesar/Tonga and K2.
INTERNATIONAL
In 2016, Anadarko’s planned international activity will include efforts to advance its Paon oil discovery offshore Côte d’Ivoire toward potential development with one appraisal well, a drillstem test, and two exploration wells.
Once activities are completed in Côte d’Ivoire, the rig is scheduled to return toColombia to conduct additional exploration drilling activities. Offshore Ghana, the company expects to achieve first oil at the TEN complex in the third quarter of 2016.