Anadarko Petroleum posted a full year net loss of nearly US$7 billion, with the anticipation of cutting its initial 2016 budget by some 50%.
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Mozambique operations. Image from Anadarko. |
For Q4, the US-independent suffered a net loss of $1.25 billion, which was increaded by $954 million due to the inclusion of items that are usually excluded.
"As discussed last year at this time, we did not expect oil prices to recover in 2015 and believed it could take well into 2016 before markets would stabilize on a sustained basis,” said Anadarko chairman, president and CEO Al Walker. "As a result, we reduced our year-over-year spending in 2015 by more than $3 billion, down nearly 40 percent from the previous year, with the largest portion of this reduction coming from our short-cycle opportunities.”
The company was able to improve efficiencies and reduce controllable spending by about $500 million, and at the same time improve its base production to deliver an incremental 25,000 b/d per day of higher-margin oil sales volumes. Anadarko also closed $2 billion of monetizations, a much higher estimate that the company’s expectations, Walker said.
Anadarko expects a greater market dislocation for 2016 and is making recommendations to lower costs at nearly 70% lower than two years ago.
“We anticipate recommending to our board an initial 2016 budget of approximately $2.8 billion, which would be nearly 50 percent lower than our actual 2015 capital investments and almost 70 percent lower than 2014,” Walker said.
Anadarko also shared some short-cycle tieback opportunities in the Gulf of Mexico for 2016, which include the Caesar/Tonga field located in Green Canyon 683/726/727/770.
Caesar/Tonga ties back to Anadarko’s Constitution spar, and has a “ribbon-like” structure with a lot of undeveloped reserves that the company can drill, complete, and tieback quickly for a relatively low cost. The wells, which can produce upwards of 6-10,000 b/d, offer tieback opportunities. According to Anadarko, one of the wells has been drilled and is the completion phase. The second is being drilled and will be completed in the 2016, with production expected to begin in Q3 2016.
As for the company’s Shenandoah prospect, located in Walker Ridge 51/52/53, Anadarko said that the company is not interested in developing a project of this size in a $30/bbl price environment. Taking an appraisal or sanction will most likely not happen in 2016, should prices remain low.
In 2015, Anadarko was able to advance its large-scale deepwater projects and exploration, including operations in the Gulf of Mexico, and offshore Africa.
In the Gulf of Mexico, the company achieved first oil at its Lucius development, in addition to its operated Heidelberg spar successfully achieving first oil three months ahead of schedule and under budget.
The company completed the Shenandoah-4 sidetrack well, where 620ft of high-quality oil pay as found, in addition to acquiring more than 550ft of whole core from the hydrocarbon-bearing reservoir terminal. Next up is the Shenandoah-5 appraisal well in Q1 2016.
Anadarko’s completed drilling at the Yeti-3 appraisal well, located in Walker Ridge 117/157/158/159/160, in Q4 and encountered more than 320ft of whole core acrossthe primary Miocene-aged reservoir intervals. The partnership is currently evaluating potential development options for the Yeti discovery.
Offshore Africa, Anadarko progressed at its Mozambique LNG project by entering a unitization and unit operating agreement with Eni for the development of the natural gas resources that straddle Offshore Area 1 and Offshore Area 4; signing a memorandum of understanding with the government of Mozambique to provide natural gas from the development for domestic use; selecting a contractor for the initial onshore development; and progressing more than 8 MTPA of LNG offtake to long-term sales contracts.
Offshore Ghana, the Tullow-operated TEN development was more than 80% by the end of 2015, and is on track to achieve first oil in Q3 2016.
Full sales volumes of proved reserved stood at 305 MMboe, or about 836,000 boe/d for full year 2015. For Q4, sales volumes averaged approximately 779,000 boe/d.
Anadarko said the company organically added 407 MMboe of proved reserves in 2015 before the effects of price revisions and incurred oil and natural gas exploration and development costs of approximately $5.8 billion.The company estimates its proved reserves at year-end 2015 totaled approximately 2.06 billion boe, with nearly 80% of its reserves categorized as proved developed.
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