Anadarko’s Asset Monetization Program Key to Revenue Growth



Anadarko’s 2Q16 revenue

Anadarko Petroleum (APC) reported its 2Q16 earnings on July 27, 2016. Anadarko’s 2Q16 revenue was $1.98 billion, against an estimate of $1.93 billion. Revenue in 2Q15 was ~$2.5 billion, and in 1Q16, it was $1.7 billion.

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Anadarko’s 2Q16 earnings

Anadarko Petroleum reported an adjusted net loss of $304 million in 2Q16. Adjusted net income in the corresponding period in 2015 was $4 million. In 1Q16, Anadarko Petroleum reported an adjusted net loss of $569 million.

The company reported adjusted EPS (earnings per share) of -$0.60, whereas the Wall Street analyst consensus estimate for EPS was -$0.79. As we can see in the above graph, Anadarko’s earnings and revenues came in better than expected.

Peer comparison

Peers Apache (APA) and Continental Resources (CLR) haven’t announced their 2Q16 earnings yet. Analysts expect the EPS for these companies to come in at about -$0.17 each. Keep checking in with Market Realist for earnings coverage on these companies.

Notably, the above companies make up ~6.3% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

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Key 2Q16 highlights

Year-to-date, APC closed asset monetizations worth ~$2.5 billion. One of Anadarko Petroleum’s key management objectives is to maintain the strength and flexibility of its balance sheet. The key to this is the company’s asset monetization program. The asset monetizations target laid out at the beginning of the year was in the range of $2 billion–$3 billion. The updated target is now $2.5 billion–$3.5 billion.

APC’s 2Q16 earnings release noted, “We intend to use sales proceeds to retire debt, including the remaining $750 million of 2017 maturities. In addition, should the commodity price outlook continue to improve, we will evaluate redeploying some of the additional cash generated via operations and asset sales toward our highest-quality US onshore opportunities.”


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