Anadarko’s cash flow
Anadarko Petroleum (APC) reported CFO (cash flow from operations or operating cash flow) of ~$2.6 billion in the nine months of 2017 (ended September 30), compared with ~$1.9 billion during the first nine months of 2016.
APC’s 3Q17 cash flow from operations
APC’s CFO in 3Q17 was $639 million, compared with ~$785 million in 3Q16 and $857 million in 2Q17. Notably, you’ll see two negative cash flow numbers in the graph above—in 1Q15 and $1Q16.
The lower cash flow in 1Q15 was due to the effect of lower net income in 1Q15, which was lower primarily due to significant impairment charges. The lower cash flows in 1Q16 were affected by lower net income, which was driven by higher operating expenses.
APC’s net income trends
APC’s net loss in 3Q17 was $641 million, compared with a net loss of ~$747 million in 3Q16. Its net loss in the first nine months of 2017, was ~$1.3 billion, compared with a net loss of $2.36 billion in the corresponding period of 2016.
APC’s net loss was lower both on a quarterly and first-nine-month basis in 2017 primarily due to higher revenues.
What about APC’s revenues?
While APC’s revenues in the first nine months of 2017 of nearly $9.0 billion in 2017 were higher than during the first nine months of 2016 revenues of ~$5.5 billion, the improvement in net income was not that significant in the corresponding period of 2017.
High operating expenses in 2017 offset higher revenues, and operating expenses for the first nine months of 2017 came in at nearly $10.0 billion, compared with $7.5 billion during the first nine months of 2016.
What factors affected APC’s cash flows?
While a lower net loss in the first nine months of 2017 set the groundwork for higher cash flow in the first nine months of 2017, higher dry hole expenses drove higher cash flow.
Now let’s take a look at the factors that drove Devon Energy’s cash flow in the first nine months of 2017.