Anadarko announces outlook for 2008
Anadarko Petroleum Corporation (NYSE:APC) announced the details of its 2008 capital budget and provided production estimates for 2008. Anadarko's Board of Directors has approved total capital expenditures, including expensed exploration, of $4.5 to $4.7 billion. The capital program includes approximately 20% for exploration activities.
"Anadarko's 2008 capital program is geared toward accelerating the value of the more than 7 billion BOE (barrels of oil equivalent) in net risked captured resources in our asset base," said Jim Hackett, Anadarko President, Chairman and CEO. "Exploration remains a key component of the program, which also leverages our industry-leading deepwater rig position, hub-and-spoke infrastructure in the Gulf of Mexico and extensive midstream position onshore. Through a combination of our product hedging strategy, basis swaps and firm transportation commitments, we've reduced risk and ensured that we will have adequate cash flow to fund our capital program while continuing to reduce leverage. A focus on capital efficiency, reduced costs and reserve growth will continue to drive our investment decisions and portfolio management."
The company also increased its guidance for expected 2008 oil and natural gas production to the range of 205 to 210 million barrels of oil equivalent, as detailed in the guidance schedule attached to Anadarko's fourth-quarter and year-end 2007 earnings release.
Anadarko's capital budget for 2008 reflects the company's commitment to accelerate the value of its net risked captured resources with a particular emphasis on achieving double-digit production growth in the Rocky Mountain region. An approximate breakout of the company's 2008 capital budget by area is provided below:
- 30% Rocky Mountains
- 20% Southern U.S.
- 25% Deepwater Gulf of Mexico
- 15% International and Frontier
- 10% Midstream
The majority of the 2008 budget will focus on Anadarko's inventory of development opportunities in the resource plays of the Rocky Mountain and Southern regions. Approximately 2,700 to 3,000 U.S. onshore development wells are planned in 2008, comprised of approximately 85% in the Greater Natural Buttes, Wattenberg, Powder River Basin and other areas in the Rocky Mountains, and approximately 15% in the company's Southern region including the Delaware Basin, eastern Chalk and Carthage areas of Texas.
Anadarko has identified thousands of low-risk opportunities onshore in the U.S., including infill drilling, re-completions and other repeatable projects capable of delivering double-digit production growth in the Rocky Mountain region for years to come. During 2007, the company also expanded its midstream infrastructure in the Rockies to enhance its ability to execute upon its development and production activities. Two major projects scheduled to commence in 2008 will further expand processing and gathering capabilities in the area. The first involves the second-phase expansion of the Chapita plant in Greater Natural Buttes, which will add a cryogenic processing facility that will double Chapita's current processing capacity to 500 million cubic feet per day (MMcf/d). The other significant project will add 400 MMcf/d of gathering capacity at the Fort Union system, bringing its total capacity to 1.3 billion cubic feet per day (Bcf/d) and making it the largest capacity gathering system in the Powder River Basin.