Anadarko Petroleum Corp. (NYSE: APC) reported adjusted fourth-quarter earnings that were less than half of analysts’ estimates as output growth slowed in Colorado and some wells delivered more natural gas than expected, Bloomberg reported Feb. 2.
Net income excluding one-time items such as hedging losses was $188 million, or 37 cents a share, 45 cents below the average estimate of 29 analysts compiled by Bloomberg. Output from U.S. land wells rose 14% to 673,000 barrels of oil equivalent a day, the Woodlands, Texas-based company said in a Feb. 2 release.
Production in the Rocky Mountain region didn’t rise as quickly as in previous quarters, and some wells produced more gas than oil, a factor that can reduce profits, James Sullivan, an analyst with Alembic Global Advisors in New York, said in a telephone interview Feb. 2.
Falling prices for NGL such as ethane and propane, which are produced in abundance in Colorado, were also a factor, Sullivan said.
Anadarko joins Hess Corp. (NYSE: HES) and Occidental Petroleum Corp. (NYSE: OXY) in reporting a net loss for the quarter without adjustments, showing the challenge facing U.S. producers as oil prices fell 42% during the last three months of 2014.
Royal Dutch Shell Plc (NYSE: RDS-A, RDS-B), ConocoPhillips Co. (NYSE: COP) and other major producers have announced more than $20 billion in cuts and tens of thousands of layoffs as they adjust to new market conditions. Anadarko didn’t make any announcements dealing with plans to reduce activity.
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