Company Report

Anadarko corporate report

31 October 2018

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31 October 2018

Anadarko corporate report

Report summary

Anadarko has fully embraced the industry trend of prioritising shareholder returns, and the market has responded positively. However, it now finds itself at a strategic crossroads. As the Permian grows in prominence within its portfolio – it looks increasingly like a US onshore pure player. Cuts to its budget outside of the Lower 48 have raised questions about the future of its conventional assets and its international exploration program.

Other Anadarko research
Executive summary
Strategy
- Recent strategic moves
- Peer leading shareholder returns boost market performance
- Tight oil now dominates Anadarko's portfolio
- Strategic priorities
  - Striking a balance between shareholder returns and growth
  - Low corporate cashflow breakeven provides options
  - Asset sales could fortify the balance sheet
  - An uncertain outlook for deepwater Gulf of Mexico
  - The Permian is Anadarko's primary growth platform
  - DJ Basin activity to slow
  - Powder River Basin Niobrara – a new growth play?
  - Is conventional exploration off the agenda?
  - Rumours Anadarko will divest Mozambique LNG persist
Valuation
- Wood Mackenzie base case valuation metrics
Investment
- Wood Mackenzie base case investment and cost metrics
Production
Reserves and resources
- Wood Mackenzie base case reserves and resources metrics
Economic assumptions

Tables and charts

This report includes 43 images and tables including:

SWOT analysis
Production: Image 1
Liquid production

Gas production
Base price assumptions (nominal terms)
High price assumptions
Low price assumptions
Valuation assumptions
Foreign exchange rate assumptions
Relative share price performance
Benchmark: market premium / discount to Wood Mackenzie NPV,10
Strategic fit of upstream regions
Benchmark: new project returns
Benchmark: % of NPV by resource theme
Upstream EV vs. Upstream NPV,10
Upstream portfolio sensitivities vs. NPV,10
Current NPV,10 vs. Future NPV,10
Base case upstream NPV,10
Forecast development expenditure (nominal)
Forecast operating expenditure (nominal)
New project returns
Reported development costs
Total reserves; Wood Mackenzie commercial
Total reserves: reported vs. Wood Mackenzie
Total reserves: reported vs Wood Mackenzie
Reserve life: reported vs Wood Mackenzie
Combined shareholder returns (2018)
Indexed production
Reported gearing (end Q2 2018) vs. break even
Net debt outlook
Remaining NPV by country/region
Cash flow by country/region
Benchmark: Deepwater GoM production
Anadarko: Base-case cash flow under different scenarios
Anadarko's Unconventional cost curve: Wolfcamp is jewel in the crown
Anadarko: production by country
Benchmark: Permian remaining risked resource by play
Benchmark: DJ Basin Niobrara remaining risked resource by well type breakeven (US$/bbl WTI)
Benchmark: DJ Basin Niobrara production
Powder River Basin operator activity map (wells completed 2013-2018)
Anadarko: volumes discovered
Benchmark: Conventional value creation vs. exploration spend 2013-2016
Top assets by value