Anadarko released its second quarter financials this week, announcing a 73% decrease in profits over last year and a reluctance to pinpoint when they will return to growth mode.
Related: Anadarko Reduces 2015 Spending by 30%
During a conference call on Wednesday, CEO Al Walker expressed the caution felt by many in the industry as crude prices continue to fluctuate. Margins remain low for the company as costs outstrip service providers' ability to cut prices.
The uncertainty is particularly acute around operations in the shale plays, including the Eagle Ford. Walker was hesitant to commit to a timeline for moving back into a growth mode in the shale plays, saying that they do multi-year planning and can’t make predictions based on quarterly results.
“shale plays “deplete 50% to 80% in the first year, so there we have to be very confident of the margin environment that we’re moving into, because we’re not going to be able to capture that on the back side of the well, since so much of the production will have occurred. So that’s why I’m a little hesitant and cautious about exactly when we’ll see this company in particular and industry more broadly be encouraged to go back into a growth mode.”
Anadarko is one of the Eagle Ford’s largest producers, with roughly 388,000 gross acres in Dimmit, LaSalle, Maverick and Webb Counties.
Second Quarter Highlights
- Drilling efficiencies improved in the Eagle Ford
- Company will do new testing in the upper and middle Eagle Ford
- Expects to achieve its objective of drilling more than 200 wells this year
- Increased year-over-year oil sales volumes by 42,000 barrels per day
- Achieved large-scale project milestones in the Gulf of Mexico and Mozambique
- Announced deepwater exploration success in a frontier basin offshore Colombia
- Announced more than $1.7 billion of monetizations year to date