Anadarko Petroleum Corporation (NYSE:APC) Q4 2014 Earnings Conference Call - Final Transcript

Feb 03, 2015 • 09:00 am ET


Anadarko Petroleum Corporation (NYSE:APC) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Anadarko's Year End 2014 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

I would now like to turn the conference over to your host today, John Colglazier. Please go ahead, sir.

John Colglazier

Thank you, Michelle. Good morning, everyone. I'm glad you could join us today for Anadarko's year-end 2014 conference call. And also before we get started, I want to make sure you have on your calendars, our conference call scheduled for March 3, where we will provide our 2015 guidance and key performance metrics.

(Forward-Looking Cautionary Statements)

At this time, I'll turn the call over to Al Walker. And following his remarks, we will open it up for questions for Al and our executive team. Al?

Al Walker

Thanks, John, and good morning. As I shared with you Anadarko's 2014 highlights, a few thoughts on 2015. I hope you've come away with two prevailing themes. First, we believe the portfolio we've designed coupled with our approach to capital allocation and portfolio management has shown the ability to deliver outstanding results, and it will continue to serve our shareholders well in the future. Second, we're approaching 2015 with a great deal of caution, as our

Al Walker

companies, but Anadarko will focus on preserving value and flexibility rather than chasing growth in a lower return environment. Our operational performance in 2014 was outstanding. Anadarko's employees delivered a tremendous year across the board. On the divestiture adjusted basis, we grew sales volumes by more than 11% year-over-year; even more impressively, we increased our liquids volumes like 26%.

The significant growth was achieved while generating almost a $150 million of free cash flow. Anadarko replaced more than 160% of it's reserves and continue to be one of the lowest cost operators in our industry, while improving upon industry-leading safety performance. We did this while monetizing more than $2.5 billion of assets, completing a $335 million secondary offering of WGP common units, increasing our dividend by 50% and settling the frustrating Tronox advisory proceedings.

Our US onshore operations were nothing short of incredible led by the Wattenberg Field and the Eagle Ford Shale, resulting in full year volumes growth of 16%. This is more than 90,000 BOEs per day over our average sales volumes for 2013 on a divestiture adjusted basis.

Wattenberg's growth has surpassed even our expectations. You might recall during 2013, this asset had grown to more than 100,000 BOE per day and in 2014, volumes grew another 60,000 BOE per day or about 55%. Wattenberg's exceptional performance was facilitated by the quarrying up of our acreage position, outstanding standing reservoir performance, improved efficiencies, enhanced drilling and completions, and importantly, the investments we made in key infrastructure expansion.

Now we've taken that same model and are working to replicate the success in the emerging Wolfcamp