Citing downturn, Anadarko halves capital spending to $2 billion for 2002

By the OGJ Online Staff

HOUSTON, Jan. 14 -- Anadarko Petroleum Corp., Houston, plans a 2002 capital spending budget of $2 billion -- 50% of 2001 capex.

John N. Seitz, president and CEO of Anadarko, said though 2001 was a good year, the company's fourth quarter results will reflect a downturn in the industry. "It's simply the wrong time in the commodity price cycle to build organic production growth. Instead, now is the time to buy back stock, build reserves, and build our inventory of drilling locations to take advantage of the next upturn in oil and gas prices."

The 2002 budget would include $500 million for exploration. The company said the drilling program gives exposure to potential net reserves of more than 2 billion bbl (unrisked).

"Flexibility is the common theme for our 2002 strategic plan. We have a proven record of success with exploration, and we have a great inventory of ready-to-drill locations," Seitz added.

Actual spending could vary considerably depending on commodity prices.

Preliminary 2001 results are for fourth-quarter earnings of 25¢/share diluted and full-year earnings of $3.25/share, or about $5.05/share excluding the third-quarter ceiling test write-down.

Last year's production was up more than 75% over 2000 to 199 million boe and proved reserves rose about 10%, with reserve replacement of more than 2:1.

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