Oil, gas companies report earnings; Anadarko to add rigs in Weld | MyWindsorNow.com

Oil, gas companies report earnings; Anadarko to add rigs in Weld

Sharon Dunn
sdunn@greeleytribune.com

Weld County's two largest oil and gas producers continue to hemorrhage money, but both companies are indicating a turnaround is near.

Anadarko Petroleum and Noble Energy released their third-quarter earnings Monday and Tuesday, noting substantial losses for the quarter and the first nine months of the year.

Both global companies are selling billions in assets, while painting a rosier picture of a forthcoming robust 2017.

Both posted growth in sales volumes, but they also walked away from the quarter with net losses. Anadarko, which posted an $830 million loss in the quarter, reached record sales volumes of roughly 248,000 barrels of oil equivalent per day out of its Denver-Julesburg Basin operations in Weld — an almost 13 percent increase from the same time last year.

“Tremendous performance has ensured a bright future for Noble Energy.

— David Stover, Noble president and CEO

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Noble reported a net loss of $144 million for the quarter, but reported 113,000 barrels of oil equivalent per day in its DJ operations. Combined volumes in two hot areas in Weld made up 59,000 barrels of oil equivalent per day, an 11 percent increase, according to a Noble news release.

The companies, however, are reporting smaller losses than they were last year at the same time.

During a call with analysts Tuesday, Anadarko officials concentrated on how the company will move forward through next year, focusing on three primary plays.

"We've also positioned the portfolio for the future with our assets in the Delaware, DJ and the Deepwater Gulf of Mexico, serving as the primary sources for our growth," said Anadarko President and CEO Al Walker in the call. The company has spent the past several months selling $3 billion in assets, with another $1 billion asset sale to go — and one lucrative acquisition in the Gulf of Mexico, which will allow the company to double down on its three D's.

Weld County sits smack dab in the middle of the Denver-Julesburg Basin.

Walker said the company, which has been operating one drilling rig in Weld all year, added two rigs this month and plans to add two more before the end of the year. That's essentially saying they plan to put a total of 400 people to work. Noble officials, on the other hand, have announced a third round of layoffs before the end of the year.

In its earnings release Tuesday, Noble President and CEO David Stover touted the company's "continued outstanding production performance and cost control." The company notes it sold $1.5 billion in assets this year, which has helped pay down debt. That allowed the company to add rigs in its Texas assets.

"Tremendous performance has ensured a bright future for Noble Energy," Stover said in the release. The company will have its earnings call today, where officials will talk more about their earnings results.

While Anadarko plans to end the year with five or even six rigs in Weld, Noble has two rigs. In Weld, wells have a mix of oil, natural gas and natural gas liquids, some heavier on the oil side, others heavier on the gas side.

Anadarko officials reported they will concentrate more on their oil-heavy assets in the future, as oil prices rebound somewhat from decade-long lows. Natural gas prices, however, continue to stay low, hovering around $3 per million British thermal units.

"It's not really in our best interest to pursue natural gas," Walker told analysts. "I don't mind being wrong, but I think our view is that it would take natural gas to approach $6 before it would probably displace our interest in investing in oil, and I don't see that happening."

Earnings webcast

Noble Energy offiicials will have an earnings call with analysts at 7 a.m. Wednesday. The webcast link is accessible on the ‘Investors’ page at http://www.nobleenergyinc.com. A replay will be available on the website, the company reports.