Anadarko cuts capital program in half for 2016, won’t spend cash it doesn’t have, says CEO

By Lisa Kerner

Charlotte, N.C., March 1 – Anadarko Petroleum Corp. is cutting its year-over-year capital investments by about 50% in 2016, to between $2.6 billion and $2.8 billion, from $5.4 billion in 2015, as a means to preserve value.

Tough conditions for the industry are creating “lots of challenges” for the company, according to chairman, president and chief executive office Al Walker.

Walker wants Anadarko to get through 2016 with the fewest number of “bumps, bruises, scrapes (and) scratches” as possible.

“Practically, we plan to improve our financial strength by building cash throughout the year, selling noncore assets, having ample liquidity and cash, and having additional credit facilities being able to be available to us,” said Walker during a conference call with investors on Tuesday.

The company had $900 million of liquidity plus cash on hand at year-end, as well as a $3 billion five-year revolving credit facility and a $2 billion 364-day facility, according to the call presentation.

Anadarko plans to refinance near-term maturities in about six months and could possibly use cash to retire debt, Walker said during the question and answer portion of the call. He believes there is about $2 billion available in the market for Anadarko.

Anadarko has monetized $1.3 billion of assets year to date and has monetized more than $30 billion since 2006. The company plans to monetize up to a total of $3 billion of assets in 2016.

In addition to cutting capital spending and selling assets, the company is focused on net debt reduction and has reduced its dividend to free up about $450 million of cash.

Walker emphasized “if we don’t have the cash, we won’t spend it.”

Anadarko is an oil and gas exploration and production company based in the Woodlands, Texas.

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