Anadarko on Track for H1 FID
US independent Anadarko expects to take a final investment decision (FID) on its Mozambique LNG project in first half 2019, CEO Al Walker said July 31 announcing the company's quarterly results.
Walker thus confirmed an FID target disclosed by Anadarko's international upstream head Mitch Ingram at the World Gas Conference in June. The company had previously talked of FID by March 2019.
"Our Mozambique LNG project has made excellent progress," said Walker. This includes significant cost reductions allowing the first two onshore liquefaction trains with a total of 12.88mn metric tons/year capacity to produce at under $600/mt. So far it has sold just over half of that, 6.7mn mt/yr, on an inflexible, ex-ship basis, subject to FID and certain other agreements, to a mix of Asian and European buyers.
Anadarko reported Q2 net income attributable to common stockholders of $29mn, with exceptional items knocking off $249mn. US onshore oil output was up 47% on a divestiture-adjusted basis, and margins were better by almost 50% year on year. It also bought back shares worth $3bn.
Walker said: "The strong operational results and actions we have taken to enhance shareholder value reinforce our strategy to deliver capital-efficient growth and generate improved returns. While we have not increased our operated activity level, the current commodity-price environment has resulted in some modest service-cost inflation, as well as an increase in non-operated activity and non-consents, which present very high-return opportunities for Anadarko.... We have also continued to core up acreage in the Delaware and DJ basins, which has enabled us to drill longer laterals with higher working interest for enhanced returns. Accordingly, we are increasing our anticipated full-year capital-investment expectations by $250mn from previous guidance."
It sold 58mn barrels of oil equivalent (boe) in Q2 2018, or an average of 637,000 boe/d, which was at the high end of the company's second-quarter guidance.
In the DJ Basin of northeast Colorado, Anadarko continues its horizontal drilling campaign featuring natural-gas powered rigs and noise-reduction technology, two enhancements that improve the compatibility of operations with local communities. During the quarter, the DJ Basin averaged net production of 261,000 boe/day.