Anadarko 2018: $900M+ to Delaware, DJ Basins

By Luke Geiver | November 20, 2017

Anadarko Petroleum Corp. will spend more than $900 million next year in both the Delaware Basin and the DJ Basin—two of the most active shale plays in the U.S. The investments planned for 2018 will be inside of discretionary cashflows at $50 oil and $3 natural gas prices while still generating $700 million at the current strip.

In addition to its investments in the Delaware Basin and the DJ Basin, Anadarko will also continue its share-repurchase program next year, working to buy-back roughly $1.5 billion. Al Walker, president and CEO of Anadarko, also said the company will modify its 2018 compensation program “to increase the profile for the role of capital efficiency and financial discipline and refine the focus on our safety performance.”

Performance objectives will now include, Walker said, cash return on invested capital, volume growth per debt-adjusted share, and reserve additions per debt-adjusted share. In addition to the new compensation process and the share buyback program, Anadarko has said it will increase its dividends over time and that it will be opportunistic with debt reduction.  

Onshore Focus

The company has delineated much of its Wolfcamp A acreage. The Wolfcamp acreage holds more than 3 billion barrels of oil equivalent. The Wolfcamp will continue to see the company’s focus next year. In the Delaware, the company will run 7 drilling rigs and 6 frack crews to start the year.

The work in the Delaware is all part of Anadarko’s plan develop what it calls its onshore mega project. The project includes establishing local workforce, trading for 35,000 acres and delineating the core Wolfcamp A, all of which has been checked off the mega project to-do list. Next up on the project list is adding 120 mbopd of additional oil treating capacity, adding 600 Mmcf/d of additional gas processing and adding 700 mbl/d for water disposal.

In the DJ Basin, Anadarko will start the year running five drilling rigs and three frack crews.

Outside of the U.S. onshore, the company will spend $150 million on operations in Algeria and Ghana. In the Gulf of Mexico, the company will invest $200 million in exploration efforts.