Anadarko 1Q16 Earnings Call Notes

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Anadarko Petroleum (APC) R. A. Walker on Q1 2016

Things feel better than they did 90 days ago

“I think it almost goes without saying that things feel better today than they did 90 days ago, both for our industry and for investors. The very fragile energy capital markets we’ve seen for most of the first quarter appear to be stabilizing, the outlook for commodity prices are improving and I think for industry our operating environment is definitely strengthening. ”

You’re better off buying from a good operator so you don’t inherit legacy problems

“I think the fact that we’ve been a good, prudent operator for a long time, we’re a brand name, if you want to call it that, in our space, when we choose to redeploy capital by exiting a particular property, you’re not taking on problems that you might with a smaller, less well-known company. And that to-date has inured to our benefit, as you’ve seen a very successful effort in the last two years to monetize properties into what I think anyone would describe as a very difficult environment.”

Seeing private equity firms who believe that natural gas is a better place to invest than oil

” If you’ll recall, both in March as well as when we reported our fourth quarter and prior-year results in January, we said at that time, and still believe, that depending upon the private equity firm, there are firms that have a very fundamental view that natural gas is a better place to invest than oil. They look at the activation costs of liquids and oil versus what they think is a fairly good market for natural gas and a good market for those folks, as I listen to them, as they feel very good about ability of natural gas to run to $3 or more from where we are today.”

Robert G. Gwin – Executive Vice President-Finance & Chief Financial Officer

Seen an improvement in asset prices with the environment

“Charles, the only thing I’d add is that the economics you asked about is that Al’s comments on the improving environment is we’ve seen that read-through, I think in particular, yes, on the gas side. We’ve mentioned that a number of the assets that we’re focused on considering the sale of today are gassy. And with the improvement of the forward curve, we’ve seen some strengthening in the interest for those assets. And it doesn’t take a whole lot of improvement on the price side to get some materially better economics at the asset level.”