Anadarko Petroleum 4Q16 Earnings Call Notes

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RA Walker

Oil could average $60 in 2017

“From a global perspective, we’re beginning to see some encouraging demand improvements and supportive supply actions. And I continue to feel strongly that we have very good chance to see an average WTI oil price in 2017 of $60. When you combine our cash position with improving cash flows, we expect to be in an advantageous position to fund growth in both the Delaware and the DJ as well as the deepwater.”

Allocating to the DJ and Delaware

“As you look at us today, to be somewhat repetitive, I think the Delaware, the DJ, and the deepwater Gulf of Mexico, in that order of priority, will receive capital. As I mentioned in my prepared remarks, we have built a very attractive cash position, which we believe will allow us to execute on the development plans we have for the two primarily – the two onshore assets rather. And I think while we are very proud of them, I’m not sure there are any other assets onshore that are any better than the DJ and the Delaware to be allocating capital to.”

Doing a lot of planning for 2018, 19

“I will say, whether it’s the deepwater or it’s the onshore, 2017 is a year in which we’re doing a lot of things to prepare ourselves for 2018 and 2019. And that’s one thing as we come out of a trough, we just can’t immediately turn on a dime and expect that we’re going to go back to where we were before we went through the period of the last two years where the industry in general spent a lot less capital and had a lot less activity. ”

You’re not going to get a tremendous supply response until 2018, 19

“The only thing that I would say that’s a little surprising to me would have been that, if you recall, I thought domestic oil production in the U.S. would probably bounce off 8 million barrels a day, and we actually bounced a little higher than that. But I think – I use our own company as a bit of an analogy for this comment. I don’t think even with the rigs that are all starting to stand up, particularly in the Permian, and if you look even at what ExxonMobil has said about it this week, you couple that together, and it’s not like in 2017 you’re going to see a tremendous supply response that will dwarf the improving demand. I think that’s really more something to look at in 2018 and 2019. And it’s a little fuzzier when you look into the crystal ball at that point.”