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Upstream Operational Risk Increases with Anadarko’s $2B Purchase

The Quandl data science team now publishes market insights based on analysis performed using Quandl alternative datasets. For information about our alternative datasets, or to request sample data, please see the contact information at the bottom of this post.

On Monday, September 12 2016, Anadarko (NYSE:APC) announced it has entered into a definitive agreement to acquire the deepwater Gulf of Mexico assets of Freeport McMoRan Oil & Gas for $2.0 billion. This transaction, set to close before year’s end, doubles Anadarko’s ownership in the Lucius development to approximately 49 percent.

Quandl’s Anadarko Production Tracker empowers investors to see real time production performance at the Lucius offshore deep water facility. Quandl’s data supports Anadarko’s positive outlook at Lucius. Natural gas production delivered to Discovery Gas Transmission from Anadarko has been flowing at capacity since the asset came online in April 2015. Anadarko also announced that the oil volume has exceeded nameplate capacity at Lucius.

apc_lucius_chart1

However, our data also shows that there have been several interruptions to gas flow. Lucius’s gas delivery to Discovery Gas Transmission via the Keathley Canyon Connector usually flows at capacity, and fluctuates between 420-450 mmcf/d. The chart below shows the number of days when the flow is below 300 mmcf/d. The interruption in the third week of April 2016 coincides with downstream maintenance at the Larose processing plant. The other days with disruption are likely associated with upstream operational issues. Natural gas production disruption was frequent during the first half of 2016. As Anadarko’s interest in the Lucius facility increases, revenue will become more dependent on operational stability.

 

apc_lucius_chart2

About the Data

By leveraging natural gas interstate pipeline data, Quandl is able to track daily natural gas production for E&P companies in real time. This information allows investors to evaluate producers’ performance more than two months before quarterly earnings. Quandl is able to provide production insights by basin. Coupled with oil to gas ratios, investors can predict if the risks of producers over or under perform relative to the guidance.

Next Steps

Contact Clayton Feick (clayton@quandl.com) for more information, to obtain a full sample report, or to test the data.

Disclaimer

This material has been prepared by Quandl, Inc. This post and its associated sample report (available on request) is for information and illustrative purposes only and does not purport to show actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only and are subject to change without notice. Quandl shall not have any liability for any damages of any kind whatsoever relating to this material. By accepting this material, you acknowledge, understand and accept the foregoing.

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