SOURCE: Anadarko Petroleum Corporation

Anadarko Petroleum Corporation

November 04, 2013 16:00 ET

Anadarko Announces Third-Quarter 2013 Results

HOUSTON, TX--(Marketwired - Nov 4, 2013) - Anadarko Petroleum Corporation (NYSE: APC) today announced third-quarter 2013 net income attributable to common stockholders of $182 million, or $0.36 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $389 million, or $0.77 per share (diluted), on an after-tax basis.(1) Cash flow from operating activities in the third quarter of 2013 was approximately $1.779 billion, and discretionary cash flow totaled $2.020 billion.(2)

Third-Quarter 2013 Highlights

  • Announced $2.64 billion transaction for the sale of a 10-percent working interest in Mozambique's Offshore Area 1
  • Achieved record U.S. onshore sales volumes of approximately 590,000 barrels of oil equivalent (BOE) per day
  • Delivered 30,000-BOE-per-day growth in the Wattenberg horizontal program, more than doubling year-over-year sales volumes
  • Reached project milestones with the installation of the Lucius spar in the Gulf of Mexico and the initiation of oil production from the second El Merk train in Algeria
  • Increased activity in the Delaware Basin Wolfcamp play in West Texas

"We continue to demonstrate our commitment to value acceleration and portfolio management," said Al Walker, Anadarko Chairman, President and CEO. "During the third quarter, we announced the $2.64 billion monetization of a portion of our working interest in Mozambique, and more recently, announced a strategic acreage exchange in the Wattenberg field that is expected to enhance our operating efficiencies and concentrate our core acreage position near our operated infrastructure. In addition, we expanded our ownership position in the emerging Shenandoah Basin of the deepwater Gulf of Mexico by more than doubling our working interest in the Coronado discovery. We also ramped up Wolfcamp activity in West Texas, which continued to deliver high liquids yields and strong initial production rates."

Operations Report
For details on Anadarko's operations and exploration program, please refer to the comprehensive report on third-quarter 2013 activity. The report is available at www.anadarko.com.

Operations Summary
During the third quarter, Anadarko increased U.S. onshore sales volumes by approximately 61,000 BOE per day over the third quarter of 2012, which includes an approximate 16-percent increase in liquids volumes. The Wattenberg horizontal program, where Anadarko more than doubled sales volumes over the third quarter of 2012, was a significant contributor to this growth. The company also achieved substantial growth in the Eagleford Shale in South Texas and the liquids-rich East Texas horizontal development.

Anadarko also increased activity in the Wolfcamp play in the Delaware Basin of West Texas during the quarter, currently running six operated rigs, compared to none in the third quarter of 2012. Wolfcamp results have been very encouraging with six wells now on production. Each well has demonstrated initial production rates of between 1,000 and 1,600 BOE per day of gross processed production with oil comprising more than 70 percent of the product mix.

Mega-Project Summary
Anadarko installed the 80,000-barrels-of-oil-per-day (BOPD) Lucius spar on location in the deepwater Gulf of Mexico in August. The company initiated well-completion activities at Lucius during the quarter, and the project remains on schedule, with first oil production expected during the second half of 2014. Leveraging a design-one, build-two strategy, Anadarko progressed construction on the hull of the 80,000-BOPD Heidelberg spar, which is now nearly 50-percent complete. Heidelberg remains on schedule for initial oil production anticipated in 2016.

In Algeria, Anadarko and its partners achieved initial oil production from the second El Merk train and continued to advance the third facility, which is on schedule to commence production during the fourth quarter of 2013.

Exploration Summary
Anadarko drilled two successful appraisal wells in Mozambique during the third quarter. The Golfinho-5 and Golfinho-6 wells encountered approximately 330 net feet and approximately 240 net feet of natural gas pay, respectively. Both wells appear to be in static communication with the rest of the Golfinho field. The Golfinho appraisal program is expected to be completed this year.

In the Gulf of Mexico, Anadarko enhanced its working interest in the Shenandoah Basin by increasing its stake in the Coronado discovery from 15 to 35 percent. Anadarko will assume operatorship of Coronado after the next appraisal well is drilled.

Conference Call Tomorrow at 8 a.m. CST, 9 a.m. EST
Anadarko will host a conference call on Tuesday, Nov. 5, 2013, at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) to discuss third-quarter results, current operations and the company's outlook for the remainder of 2013. The dial-in number is 855.812.0464 in the United States, or 970.300.2271 internationally. The confirmation number is 75022312. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will be available on the website for approximately 30 days following the conference call.

Financial Data
Eight pages of summary financial data follow, including current hedge positions and updated financial and production guidance.

(1) See the accompanying table for details of certain items affecting comparability.

(2) See the accompanying table for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measures provide useful information for investors. 

Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2012, the company had approximately 2.56 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, please visit www.anadarko.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including Anadarko's ability to consummate the transaction described in this news release, achieve its production targets, successfully manage its capital expenditures, timely complete and commercially operate the projects and drilling prospects identified in this news release, and achieve production and budget expectations on its mega projects. See "Risk Factors" in the company's 2012 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

 
Anadarko Petroleum Corporation
Certain Items Affecting Comparability
 
    Quarter Ended September 30, 2013
    Before   After   Per Share
millions except per-share amounts   Tax   Tax   (diluted)
Unrealized gains (losses) on derivatives, net*   $ (36 )   $ (21 )   $ (0.04 )
Gains (losses) on divestitures, net     8       5       0.01  
Impairments     (593 )     (376 )     (0.74 )
Third-party well and platform decommissioning obligation     10       6       0.01  
Deepwater Horizon settlement and related costs     (5 )     (3 )     (0.01 )
    $ (616 )   $ (389 )   $ (0.77 )

* For the quarter ended September 30, 2013, before-tax unrealized gains (losses) on derivatives, net includes $(120) million related to commodity derivatives, $74 million related to interest-rate and other derivatives, and $10 million related to gathering, processing, and marketing sales.

     
     
    Quarter Ended September 30, 2012
    Before   After   Per Share
millions except per-share amounts   Tax   Tax   (diluted)
Unrealized gains (losses) on derivatives, net*   $ (456 )   $ (290 )   $ (0.58 )
Gains (losses) on divestitures, net     6       3       0.01  
Impairments, including unproved properties     (5 )     (4 )     (0.01 )
Algeria exceptional profits tax settlement     (7 )     (7 )     (0.01 )
Deepwater Horizon settlement and related costs     (4 )     (3 )     (0.01 )
    $ (466 )   $ (301 )   $ (0.60 )

* For the quarter ended September 30, 2012, before-tax unrealized gains (losses) on derivatives, net includes $(437) million related to commodity derivatives, $(14) million related to interest-rate and other derivatives, and $(5) million related to gathering, processing, and marketing sales.

Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of cash provided by operating activities (GAAP) to discretionary cash flow from operations (non-GAAP), free cash flow (non-GAAP), and adjusted free cash flow (non-GAAP), as well as net income (loss) attributable to common stockholders (GAAP) to adjusted net income (loss) (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management uses discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes fluctuations in assets and liabilities. Management uses free cash flow and adjusted free cash flow to demonstrate the Company's ability to internally fund capital expenditures and to service or incur additional debt. Management uses adjusted net income (loss) to evaluate the Company's operational trends and performance. 

         
    Quarter Ended   Nine Months Ended
    September 30,   September 30,
millions   2013   2012   2013   2012
Net cash provided by operating activities   $ 1,779     $ 2,229     $ 6,784     $ 6,119  
Add back                        
  Deepwater Horizon settlement and related costs     3       3       9       (10 )
  Algeria exceptional profits tax settlement     (32 )     (501 )     (730 )     (614 )
  Change in accounts receivable     11       (58 )     (246 )     (409 )
  Change in accounts payable and accrued expenses     248       -       116       486  
  Change in other items-net     11       121       51       (27 )
Discretionary cash flow from operations   $ 2,020     $ 1,794     $ 5,984     $ 5,545  
                                 
                                 
                                 
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
 
    Quarter Ended   Nine Months Ended
    September 30,   September 30,
millions   2013   2012   2013   2012
Discretionary cash flow from operations   $ 2,020     $ 1,794   $ 5,984   $ 5,545
Less capital expenditures*     2,298       1,779     5,911     5,378
Free cash flow   $ (278 )   $ 15   $ 73   $ 167
Collection of Algeria exceptional profits tax receivable     32       501     730     614
Adjusted free cash flow   $ (246 )   $ 516   $ 803   $ 781

* Includes Western Gas Partners, LP (WES) capital expenditures of $185 million for the quarter ended September 30, 2013, $139 million for the quarter ended September 30, 2012, $622 million for the nine months ended September 30, 2013, and $360 million for the nine months ended September 30, 2012.

    Quarter Ended   Quarter Ended
    September 30, 2013   September 30, 2012
    After   Per Share   After   Per Share
millions except per-share amounts  Tax (diluted)   Tax (diluted) 
Net income (loss) attributable to common stockholders   $ 182     $ 0.36     $ 121     $ 0.24  
Certain items affecting comparability     (389 )     (0.77 )     (301 )     (0.60 )
Adjusted net income (loss)   $ 571     $ 1.13     $ 422     $ 0.84  
                                 

Presented below is a reconciliation of total debt (GAAP) to net debt (non-GAAP). Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

   
   
  September 30,
millions 2013
Total debt $ 13,647
Less cash and cash equivalents   3,939
Net debt $ 9,708
     
Net debt $ 9,708
Stockholders' equity   22,342
Adjusted capitalization $ 32,050
     
Net debt to adjusted capitalization ratio   30%
     
     
     
Anadarko Petroleum Corporation
(Unaudited)
 
    Quarter Ended   Nine Months Ended
Summary Financial Information   September 30,   September 30,
millions except per-share amounts   2013   2012   2013   2012
Consolidated Statements of Income                
Revenues and Other                
Natural-gas sales   $ 805     $ 613     $ 2,547     $ 1,682  
Oil and condensate sales     2,389       2,163       6,761       6,629  
Natural-gas liquids sales     325       289       889       913  
Gathering, processing, and marketing sales     270       218       750       671  
Gains (losses) on divestitures and other, net     64       49       296       106  
Total     3,853       3,332       11,243       10,001  
Costs and Expenses                                 
Oil and gas operating     277       241       769       732  
Oil and gas transportation and other     255       247       763       710  
Exploration     272       297       714       1,662  
Gathering, processing, and marketing     217       185       638       552  
General and administrative     255       285       787       816  
Depreciation, depletion, and amortization     996       979       2,958       2,936  
Other taxes     294       267       819       970  
Impairments     593       4       632       166  
Algeria exceptional profits tax settlement     -       7       33       (1,797 )
Deepwater Horizon settlement and related costs     5       4       12       15  
Total     3,164       2,516       8,125       6,762  
Operating Income (Loss)     689       816       3,118       3,239  
Other (Income) Expense                                
Interest expense     177       185       513       561  
(Gains) losses on derivatives, net     72       251       (393 )     (77 )
Other (income) expense, net     (23 )     (10 )     69       (264 )
Total     226       426       189       220  
Income (Loss) Before Income Taxes     463       390       2,929       3,019  
Income Tax Expense (Benefit)     240       248       1,263       764  
Net Income (Loss)     223       142       1,666       2,255  
Net Income Attributable to Noncontrolling Interests     41       21       95       67  
Net Income (Loss) Attributable to Common Stockholders   $ 182     $ 121     $ 1,571     $ 2,188  
Per Common Share                                 
Net income (loss) attributable to common stockholders--basic   $ 0.36     $ 0.24     $ 3.11     $ 4.35  
Net income (loss) attributable to common stockholders--diluted   $ 0.36     $ 0.24     $ 3.10     $ 4.34  
Average Number of Common Shares Outstanding--Basic     503       500       502       499  
Average Number of Common Shares Outstanding--Diluted     505       502       504       501  
                         
Exploration Expense                        
Dry hole expense   $ 77     $ 142     $ 301     $ 346  
Impairments of unproved properties     83       60       122       1,043  
Geological and geophysical expense     51       40       111       89  
Exploration overhead and other     61       55       180       184  
Total   $ 272     $ 297     $ 714     $ 1,662  
 
 
 
Anadarko Petroleum Corporation
 (Unaudited)
 
    Quarter Ended   Nine Months Ended
Summary Financial Information   September 30,   September 30,
millions   2013   2012   2013   2012
Cash Flows from Operating Activities                
Net income (loss)   $ 223     $ 142     $ 1,666     $ 2,255  
Depreciation, depletion, and amortization     996       979       2,958       2,936  
Deferred income taxes     (28 )     (48 )     535       95  
Dry hole expense and impairments of unproved properties     160       202       423       1,389  
Impairments     593       4       632       166  
(Gains) losses on divestitures, net     (8 )     (6 )     (165 )     23  
Unrealized (gains) losses on derivatives, net     36       456       (359 )     539  
Deepwater Horizon settlement and related costs     5       4       12       15  
Algeria exceptional profits tax settlement     -       7       33       (1,797 )
Tronox-related contingent loss     -       -       -       (250 )
Certain other nonoperating items     (10 )     -       75       -  
Other     53       54       174       174  
Discretionary Cash Flow from Operations     2,020       1,794       5,984       5,545  
Deepwater Horizon settlement and related costs     (3 )     (3 )     (9 )     10  
Algeria exceptional profits tax settlement     32       501       730       614  
(Increase) decrease in accounts receivable     (11 )     58       246       409  
Increase (decrease) in accounts payable and accrued expenses     (248 )     -       (116 )     (486 )
Other items-net     (11 )     (121 )     (51 )     27  
Net Cash Provided by Operating Activities   $ 1,779     $ 2,229     $ 6,784     $ 6,119  
                                 
Capital Expenditures   $ 2,298     $ 1,779     $ 5,911     $ 5,378  
                                 
                                 
                                 
    September 30,     December 31,  
millions   2013     2012  
Condensed Balance Sheets            
Cash and cash equivalents   $ 3,939     $ 2,471  
Accounts receivable, net of allowance     2,465       2,747  
Algeria exceptional profits tax settlement     -       730  
Other current assets     736       847  
Net properties and equipment     40,485       38,398  
Other assets     2,006       1,716  
Goodwill and other intangible assets     5,663       5,680  
Total Assets   $ 55,294     $ 52,589  
Current asset retirement obligations   $ 311     $ 298  
Other current liabilities     4,427       3,696  
Long-term debt     13,647       13,269  
Deferred income taxes     9,372       8,759  
Other long-term liabilities     3,636       4,685  
Stockholders' equity     22,342       20,629  
Noncontrolling interests     1,559       1,253  
Total Liabilities and Equity   $ 55,294     $ 52,589  
Capitalization                
Total debt   $ 13,647     $ 13,269  
Stockholders' equity     22,342       20,629  
Total   $ 35,989     $ 33,898  
Capitalization Ratios                
Total debt     38 %     39 %
Stockholders' equity     62 %     61 %
 
 
 
Anadarko Petroleum Corporation
(Unaudited)
 
Sales Volumes and Prices                   
 
 
 
 
 
 
 
 
Average Daily Volumes   Sales Volumes   Average Sales Price
 
Natural Gas
MMcf/d
 
 
 
Crude Oil &
Condensate
MBbls/d
 
 
 
 
NGLs
MBbls/d
 
 
 
 
Natural Gas
Bcf
 
 
 
Crude Oil &
Condensate
MMBbls
 
 
 
 
NGLs
MMBbls
 
 
 
 
Natural Gas
Per Mcf
 
 
 
Crude Oil &
Condensate
Per Bbl
 
 
 
 
NGLs
Per Bbl
Quarter Ended September 30, 2013                                    
United States   2,629   152     92     242   14     9   $ 3.33   $ 103.15   $ 38.49
Algeria   -   62     -     -   5     -     -     110.95     -
Other International   -   31     -     -   3     -     -     110.54     -
Total   2,629   245     92     242   22     9   $ 3.33   $ 106.05   $ 38.49
                                               
Quarter Ended September 30, 2012                                              
United States   2,499   143     88     231   13     8   $ 2.67   $ 94.19   $ 35.93
Algeria   -   61     -     -   6     -     -     109.70     -
Other International   -   30     -     -   2     -     -     107.42     -
Total   2,499   234     88     231   21     8   $ 2.67   $ 99.93   $ 35.93
                                               
Nine Months Ended September 30, 2013                                                 
United States   2,655   155     88     725   42     24   $ 3.51   $ 98.48   $ 37.07
Algeria   -   53     -     -   14     -     -     109.20     -
Other International   -   34     -     -   10     -     -     108.53     -
Total   2,655   242     88     725   66     24   $ 3.51   $ 102.23   $ 37.07
                                               
Nine Months Ended September 30, 2012                                              
United States   2,487   146     81     681   40     22   $ 2.47   $ 99.26   $ 40.96
Algeria   -   57     -     -   16     -     -     110.46     -
Other International   -   30     -     -   8     -     -     114.21     -
Total   2,487   233     81     681   64     22   $ 2.47   $ 103.90   $ 40.96
                                               
                                               
                                               
         
    Average Daily Volumes
MBOE/d
  Sales Volumes
MMBOE
Quarter Ended September 30, 2013   775   71
Quarter Ended September 30, 2012   739   68
         
Nine Months Ended September 30, 2013   773   211
Nine Months Ended September 30, 2012   729   200
         
Sales Revenue and Commodity Derivatives                
 
    Sales   Commodity Derivatives Gain (Loss)
                      Natural Gas   Crude Oil & Condensate   NGLs
millions   Natural Gas   Crude Oil & Condensate   NGLs   Realized   Unrealized   Realized   Unrealized   Realized   Unrealized
Quarter Ended September 30, 2013                                                      
United States   $ 805   $ 1,446   $ 325   $ 40   $ 6     $ (63 )   $ (119 )   $ 2   $ (7 )
Algeria     -     629     -     -     -       (5 )     -       -     -  
Other International     -     314     -     -     -       -       -       -     -  
Total   $ 805   $ 2,389   $ 325   $ 40   $ 6     $ (68 )   $ (119 )   $ 2   $ (7 )
                                                       
Quarter Ended September 30, 2012                                                      
United States   $ 613   $ 1,246   $ 289   $ 170   $ (262 )   $ 21     $ (164 )   $ 3   $ (11 )
Algeria     -     617     -     -     -       6       -       -     -  
Other International     -     300     -     -     -       -       -       -     -  
Total   $ 613   $ 2,163   $ 289   $ 170   $ (262 )   $ 27     $ (164 )   $ 3   $ (11 )
                                                       
Nine Months Ended September 30, 2013                                                               
United States   $ 2,547   $ 4,175   $ 889   $ 91   $ (5 )   $ (61 )   $ (69 )   $ 7   $ (7 )
Algeria     -     1,566     -     -     -       9       -       -     -  
Other International     -     1,020     -     -     -       -       -       -     -  
Total   $ 2,547   $ 6,761   $ 889   $ 91   $ (5 )   $ (52 )   $ (69 )   $ 7   $ (7 )
                                                       
Nine Months Ended September 30, 2012                                                      
United States   $ 1,682   $ 3,981   $ 913   $ 564   $ (464 )   $ 36     $ 77     $ 6   $ 18  
Algeria     -     1,713     -     -     -       (6 )     -       -     -  
Other International     -     935     -     -     -       -       -       -     -  
Total   $ 1,682   $ 6,629   $ 913   $ 564   $ (464 )   $ 30     $ 77     $ 6   $ 18  
                                                               
                                                               
                                                               
Anadarko Petroleum Corporation  
Financial and Operating External Guidance  
As of November 4, 2013  
             
  4th Qtr     Total Year
  Guidance     Guidance
                       
  Units    Units
                       
Total Sales (MMBOE) 70     -   73     281     -   284  
                       
Crude Oil (MBbl/d) 256     -   263     245     -   248  
                       
  United States 161     -   165     156     -   158  
  Algeria 57     -   59     54     -   55  
  Other International 38     -   39     35     -   36  
                       
Natural Gas (MMcf/d)                      
                       
  United States 2,550     -   2,600     2,625     -   2,640  
                       
Natural Gas Liquids (MBbl/d)                      
                       
  United States 90     -   95     88     -   90  
                       
                       
  $ / Unit    $ / Unit
Price Differentials vs NYMEX (w/o hedges)                      
                       
Crude Oil ($/Bbl) (1.00 )   -   1.00     2.75     -   3.25  
                       
  United States (6.00 )   -   (2.00 )   (1.00 )   -   1.00  
  Algeria 6.00     -   8.00     8.00     -   10.00  
  Other International 5.00     -   7.00     7.00     -   9.00  
                       
Natural Gas ($/Mcf)                      
                       
  United States (0.15 )   -   (0.25 )   (0.15 )   -   (0.20 )
                       
   
   
Anadarko Petroleum Corporation  
Financial and Operating External Guidance  
As of November 4, 2013  
               
    4th Qtr     Total Year
    Guidance     Guidance *
                         
    $ MM     $ MM
Other Revenues                        
  Marketing and Gathering Margin   40     -   50     140     -   150  
  Minerals and Other   30     -   40     175     -   185  
                         
                         
    $ / BOE     $ / BOE
Costs and Expenses                        
  Oil & Gas Direct Operating   4.10     -   4.30     3.75     -   3.85  
  Oil & Gas Transportation/Other   3.45     -   3.65     3.55     -   3.65  
  Depreciation, Depletion and Amortization   14.10     -   14.30     13.95     -   14.05  
  Production Taxes (% of Product Revenue)   8.0 %   -   9.0 %   8.0 %   -   9.0 %
                         
    $ MM     $ MM
                         
  General and Administrative   275     -   325     1,050     -   1,100  
  Exploration Expense                        
    Non-Cash   275     -   325     700     -   750  
    Cash   175     -   225     450     -   500  
  Interest Expense (net)   175     -   180     685     -   690  
  Other (Income)/Expense   -     -   20     180     -   200  
                         
Tax Rate                        
  Algeria (All current)   45 %   -   50 %   40 %   -   45 %
  Rest of Company (30% Current for 4Q and FY)   50 %   -   60 %   45 %   -   55 %
                         
                         
Avg. Shares Outstanding (MM)                        
  Basic   503     -   505     502     -   503  
  Diluted   507     -   508     505     -   506  
                         
                         
Capital Investment (Excluding Western Gas Partners, LP)   $ MM     $ MM
                         
  APC Capital Expenditures   2,100     -   2,300     7,400     -   7,600  
                         
* Excludes items affecting comparability                        
                         
                         
                         
Anadarko Petroleum Corporation
Commodity Hedge Positions (Excluding Natural Gas Basis)
As of November 4, 2013
                         
            Weighted Average Price per barrel
      Volume
(MBbls/d)
    Floor Sold     Floor Purchased     Ceiling Sold
Crude Oil                      
Three-Way Collars                    
2013                        
  Brent   26   $ 85.00   $ 105.00   $ 125.15
                         
Fixed Price - Financial                    
2013                        
  Brent (Jan-Dec) 61   $ 108.72            
  WTI (Jan-Dec) 47   $ 94.43            
  108   $ 102.50            
                         
  WTI (Jul-Dec) 14   $ 104.36            
                         
  WTI (Aug-Dec) 37   $ 101.11            
                         
  Brent (Sep-Dec) 8   $ 110.61            
                         
2014                    
  WTI   51   $ 96.41            
             
      Volume     Weighted Average Price per MMBtu
      (thousand                  
      MMBtu/d)     Floor Sold     Floor Purchased     Ceiling Sold
Natural Gas                      
Three-Way Collars                    
  2014   600   $ 2.75   $ 3.75   $ 5.01
                         
Fixed Price - Financial                    
  2013   1,185   $ 4.00            
  2014   600   $ 4.26            
                         
                         
                         
                         
Interest-Rate Derivatives
As of November 4, 2013
                         
  Instrument   Notional Amt.   Start Date   Maturity   Rate Paid   Rate Received  
  Swap   $750 Million   June 2014   June 2024   6.00%   3M LIBOR  
  Swap   $1,100 Million   June 2014   June 2044   5.57%   3M LIBOR  
  Swap   $50 Million   Sept. 2016   Sept. 2026   5.91%   3M LIBOR  
  Swap   $750 Million   Sept. 2016   Sept. 2046   5.86%   3M LIBOR