How Will Anadarko’s Revenue Change If Crude Oil Prices Rebound To $100 Per Barrel By 2018?
Being a large oil and gas producer, Anadarko’s revenue is highly correlated to commodity prices. The sharp fall in commodity prices over the last 20 months has resulted in a notable decline in the company’s price realizations for the various commodities. As a result, the US-based E&P company had to pull back its exploration and drilling plans during 2015. This severely impacted the company, resulting in a drop of over 40% in its revenue and over 75% in its earnings last year.
Based on a weak outlook for commodity prices in the near future, we expect crude oil prices to gradually recover to $70 per barrel by 2018. In this case, Anadarko’s production and price realization will remain weak in 2016 and grow gradually over the following two years. These numbers are presented in the table below under the base case calculations. If, however, the commodity markets recover faster-than-expected and crude oil prices rebound to $100 per barrel by 2018, Anadarko’s revenue in 2018 is likely to be 30% higher than predicted in our base case.
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Have more questions about Anadarko Petroleum (NYSE:APC)? See the links below:
- How Will Anadarko’s Revenue Move If Crude Oil Prices Average At $50 Per Barrel In 2018?
- Why Are Crude Oil Operations Important For Anadarko?
- How Will Anadarko’s Revenue And EBITDA Grow Over The Next Five Years?
- How Has Anadarko’s Production Mix And Price Realizations Changed Over The Last Five Years?
- How Has Anadarko’s Revenue And EBITDA Changed Over The Last Five Years?
- What Is Anadarko’s Fundamental Value Based On 2016 Estimated Numbers?
- What Is Anadarko Petroleum’s Revenue And EBITDA Breakdown?
- How Has Anadarko Petroleum’s Revenue And EBITDA Composition Changed Between 2010-2016?
- 2015 Earnings Review: Weak Commodity Prices Create A Dent In Anadarko’s Earnings; New Projects May Help The Company To Remain Afloat
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Anadarko Petroleum
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