Anadarko unveils $2.5B stock-repurchase program

Anadarko Petroleum has announced plans to spend $2.5 billion on a share-repurchase program, Kallanish Energy learns.

The plan will repurchase roughly 10% of Anadarko's outstanding shares at current prices, the Houston-based company said.

Stock buybacks decrease the number of a company’s outstanding shares, boosting earnings per share.

“We believe this is a very attractive use of our cash, given the value of our assets and the highly accretive nature of this program,” said Al Walker, Anadarko chairman, president and CEO, in a statement.

He added: “At the current share price, this represents approximately 10% of the company’s outstanding common shares, and we will initially target $1 billion of share repurchases prior to year-end 2017.”

The program will run through 2018.

The repurchases will be made in accordance with applicable securities laws from time to time in open market or private transactions, depending on market conditions, and may be discontinued at any time, the company said.

Walker also reaffirmed the company’s 2017 year-end production guidance from the Gulf of Mexico, the Denver-Julesburg Basin in Colorado and the Delaware Basin in West Texas/New Mexico.

The company said it expects to pump 130,000 barrels per day (BPD) of crude oil from its Gulf of Mexico operations. It is also targeting a combined 150,000 BPD from the DJ and Delaware basins, the independent producer said.

Walker also said the company expects to fund its 2018 capital program within its cash flow from operations, assuming an average oil price of $50 per barrel.