Anadarko Petroleum Corporation has announced its 2019 capital expectations and guidance. The company's 2019 capital investment program is $4.3 to $4.7 billion, which represents a decrease relative to its 2018 program and delivers 10-percent oil growth year over year. The capital investment plan is consistent with the company's durable strategy focused on enhancing shareholder value by delivering attractive margins and returns, while advancing the development of the company's core assets and generating material free cash flow at current strip prices.

In addition, Anadarko announced its board of directors has authorized a $1 billion increase to its share-repurchase program and a 20-percent increase to the company's quarterly dividend. The company also increased its debt-reduction program by an additional $500 million. To date, more than 10-percent of shares outstanding have been retired since the inception of the share-repurchase program, with $1.5 billion remaining authorization to repurchase shares through mid-year 2020.

2019 CAPITAL PROGRAM HIGHLIGHTS

• 70 percent of investments are directed toward scalable, oil-levered U.S. onshore assets
• $50 oil and $3 natural gas environment investment case
• ~$1.6 billion adjusted free cash flow expected at $60 WTI, $70 Brent, and $3 HH
• 10 percent growth in oil sales volume
• 15 percent or greater growth in oil sales volume per debt-adjusted share

FOCUSED ON SHAREHOLDER RETURNS

• $1 billion addition to share-repurchase program, now totaling $5 billion
• 20-percent increase in the quarterly dividend to $0.30 per share, a 500-percent increase during 2018
• $500 million increase to debt-reduction program, now totaling $2 billion

"Our 2019 investment plan further demonstrates the capital efficiency of our portfolio," said Anadarko Chairman and CEO Al Walker. "We believe our peer-leading ability to attractively grow oil volumes within cash flow in a $50 oil environment while delivering significant free cash flow above this break-even point, positions our company very well to execute on our expanded shareholder-return commitments in the near term and in a durable fashion well into the future."

U.S. ONSHORE RESOURCE PLAYS

Anadarko plans to invest approximately 70 percent of its 2019 capital in the U.S. onshore, where it expects to operate an average of approximately 15 rigs and 10 completion crews focused primarily on development activities in the Delaware and DJ basins.

Approximately $1.4 billion is being allocated toward upstream activities in the Delaware Basin of West Texas. The successful expansion of the company's infrastructure footprint, including oil gathering and treating throughout West Texas, has paved the way to transition to multi-well pad development, as illustrated by the encouraging early results at the Silvertip-A campaign.

In the DJ Basin of northeast Colorado, the company expects to invest approximately $1.3 billion on upstream activities in 2019, with continued development of its minerals-interest ownership and infrastructure-advantaged position in the Wattenberg field.

In 2019, Anadarko also expects to continue its appraisal program in Wyoming's Powder River Basin. The company plans to complete 10 to 15 operated horizontal wells to progress the company's appraisal efforts in this high-potential acreage position targeting the southern Turner-formation fairway in Converse County.

CONVENTIONAL OIL

Anadarko plans to allocate approximately $500 million toward its deepwater Gulf of Mexico operations, which is about $300 million less than in 2018, while delivering a similar number of wells and maintaining production levels between 140,000 and 150,000 barrels of oil equivalent (BOE) per day.

The company also plans to allocate about $200 million toward its international cash-generating operations in Algeria and Ghana in 2019, where the company expects stable year-over-year, Brent-levered oil production. Offshore Ghana, investments will be focused on adding incremental wells to optimize capacity at the Jubilee and TEN floating, production, storage and offloading (FPSO) vessels.

EXPLORATION

The company's exploration investments in 2019 are expected to total about $250 million, focused on identifying material and scalable opportunities in the U.S. onshore and satellite opportunities near existing operated facilities in the deepwater Gulf of Mexico.

LNG
Approximately $200 million is being allocated toward the Mozambique LNG project, pre FID (final investment decision), for Anadarko's portion of the costs associated with ongoing site preparation for the shared onshore facilities. The company remains on track for FID consideration in the first half of 2019, and anticipates adjusting its capital-investment expectations associated with the Mozambique LNG project at the time of project sanction.