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Is $60 a barrel oil coming soon?

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By: David Hunn

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U.S. oil prices could rise to $60 a barrel by the end of this year, said Anadarko’s chief executive in a Wednesday earnings call, which would encourage the company to begin reinvesting in oil exploration and production.

Al Walker said Anadarko anticipates that growth in demand will drive up prices. Anadarko won’t borrow to expand drilling, Walker said.

The company lauded record production from several wells, including in the Gulf of Mexico, plus deep expense cuts, which helped strengthen balance sheets.

On Tuesday, Anadarko reported a net loss of $692 million, or $1.36 per share, plus more than $15 billion in long-term debt. It has halved capital expenses so far this year, cutting from $3.2 billion in the first six months of last year to $1.6 billion so far this year. On Wednesday, the company said it has paid down almost $3 billion in debt this year largely by selling assets.

In the first quarter of the year, it sold soda ash and coal royalties, among other items, for $1.3 billion in total. In the second quarter, it banked $1.2 billion, in part by selling mineral rights in west Texas’ Permian Basin and Wyoming’s Wamsutter region.

In the second half of this year, the company said, it should be able to sell at least another $1 billion in assets. “We’ve made exceptional progress,” Walker said.


TAGS: Oil, Exploration, Production, Anadarko


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