Oil and Gas Producer Anadarko May Cut 500 U.S. Jobs
could reduce its U.S. payroll by an estimated 500 jobs -- about 10% of its global work force -- as the independent oil and gas producer restructures itself after two big acquisitions, the company said Tuesday.
After its $22.5 billion purchase of rivals Kerr-McGee and Western Gas Resources last year, the company immediately began to cut debt by selling noncore assets.
Anadarko has roughly 2,200 employees in the Houston area, who will be affected by the cuts.
Its employment grew from 3,500 to between 5,500 and 6,000 after the mergers, but that number has shrunk to about 5,000 in recent months as workers left in conjunction with asset sales, many hired on by the new owners, said Anadarko spokeswoman Teresa Wong.
Wong said the 500 figure was only an estimate, and the company continues to evaluate employment needs. The types of job to be eliminated include oilfield workers, engineers and others, Wong said.
The company, based in the Houston suburb of The Woodlands, has said it hopes to reduce debt from about $26 billion at the start of the year to roughly $12 billion by the end of 2007. It has announced several asset sales in recent months.
Last week, Anadarko announced the sale of oil fields in west Texas and Wyoming, and before that in Louisiana. In November, it said it had closed the previously announced sale of its Canadian subsidiary for about $4.24 billion to Canadian Natural Resources. Assets in Venezuela and elsewhere remain for sale.
Wong said the company is focused on assets in the Rocky Mountains and the deepwater Gulf of Mexico, as well as key businesses elsewhere in the United States and abroad.
On Friday, Moody's Investors Service downgraded Anadarko's long-term debt to one notch above junk status and said its rating outlook is negative.
Moody's cited changes in Anadarko's debt-reduction strategy, which the ratings service said could potentially be riskier for debt holders. After the Kerr-McGee and Western Gas Resources purchases, Anadarko indicated it would try to cut debt through proceeds from asset sales and issuing new stock, Moody's said.
Later in the year, Anadarko said it expected to rely mainly on property sales to reduce debt in 2007. Although those sales will help reduce debt, reserves and production will be lower than originally forecast, and capital spending will be reduced in 2007 to about $4.2 billion, Moody's said.
In addition, free cash flow available for debt reduction could also be lower, particularly if commodity prices stay at recent lower levels, Moody's said.