Anadarko to cut spending in Wattenberg by 20 percent

Anadarko Petroleum Corp. (NYSE: APC), among the top oil and gas producers in Weld County, said Tuesday that it will cut its capital budget by 33 percent to no more than $5.8 billion this year.

The Woodlands, Texas,-based Anadarko said it planned total investment of between $5.4 billion and $5.8 billion this year from planned spending of between $8.1 billion and $8.5 billion last year.

Capital spending in the Wattenberg, the lucrative oil field in Weld County, will total $1.8 billion, down from spending of about $2.2 billion in 2014, a reduction of 20 percent, according to the company.

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Still, the $1.8 billion that Anadarko plans to spend in the region amounts to nearly 50 percent of its $3.8 billion onshore 2015 capital budget.

“The resilient economics of the Wattenberg field continue to make it an attractive place to invest in 2015 as it generates better than 30-percent before-tax rates of return,” the company said in a statement.

The spending cuts come as the industry faces pressure from falling oil prices. West Texas Intermediate crude prices rose more than 2 percent to $50.47 per barrel Tuesday, less than half of highs topping $100 last summer.

Houston-based Noble Energy Inc. (NYSE: NBL), another large oil producer, said last month it would cut its budget to $2.9 billion this year from more than $4 billion last year. Noble Energy plans to spend around $900 million in Northern Colorado this year from planned spending of $2 billion last year, a 55-percent reduction.

Anadarko said Tuesday that it would operate nine rigs to drill 280 wells in the Wattenberg, down from the 13 rigs that the company said it would deploy to drill 360 wells in 2014.

Anadarko shares rose 2 percent to $83.52 in afternoon trading.

“In the current market, we believe it is prudent to reduce capital investments and position the company for the future, rather than to pursue year-over-year growth,” CEO Al Walker said in the statement.