Editor’s Note: With an accounting degree from the University of Houston, a CPA license, and over 30 years with Anadarko under her belt, the decision to promote Cathy Douglas to chief accounting officer appears to be on par with the company’s idea of “employee development.” OGFJ associate editor Mikaila Adams spoke with Ms. Douglas about Anadarko - her role and responsibilities, as well as her ideas on current financial and accounting issues.
OGFJ: What are your main responsibilities?
Cathy Douglas: As CAO I report to the CFO. My main responsibility is to provide timely and accurate, relevant information to those making decisions, while making sure that we meet all of Anadarko’s regulatory obligations, that we safeguard the corporate assets and most importantly, fulfill Anadarko’s fiduciary responsibility to its shareholders.
OGFJ: What are Anadarko’s plans, if any, to adopt IFRS accounting rules?
Douglas: Under the current rules, as a publicly traded company, we’re required to report according to US GAAP and we’re committed to doing that. We’re exploring IFRS. We’re learning more about it and attending seminars so that if, and when, publicly traded companies are permitted to report under IFRS we’ll be prepared to make that decision.
For an oil and natural gas company, one of the biggest changes that Anadarko would have had to have made under IFRS would be moving from the full-cost method of accounting to successful-efforts method of accounting. We made that change in 2007, which was a monumental achievement for a company of our size.
OGFJ: Do you expect the SEC will issue new rules regarding what constitutes proved reserves?
Douglas: I don’t want to speculate on what the SEC might or might not do, however, several people in our organization, including me on the financial side, served on a committee that provided comments to the SEC throughout the discussion phase. I will say that we do have a high level of confidence in how we report our reserves currently, and we engage a highly respected third party engineering firm in that process as well.
OGFJ: With the current economy and financial situation, what sort of belt-tightening is going on at Anadarko?
Douglas: We’ve been very focused on our financial discipline. Evidence would be our free cash flow of nearly $2 billion that we generated in the first nine months of this year. We are very fortunate in that we did the acquisitions (Kerr McGee and WesternGas) in 2006 and subsequently designed a portfolio of assets with robust economics that is very capital efficient even in lower-price environments. We will always work to improve areas of our cost structure that are under our control.
“We are very fortunate in that we did the acquisitions in 2006 and subsequently designed a portfolio of assets with robust economics that is very capital efficient even in lower-price environments.”
I think the continued volatility of the market will be a significant challenge for the industry as a whole going forward. This is something that we constantly monitor and we’ll continue to be very disciplined in our capital spending. As I stated, we have a portfolio that really allows us to continue generating energy for consumers and value for stakeholders.
OGFJ: What do you see as the biggest challenges in your new position?
Douglas: Employee development. We’re very fortunate here at Anadarko. We really do reward individual contribution, hard work, and as evidenced by my own career here at Anadarko…rising up the corporate structure over the years. I firmly believe that employee development is key, and keeping the right people in the right positions to run this organization is very important.
OGFJ: Congratulations on your appointment and thank you for your time.
