Anadarko Announces Second-Quarter Results

0

Source: Marketwire

HOUSTON, TX -- (Marketwire) -- 07/25/11 -- Anadarko Petroleum Corporation (NYSE: APC) today announced second-quarter 2011 net income attributable to common stockholders of $544 million, or $1.08 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $28 million, or $0.06 per share (diluted) on an after-tax basis.(1) Cash flow from operating activities in the second quarter of 2011 was $1.837 billion, and discretionary cash flow totaled $1.838 billion.(2)

Second-Quarter 2011 Highlights

--  Achieved record liquids sales volumes of 297,000 barrels per day
--  Finalized Lucius unitization agreement
--  Successfully tested three wells at the Caesar/Tonga mega project
--  Closed the acquisition of the Wattenberg Processing Plant

'We achieved record liquids sales volumes during the quarter, enhancing margins and generating excellent cash flows,' said Anadarko Chairman and CEO Jim Hackett. 'Nearly all of the year-over-year volume growth was attributable to a 34,000 barrel-per-day increase in liquids volumes. These results contributed to strong discretionary cash flows of more than $1.8 billion -- approximately $117 million above our capital expenditures, which included a one-time cash investment of $518 million associated with the acquisition of the Wattenberg plant.'

During the second quarter of 2011, sales volumes totaled 62 million barrels of oil equivalent (BOE), or 685,000 BOE per day, averaging approximately 2.3 billion cubic feet of natural gas per day, 225,000 barrels of oil per day (BOPD), and 72,000 barrels of natural gas liquids per day.

Operations Summary

The company achieved sales-volumes records during the second quarter of 2011 in Wattenberg, Greater Natural Buttes, Wamsutter (operated), Bone Spring and the Marcellus Shale. In the Eagleford Shale, Anadarko closed its $1.6 billion joint-venture agreement with a subsidiary of Korea National Oil Corporation and exited the quarter with record gross sales volumes of approximately 45,000 BOE per day in the play, an increase of approximately 25 percent from the end of the prior quarter. In Ghana, current gross production from Jubilee is approximately 80,000 BOPD, and production continues to ramp up with further well completions and gas injection.

In the deepwater Gulf of Mexico, Anadarko continued to advance two major projects during the second quarter. The company finalized the Lucius unitization agreement and recently announced plans to develop the field with a truss spar designed for a capacity of 80,000 BOPD and 450 million cubic feet of natural gas per day. Sanctioning is expected to occur later this year, with first production expected in 2014. At the Caesar/Tonga project, Anadarko completed flow and reservoir tests on three wells. Each of the wells tested at flow rates of approximately 15,000 BOPD with high-quality (27ยบ API gravity) oil.

Exploration Summary

Anadarko has mobilized the Discoverer Spirit drillship to begin the company's 2011 exploration program in West Africa, following the drillship's completion of the final test at Caesar/Tonga. This program includes the Montserrado exploration well in Liberia, as well as the Jupiter exploration well and Mercury appraisal well in Sierra Leone. In other deepwater exploration areas, Anadarko continued to delineate its large natural gas discoveries in Mozambique, and to advance appraisal activities in the Tweneboa/Enyenra area offshore Ghana. The company also recently began appraisal drilling in the Campos Basin offshore Brazil.

As previously announced by Diamond Offshore, Anadarko signed long-term contracts in the second quarter for two new-build drillships. The Ocean BlackHawk is expected to be delivered in late 2013, and the Ocean BlackHornet is expected to be delivered in early 2014. These new state-of-the-art rigs are designed to work in up to 12,000 feet of water, and each has been contracted for a term of five years. These new rigs will feature enhanced drilling capabilities and safety equipment designed to meet the highest specifications in the industry.

'We expect the next six to nine months to be the most active period of deepwater exploration and appraisal drilling in our company's history,' said Hackett. 'Our exploration program is designed to deliver upon our goal of discovering more than 500 million BOE of net risked resources this year. We are continuing to advance our deep inventory of high-impact prospects, and the new rig agreements reinforce our long-term commitment to the safety and success of our global exploration program.'

Financial Summary

Anadarko reported total product revenues of approximately $3.5 billion during the second quarter of 2011, a 46-percent increase relative to the second quarter of 2010. The company ended the second quarter of 2011 with approximately $3.4 billion of cash on hand in addition to its five-year, $5 billion undrawn credit facility. As provided in the supplemental information to this release, Anadarko protected an additional 450,000 MMBtu per day of 2013 natural gas production, with three-way collars that have a middle floor of $5.00 per MMBtu and a ceiling of $6.57 per MMBtu.

Operations Report

For more details on Anadarko's operations, please refer to the comprehensive report on second-quarter 2011 activity. The report is available at www.anadarko.com on the Investor Relations page.

Conference Call Tomorrow at 9 a.m. CDT, 10 a.m. EDT

Anadarko will host a conference call on Tuesday, July 26, at 9 a.m. Central Daylight Time (10 a.m. Eastern Daylight Time) to discuss second-quarter results, current operations and the company's outlook for the remainder of 2011. The dial-in number is 888.713.4205 in the United States or 617.213.4862 internationally. The confirmation number is 67183355. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will also be available on the Web site for approximately 30 days following the conference call.

Financial Data

Eight pages of summary financial data follow, including current hedge positions, financial guidance and supplemental production guidance.

(1) See the accompanying table for details of certain items affecting comparability.

(2) See the accompanying table for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measures provide useful information for investors.

Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world's health and welfare. As of year-end 2010, the company had approximately 2.42 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko, please visit www.anadarko.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including Anadarko's ability to commercially operate the drilling prospects identified in this news release. See 'Risk Factors' in the company's 2010 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

Cautionary Note to U.S. Investors: Effective Jan. 1, 2010, the United States Securities and Exchange Commission ('SEC') permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms. Anadarko uses certain terms in this news release, such as 'net risked resources,' and similar terms that the SEC's guidelines strictly prohibit Anadarko from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in Anadarko's Form 10-K for the year ended Dec. 31, 2010, File No. 001-08968, available from Anadarko at www.anadarko.com or by writing Anadarko at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380, Attn: Investor Relations. This form may also be obtained by contacting the SEC at 1-800-SEC-0330.


                         Anadarko Petroleum Corporation

                      Certain Items Affecting Comparability




                                             Quarter Ended June 30, 2011
                                           -------------------------------
                                             Before     After    Per Share
millions except per-share amounts             Tax        Tax     (diluted)
                                           ---------  ---------  ---------
Unrealized gains (losses) on derivatives,
 net*                                      $     178  $     114  $    0.22
Gains (losses) on divestitures, net              (94)       (79)     (0.16)
Impairments                                     (102)       (66)     (0.13)
Change in uncertain tax positions (FIN48)         --          3       0.01
                                           ---------  ---------  ---------
                                           $     (18) $     (28) $   (0.06)
                                           =========  =========  =========



* For the quarter ended June 30, 2011, before-tax unrealized gains (losses)
  on derivatives, net includes $316 million related to commodity
  derivatives, $(142) million related to other derivatives, and $4 million
  related to gathering, processing, and marketing sales.



                                             Quarter Ended June 30, 2010
                                           -------------------------------
                                             Before     After    Per Share
millions except per-share amounts             Tax        Tax     (diluted)
                                           ---------  ---------  ---------
Unrealized gains (losses) on derivatives,
 net*                                      $    (305) $    (195) $   (0.39)
Gains (losses) on divestitures, net                2          1         --
Impairments                                     (115)       (73)     (0.15)
Change in uncertain tax positions (FIN48)         --        (17)     (0.03)
                                           ---------  ---------  ---------
                                           $    (418) $    (284) $   (0.57)
                                           =========  =========  =========



* For the quarter ended June 30, 2010, before-tax unrealized gains (losses)
  on derivatives, net includes $103 million related to commodity
  derivatives, $(406) million related to other derivatives, and $(2)
  million related to gathering, processing, and marketing sales.



Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of cash provided by operating activities (GAAP) to discretionary cash flow from operations and free cash flow (non-GAAP), and net income (loss) attributable to common stockholders (GAAP) to adjusted net income (loss) (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management uses discretionary cash flow from operations and free cash flow to demonstrate the Company's ability to internally fund capital expenditures and to service or incur additional debt. It is useful in comparisons of oil and gas exploration and production companies because it excludes fluctuations in assets and liabilities. Management uses adjusted net income (loss) to evaluate the Company's operational trends and performance.


                                          Quarter Ended   Six Months Ended
                                            June 30,          June 30,
                                        ----------------  ----------------
millions                                  2011     2010     2011     2010
                                        -------  -------  -------  -------
Net cash provided by operating
 activities                             $ 1,837  $ 1,566  $ 3,126  $ 2,883
Add back:
  Change in accounts receivable             284      (32)     535       (5)
  Change in accounts payable and
   accrued expenses                        (418)     (52)    (241)     229
  Change in other items-net                 135     (204)      92     (299)
                                        -------  -------  -------  -------
Discretionary cash flow from operations $ 1,838  $ 1,278  $ 3,512  $ 2,808
                                        =======  =======  =======  =======





                      Anadarko Petroleum Corporation

                Reconciliation of GAAP to Non-GAAP Measures





                                      Quarter Ended      Six Months Ended
                                        June  30,            June 30,
                                    ------------------  ------------------
millions                              2011      2010      2011      2010
                                    --------  --------  --------  --------
Discretionary cash flow from
 operations                         $  1,838  $  1,278  $  3,512  $  2,808
Less:  Capital expenditures*           1,721     1,367     3,308     2,606
                                    --------  --------  --------  --------
Free cash flow                      $    117  $    (89) $    204  $    202
                                    ========  ========  ========  ========


* Includes Western Gas Partners, LP (WES) capital expenditures of $21
  million and $47 million for the three months ended June 30, 2011, and
  2010, respectively, and $338 million and $51 million for the six months
  ended June 30, 2011, and 2010, respectively.



                                      Quarter Ended       Quarter Ended
                                      June 30, 2011       June 30, 2010
                                    ------------------  ------------------
                                     After   Per Share   After   Per Share
millions except per-share amounts     Tax    (diluted)    Tax    (diluted)
                                    --------  --------  --------  --------
Net income (loss) attributable to
 common stockholders                $    544  $   1.08  $    (40) $  (0.08)
Less: Certain items affecting
 comparability                           (28)    (0.06)     (284)    (0.57)
                                    --------  --------  --------  --------
Adjusted net income (loss)          $    572  $   1.14  $    244  $   0.49
                                    ========  ========  ========  ========



Presented below is a reconciliation of total debt (GAAP) to net debt
(non-GAAP). Management uses net debt as a measure of the Company's
outstanding debt obligations that would not be readily satisfied by its
cash and cash equivalents on hand.



millions                                                     June 30, 2011
                                                             -------------
Total debt                                                   $      13,226
Less:  Cash and cash equivalents                                     3,406
                                                             -------------
Net debt                                                     $       9,820
                                                             =============

Net debt                                                     $       9,820
Stockholders' equity                                                21,471
                                                             -------------
Adjusted capitalization                                      $      31,291
                                                             =============

                                                             -------------
Net debt to adjusted capitalization
 ratio                                                                  31%
                                                             =============





                      Anadarko Petroleum Corporation
                                (Unaudited)



                                       Quarter Ended     Six Months Ended
Summary Financial Information             June 30,            June 30,
                                    ------------------  ------------------
millions except per-share amounts     2011      2010      2011      2010
                                    --------  --------  --------  --------
Consolidated Statements of Income
                                    --------  --------  --------  --------
Revenues and Other
                                    --------  --------  --------  --------
Natural-gas sales                   $    870  $    802  $  1,724  $  1,883
Oil and condensate sales               2,236     1,338     4,043     2,840
Natural-gas liquids sales                370       235       703       509
Gathering, processing, and
 marketing sales                         258       188       488       461
Gains (losses) on divestitures and
 other, net                              (58)       41       (29)       50
                                    --------  --------  --------  --------
Total                                  3,676     2,604     6,929     5,743
                                    ========  ========  ========  ========
Costs and Expenses
                                    --------  --------  --------  --------
Oil and gas operating                    236       196       468       383
Oil and gas transportation and
 other*                                  207       196       416       387
Exploration                              236       198       415       353
Gathering, processing, and
 marketing                               205       149       376       332
General and administrative               291       203       526       413
Depreciation, depletion, and
 amortization                            985       902     1,970     1,883
Other taxes                              413       268       757       569
Impairments                              102       115       104       127
                                    --------  --------  --------  --------
Total                                  2,675     2,227     5,032     4,447
                                    ========  ========  ========  ========
Operating Income (Loss)                1,001       377     1,897     1,296
                                    ========  ========  ========  ========
Other (Income) Expense
                                    --------  --------  --------  --------
Interest expense                         216       200       436       424
(Gains) losses on commodity
 derivatives, net                       (343)     (264)      (87)     (852)
(Gains) losses on other
 derivatives, net                        144       406        85       435
Other (income) expense, net              (18)       14       (42)       23
                                    --------  --------  --------  --------
Total                                     (1)      356       392        30
                                    ========  ========  ========  ========
Income (Loss) Before Income Taxes      1,002        21     1,505     1,266
                                    ========  ========  ========  ========
Income Tax Expense (Benefit)             440        49       706       566
                                    ========  ========  ========  ========
Net Income (Loss)                   $    562  $    (28) $    799  $    700
                                    ========  ========  ========  ========
Net Income Attributable to
 Noncontrolling Interests                 18        12        39        24
                                    ========  ========  ========  ========
Net Income (Loss) Attributable to
 Common Stockholders                $    544  $    (40) $    760  $    676
                                    ========  ========  ========  ========
Per Common Share:
                                    ========  ========  ========  ========
Net income (loss) attributable to
 common stockholders-basic         $   1.09  $  (0.08) $   1.52  $   1.36
Net income (loss) attributable to
 common stockholders-diluted       $   1.08  $  (0.08) $   1.51  $   1.35
                                    ========  ========  ========  ========
Average Number of Common Shares
 Outstanding-Basic                      498       495       497       494
                                    ========  ========  ========  ========
Average Number of Common Shares
 Outstanding-Diluted                    500       495       499       496
                                    ========  ========  ========  ========

                                    ========  ========  ========  ========
Exploration Expense
                                    --------  --------  --------  --------
Dry hole expense                    $     42  $     17  $     58  $     42
Impairments of unproved properties        95       114       169       202
Geological and geophysical expense        52        25       100        28
Exploration overhead and other            47        42        88        81
                                    --------  --------  --------  --------
Total                               $    236  $    198  $    415  $    353
                                    ========  ========  ========  ========



* For the three and six months ended June 30, 2010, oil and gas
  transportation and other expenses includes $12 million related to force
  majeure invoked on contracted deepwater drilling rigs in the Gulf of
  Mexico.





                       Anadarko Petroleum Corporation
                                (Unaudited)



                                       Quarter Ended     Six Months Ended
Summary Financial Information             June 30,           June 30,
                                    ------------------  ------------------
millions                              2011      2010      2011      2010
                                    --------  --------  --------  --------
Cash Flows from Operating
 Activities
                                    --------  --------  --------  --------
Net income (loss)                   $    562  $    (28) $    799  $    700
Depreciation, depletion, and
 amortization                            985       902     1,970     1,883
Deferred income taxes                    185      (251)      258       (97)
Dry hole expense and impairments of
 unproved properties                     137       131       227       244
Impairments                              102       115       104       127
(Gains) losses on divestitures, net       18        (2)       18       (15)
Unrealized (gains) losses on
 derivatives, net                       (178)      305        75      (240)
Other                                     27       106        61       206
                                    --------  --------  --------  --------
Discretionary Cash Flow from
 Operations                            1,838     1,278     3,512     2,808
(Increase) decrease in accounts
 receivable                             (284)       32      (535)        5
Increase (decrease) in accounts
 payable and accrued expenses            418        52       241      (229)
Other items-net                         (135)      204       (92)      299
                                    --------  --------  --------  --------
Net Cash Provided by Operating
 Activities                         $  1,837  $  1,566  $  3,126  $  2,883
                                    ========  ========  ========  ========

                                    ========  ========  ========  ========
Capital Expenditures                $  1,721  $  1,367  $  3,308  $  2,606
                                    --------  --------  --------  --------





                                                        June 30,  December
millions                                                  2011    31, 2010
                                                        --------  --------
Condensed Balance Sheets
                                                        --------  --------
Cash and cash equivalents                               $  3,406  $  3,680
Other current assets                                       3,464     2,995
Net properties and equipment                              38,343    37,957
Other assets                                               1,568     1,616
Goodwill and other intangible assets                       5,836     5,311
                                                        --------  --------
Total Assets                                            $ 52,617  $ 51,559
                                                        --------  --------
Current debt                                            $    425  $    291
Other current liabilities                                  3,702     3,823
Long-term debt                                            12,801    12,722
Other long-term liabilities                               13,341    13,284
Stockholders' equity                                      21,471    20,684
Noncontrolling interests                                     877       755
                                                        --------  --------
Total Liabilities and Equity                            $ 52,617  $ 51,559
                                                        ========  ========
Capitalization
                                                        --------  --------
Total debt                                              $ 13,226  $ 13,013
Stockholders' equity                                      21,471    20,684
                                                        --------  --------
Total                                                   $ 34,697  $ 33,697
                                                        ========  ========
Capitalization Ratios
                                                        --------  --------
Total debt                                                    38%       39%
Stockholders' equity                                          62%       61%
                                                        ========  ========




                      Anadarko Petroleum Corporation
                                (Unaudited)


Sales Volumes and Prices

                        Average Daily Volumes          Sales Volumes
                      -------------------------- --------------------------

                                Crude                      Crude
                      Natural   Oil &            Natural   Oil &
                        Gas   Condensate  NGLs     Gas   Condensate  NGLs
                      MMcf/d   MBbls/d   MBbls/d   Bcf     MMBbls   MMBbls
                      -------- -------- -------- -------- -------- --------
Quarter Ended June
 30, 2011
United States            2,326      134       72      212       12        6
Algeria                              58                          5
Other International                  33                          3
                      -------- -------- -------- -------- -------- --------
Total                    2,326      225       72      212       20        6
                      -------- -------- -------- -------- -------- --------

Quarter Ended June
 30, 2010
United States            2,324      130       66      212       12        6
Algeria                              53                          5
Other International                  15                          1
                      -------- -------- -------- -------- -------- --------
Total                    2,324      198       66      212       18        6
                      -------- -------- -------- -------- -------- --------

Six Months Ended June
 30, 2011
United States            2,369      133       74      429       24       13
Algeria                              57                         10
Other International                  29                          5
                      -------- -------- -------- -------- -------- --------
Total                    2,369      219       74      429       39       13
                      -------- -------- -------- -------- -------- --------

Six Months Ended June
 30, 2010
United States            2,358      133       66      427       24       12
Algeria                              61                         11
Other International                  15                          3
                      -------- -------- -------- -------- -------- --------
Total                    2,358      209       66      427       38       12
                      -------- -------- -------- -------- -------- --------



                         Average Sales Price
                      --------------------------
                                Crude
                                Oil &
                      Natural  Condens-
                        Gas      ate      NGLs
                      Per Mcf  Per Bbl  Per Bbl
                      -------- -------- --------
Quarter Ended June
 30, 2011
United States         $   4.11 $ 104.68 $  56.21
Algeria                          115.93
Other International              114.29
                      -------- -------- --------
Total                 $   4.11 $ 108.99 $  56.21
                      -------- -------- --------

Quarter Ended June
 30, 2010
United States         $   3.79 $  73.89 $  39.05
Algeria                           75.51
Other International               76.18
                      -------- -------- --------
Total                 $   3.79 $  74.49 $  39.05
                      -------- -------- --------

Six Months Ended June
 30, 2011
United States         $   4.02 $  98.23 $  52.47
Algeria                          107.44
Other International              108.81
                      -------- -------- --------
Total                 $   4.02 $ 102.04 $  52.47
                      -------- -------- --------

Six Months Ended June
 30, 2010
United States         $   4.41 $  74.45 $  42.80
Algeria                           75.81
Other International               74.68
                      -------- -------- --------
Total                 $   4.41 $  74.86 $  42.80
                      -------- -------- --------




                                              Average Daily  Sales Volumes
                                              Volumes MBOE/d     MMBOE
                                              -------------- --------------

Quarter Ended June 30, 2011                              685             62
Quarter Ended June 30, 2010                              651             59

Six Months Ended June 30, 2011                           688            124
Six Months Ended June 30, 2010                           668            121






Sales Revenue and Commodity Derivatives


                                                     Commodity Derivatives
                                      Sales               Gain (Loss)
                             ------------------------ --------------------
                                                          Natural Gas
                                     Crude Oil        --------------------
                             Natural     &
millions                       Gas   Condensate NGLs  Realized Unrealized
                             ------- ---------- ----- -------- -----------
Quarter Ended June 30, 2011
United States                $   870 $    1,279 $ 370 $     71 $       (14)
Algeria                                     613
Other International                         344
                             ------- ---------- ----- -------- -----------
Total                        $   870 $    2,236 $ 370 $     71 $       (14)
                             ------- ---------- ----- -------- -----------

Quarter Ended June 30, 2010
United States                $   802 $      872 $ 235 $    163 $      (166)
Algeria                                     364
Other International                         102
                             ------- ---------- ----- -------- -----------
Total                        $   802 $    1,338 $ 235 $    163 $      (166)
                             ------- ---------- ----- -------- -----------

Six Months Ended June 30,
 2011
United States                $ 1,724 $    2,359 $ 703 $    143 $       (61)
Algeria                                   1,104
Other International                         580
                             ------- ---------- ----- -------- -----------
Total                        $ 1,724 $    4,043 $ 703 $    143 $       (61)
                             ------- ---------- ----- -------- -----------

Six Months Ended June 30,
 2010
United States                $ 1,883 $    1,807 $ 509 $    182 $       400
Algeria                                     834
Other International                         199
                             ------- ---------- ----- -------- -----------
Total                        $ 1,883 $    2,840 $ 509 $    182 $       400
                             ------- ---------- ----- -------- -----------



                                 Commodity Derivatives Gain (Loss)
                             ---------------------------------------------
                             Crude Oil & Condensate          NGLs
                             ----------------------- ---------------------
millions                     Realized   Unrealized    Realized  Unrealized
                             ---------  ------------ ---------- ----------
Quarter Ended June 30, 2011
United States                $     (44) $        330 $       -- $       --
Algeria                             --            --
Other International
                             ---------  ------------ ---------- ----------
Total                        $     (44) $        330 $       -- $       --
                             ---------  ------------ ---------- ----------

Quarter Ended June 30, 2010
United States                $      (4) $        261 $       -- $       --
Algeria                              2             8
Other International
                             ---------  ------------ ---------- ----------
Total                        $      (2) $        269 $       -- $       --
                             ---------  ------------ ---------- ----------

Six Months Ended June 30,
 2011
United States                $     (56) $         55 $       -- $       --
Algeria                             (3)            9
Other International
                             ---------  ------------ ---------- ----------
Total                        $     (59) $         64 $       -- $       --
                             ---------  ------------ ---------- ----------

Six Months Ended June 30,
 2010
United States                $      (5) $        256 $       -- $       --
Algeria                              5            14
Other International
                             ---------  ------------ ---------- ----------
Total                        $      --  $        270 $       -- $       --
                             ---------  ------------ ---------- ----------






                      Anadarko Petroleum Corporation
                 Financial and Operating External Guidance
                           As of July 25, 2011


                                     3rd Qtr               Total Year
                                    Guidance               Guidance
                              ---------------------  ---------------------

                                      Units                  Units
                              ---------------------  ---------------------

Total Sales (MMBOE)                 58   -       61       244   -      248

Crude Oil (MBbl/d):                197   -      210       215   -      219

  United States                    119   -      125       127   -      129
  Algeria                           53   -       56        55   -       56
  Other International               25   -       29        33   -       35

Natural Gas (MMcf/d):

  United States                  2,225   -    2,275     2,300   -    2,350

Natural Gas Liquids (MBbl/d):

  United States                     68   -       72        70   -       72



                                     $ / Unit              $ / Unit
                              ---------------------  ---------------------
Price Differentials vs NYMEX
 (w/o hedges)

Crude Oil ($/Bbl):                2.00   -     3.00      2.50   -     3.50

 United States                    0.00   -    (2.00)    (1.00)  -    (2.00)
 Algeria                         10.00   -    12.00     10.00   -    11.00
 Other International              8.00   -    10.00      9.00   -    10.00

Natural Gas ($/Mcf):

 United States                   (0.15)  -    (0.25)    (0.15)  -    (0.25)





                       Anadarko Petroleum Corporation
                Financial and Operating External Guidance
                            As of July 25, 2011



                                           3rd Qtr           Total Year
                                          Guidance           Guidance
                                      -----------------  -----------------
                                            $ MM               $ MM
                                      -----------------  -----------------
Other Revenues:
  Marketing and Gathering Margin          45   -     65     220   -    260
  Minerals and Other                      25   -     35      60   -     80

                                      -----------------  -----------------
Costs and Expenses:
                                            $ / Boe            $ / Boe
                                      -----------------  -----------------
  Oil & Gas Direct Operating            3.90   -   4.20    3.80   -   4.20
  Oil & Gas Transportation/Other        3.30   -   3.55    3.30   -   3.55
  Depreciation, Depletion and
   Amortization                        15.50   -  15.80   15.60   -  15.80
  Production Taxes (% of Revenue)       11.5%  -   12.5%   11.0%  -   12.0%

                                            $ MM               $ MM
                                      -----------------  -----------------
  General and Administrative             260   -    280   1,050   -  1,100
  Exploration Expense
    Non-Cash                             160   -    210     600   -    700
    Cash                                  95   -    120     350   -    400
  Interest Expense (net)                 200   -    220     840   -    850
  Other (Income) Expense                   -   -     20      20   -     40


Tax Rate

Algeria  (All Current)                    55%  -     65%     55%  -     65%
Rest of Company  (All Current for 3Q
 and 35% for FY)                          35%  -     45%     35%  -     45%

                                      -----------------  -----------------

Avg. Shares Outstanding (MM)

  Basic                                  497   -    499     497   -    499
  Diluted                                499   -    501     499   -    501

                                            $ MM               $ MM
                                      -----------------  -----------------
Capital Investment *

  Capital Expenditures                 1,400   -  1,600   6,060   -  6,450
  Capitalized Interest                    35   -     45     140   -    150

* Excludes Western Gas Partners , LP (WES)




                      Anadarko Petroleum Corporation
          Commodity Hedge Positions (Excluding Natural Gas Basis)
                            As of July 25, 2011




                                       Weighted Average Price per MMBtu
                          Volume     --------------------------------------
                         (thousand                   Floor
                          MMBtu/d)    Floor Sold   Purchased   Ceiling Sold
                        ------------ ------------ ------------ ------------
Natural Gas
  Three-Way Collars
  2011                           480 $       5.00 $       6.50 $       8.29
  2012                           500 $       5.00 $       6.50 $       9.03
  2013                           450 $       4.00 $       5.00 $       6.57

  Fixed Price -
   Financial
  2011                            90 $       6.17




                                          Weighted Average Price per barrel
                                     --------------------------------------
                             Volume                  Floor
                           (MBbls/d)  Floor Sold   Purchased   Ceiling Sold
                        ------------ ------------ ------------ ------------
Crude Oil
  Three-Way Collars
  2011                           126 $      64.29 $      79.29 $      99.95
  2012                             2 $      35.00 $      50.00 $      92.50




                      Anadarko Petroleum Corporation
                    Natural Gas Basis Hedge Positions
                            As of July 25, 2011



                                                    Volume
                                                   (thousand    Price per
                                                    MMBtu/d)      MMBtu
                                                  ------------ -----------
Basis Swaps
2011
  Mid Continent                                             15 $     (0.76)
  Rocky Mountains                                           30 $     (2.22)
                                                  ------------ -----------
                                                            45 $     (1.74)





                        Interest Rate Derivatives
                            As of July 25, 2011


                                                       Rate      Rate
Instrument    Notional Amt.    Start Date  Maturity    Paid    Received
            ------------------ ---------- ---------- -------  ----------

Swap        $      750 Million   Oct-2011   Oct-2021    4.72%   3M LIBOR
Swap        $    1,250 Million   Oct-2011   Oct-2041    4.83%   3M LIBOR
Swap        $      250 Million   Oct-2012   Oct-2022    4.91%   3M LIBOR
Swap        $      750 Million   Oct-2012   Oct-2042    4.80%   3M LIBOR

            ------------------ ---------- ---------- -------  ----------





Anadarko Contacts

Media:
John Christiansen
Email Contact
832.636.8736

Brian Cain
Email Contact
832.636.3404

Investors:
John Colglazier
Email Contact
832.636.2306

Clay Gaspar
Email Contact
832.636.2541

Wayne Rodrigs
Email Contact
832.636.2305

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