Anadarko Announces Second-Quarter Results

Anadarko Announces Second-Quarter Results 
HOUSTON, TX -- (Marketwire) -- 07/30/12 --  Anadarko Petroleum
Corporation (NYSE: APC) today announced a second-quarter 2012 net
loss attributable to common stockholders of $380 million, or $0.76
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 $804
million, or $1.61 per share (diluted), on an after-tax basis.(1) Cash
flow from operating activities in the second quarter of 2012 was
approximately $2 billion, and discretionary cash flow totaled $1.951
billion.(2) 
Second-Quarter 2012 Highlights 


 
--  Delivered record daily sales volumes of 742,000 barrels of oil
    equivalent (BOE)
--  Increased oil sales volumes by approximately 20,000 barrels per day
    over first-quarter 2012
--  Generated more than $1.9 billion of discretionary cash flow from
    operating activities
--  Discovered second major natural gas complex offshore Mozambique
--  Increased estimated recoverable resources at the Gulf of Mexico Vito
    field to more than 300 million BOE

  
"Anadarko's positive momentum continued through the second quarter of
2012 with strong operating performance, delivering record sales
volumes and enabling us to increase the midpoint of our full-year
sales-volumes guidance by 3 million BOE without increasing capital,"
Anadarko President and CEO Al Walker said. "With record sales volumes
and significant free cash flow during the first half of the year, our
deep portfolio and efficient capital allocation continues to deliver
growth and value in the current price environment. We are committed
to operating within cash flow and selectively accelerating the value
of longer-dated projects, as we did at the Gulf of Mexico Lucius
development and the Salt Creek field in Wyoming during the quarter.
The execution of our strategy is expected to continue to deliver
industry-leading operating performance and exploration success,
offering very competitive value-creation opportunities."  
Operations Summary
 Sales volumes in the second quarter rose to a
record 68 million BOE, or 742,000 BOE per day, an 8-percent increase
over the second quarter of 2011. During the quarter, oil 
volumes
averaged approximately 241,000 barrels per day, natural gas liquids
averaged 77,000 barrels per day and natural gas averaged 2.54 billion
cubic feet per day.  
The company's record sales volumes were highlighted by an increase of
approximately 20,000 barrels of oil per day (BOPD) over the first
quarter of 2012. This growth was driven by the Wattenberg HZ
(horizontal) program in northeast Colorado, Caesar/Tonga in the
deepwater Gulf of Mexico and increased volumes resulting from the
Algeria tax resolution. In Wattenberg, net sales volumes averaged
approximately 85,000 BOE per day during the quarter. The company is
currently producing from about 75 horizontal wells in the Wattenberg
field that are delivering excellent results and rates of return
exceeding 100 percent in the current price environment. Anadarko is
currently running seven horizontal rigs in the play with plans to
increase to 10 rigs over the next few months. The company also
benefited from the first full quarter of production at Caesar/Tonga,
which averaged approximately 40,000 BOPD gross from three wells.
Anadarko plans to spud a fourth well in the development during the
third quarter of 2012. In addition, the Eagleford Shale, East Texas
HZ, Greater Natural Buttes and Marcellus Shale each achieved record
sales volumes during the quarter.  
Exploration Summary 
 Anadarko continued an active and successful
exploration and appraisal program during the second quarter of 2012.
Offshore Mozambique, the company extended its exploration success
beyond the Prosperidade complex with the discoveries of Golfinho and
Atum, forming the company's second major natural gas complex. The
Golfinho/Atum complex is estimated to hold 10 to 30-plus trillion
cubic feet of recoverable natural gas resources and is completely
contained within the Offshore Area 1 block. Anadarko has begun an
accelerated four-well appraisal program at Golfinho/Atum, with the
first appraisal well encountering 254 net feet of natural gas pay.
Significant progress was also made during the quarter at the
company's Prosperidade complex, where the appraisal drilling program
was successfully completed, and well testing is ongoing. 
In West Africa, Anadarko announced its first significant discovery
offshore Cote d'Ivoire with the successful Paon exploration well in
the CI-103 block during the quarter. The well encountered more than
100 net feet of light oil pay in Turonian-aged sands and confirmed
the Upper Cretaceous fan system present in Ghana extends westward
into Cote d'Ivoire. In July, the company announced that the
successful Wawa exploration well, located in the Deepwater Tano Block
offshore Ghana, encountered approximately 108 net feet of oil and
gas-condensate pay. Data indicate the Wawa discovery is a separate
and distinct accumulation north of the TEN (Tweneboa, Enyenra and
Ntomme) complex, and it extends the presence of hydrocarbon-bearing
formations more than six miles north of the Enyenra-3A well. Within
the TEN complex, the partnership's active appraisal program continued
with a successful drillstem test at the Ntomme discovery. The well
flowed at facility-constrained rates of more than 20,000 BOPD from
two zones. These results provide additional confidence in advancing
the TEN complex toward a Plan of Development, which is expected to be
submitted to the Ghanaian government in the next few months.  
In the Gulf of Mexico, Anadarko announced a successful sidetrack
appraisal well at the Heidelberg field in the Green Canyon area,
advancing the project closer to sanction, which is expected in early
2013. In the Mississippi Canyon area, the third successful appraisal
well of the Vito discovery encountered approximately 620 net feet of
oil pay, leading the partnership to significantly increase Vito's
estimated recoverable resources to more than 300 million BOE from the
previous estimate of more than 200 million BOE.  
Early in the second quarter, Anadarko closed the $400 million
joint-venture agreement for future development costs at its Salt
Creek Enhanced Oil Recovery field in Wyoming. Later in the quarter,
the company signed a definitive agreement to enter into a joint
venture for the Lucius development in the deepwater Gulf of Mexico.
Under the terms of the definitive agreement, Anadarko will be carried
for $556 million, which is estimated to represent 100 percent of its
expected capital obligation at Lucius through first production. In
exchange, Anadarko will convey a 7.2-percent working interest in the
Lucius development and will continue as operator with a 27.8-percent
working interest. The transaction is expected to close during the
third quarter and is subject to customary closing conditions.  
Operations Report
 For more details on Anadarko's operations and
exploration results, please refer to the comprehensive report on
second-quarter 2012 activity. The report is available at
www.anadarko.com on the Investor Relations page. 
Financial Summary
 Anadarko ended the second quarter of 2012 with
approximately $2.8 billion of cash on hand and generated
approximately $142 million of free cash flow,(2) which includes the
impact of $123 million of capital expenditures incurred by Western
Gas Partners, LP (NYSE: WES). In addition to the free cash flow, 
Anadarko received approximately $113 million associated with the
Algeria tax resolution, representing the first collection of an
expected recoupment of approximately $1 billion during 2012. The
company also reduced the outstanding balance of its revolving credit
facility by approximately $800 million during the quarter, lowering
its net debt(2) to approximately $12 billion and its net debt to
adjusted capital ratio(2) to less than 38 percent.  
As described in the items affecting comparability on page six of the
release, the company recorded a non-cash charge of $978 million
primarily related to the impairment of coalbed methane properties as
a result of low natural gas prices.  
Tronox
 The company continues
to seek a reasonable resolution of the Tronox Adversary Proceeding
(the Proceeding), although the parties have not reached a mutually
acceptable agreement as of the date of this release. Anadarko's
second-quarter results included in this release are preliminary and
do not reflect any updates to the financial reserve and associated
taxes related to the Proceeding. The company's second-quarter Form
10-Q, to be filed on or before Aug. 9, 2012, will include updated
disclosure regarding the Proceeding and any adjustments to these
financial statements as appropriate. 
Conference Call Tomorrow at 9 a.m. CDT, 10 a.m. EDT
 Anadarko will
host a conference call on Tuesday, July 31, 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 2012. The dial-in number is 855.812.0464 in the
United States, or 970.300.2271 internationally. The confirmation
number is 98298659. 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 be available on the website for approximately 30 days
following the conference call.  
Financial Data
 Eight pages of summary financial data follow,
including current hedge positions and updated financial and
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 2011, the company had
approximately 2.54 billion barrels-equivalent of proved reserves,
making it one of the world's largest independent exploration and
production companies. For more information about Anadarko and APC
Flash Feed updates, 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 drill, develop and commercially operate the drilling
prospects identified in this news release, to meet financial and
operating guidance, to consummate the transactions identified in this
news release, and to successfully plan, build and operate an LNG
project. See "Risk Factors" in the company's 2011 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
"recoverable natural gas resources," "estimated recoverable
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, 2011, 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, 2012   
                                            ------------------------------- 
                                              Before     After    Per Share 
millions except per-share amounts              Tax        Tax     (diluted) 
                                            ---------  ---------  --------- 
Unrealized gains (losses) on derivatives,                                   
 net*                                       $    (225) $    (143) $   (0.29)
Gains (losses) on divestitures, net               (12)        (8)     (0.02)
Impairments, including unproved properties       (978)      (628)     (1.26)
Gulf of Mexico accelerated depreciation,                                    
 depletion, and amortization                      (34)       (22)     (0.04)
Change in uncertain tax positions (FIN 48)         --         (1)        -- 
Deepwater Horizon settlement and related                                    
 costs                                             (3)        (2)        -- 
                                            ---------  ---------  --------- 
                                            $  (1,252) $    (804) $   (1.61)
                                            ========== ========== ========= 

 
* For the quarter ended June 30, 2012, before-tax unrealized gains
(losses) on derivatives, net includes $157 million related to
commodity derivatives, $(374) million related to other derivatives,
and $(8) million related to gathering, processing, and marketing
sales.  


 
                                                                            
                                              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, including unproved properties       (147)       (95)     (0.19)
Change in uncertain tax positions (FIN 48)         --          3       0.01 
Deepwater Horizon settlement and related                                    
 costs                                             (9)        (6)     (0.01)
                                            ---------  ---------  --------- 
                                            $     (72) $     (63) $   (0.13)
                                            =========  =========  ========= 

 
* 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. 
Reconciliation of GAAP to Non-GAAP Measures 
Below are reconciliations of cash provided by operating activities
(GAAP) to discretionary cash flow from operations (non-GAAP), free
cash flow (non-GAAP), and adjusted free cash flow (non-GAAP), as well
as 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 because it is useful in comparisons of oil
and gas exploration and production companies as it excludes
fluctuations in assets and liabilities. Management uses free cash
flow and adjusted free cash flow to demonstrate the Company's ability
to internally fund capital expenditures and to service or incur
additional debt. 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                        2012        2011        2012        2011    
                             ----------  ----------  ----------  ---------- 
Net cash provided by                                                        
 operating activities        $    1,999  $    1,837  $    3,890  $    3,126 
Add back:                                                                   
  Deepwater Horizon                                                         
   settlement and related                                                   
   costs                              9           9         (13)         35 
  Algeria exceptional                                                       
   profits tax settlement          (113)         --        (113)         -- 
  Change in accounts                                                        
   receivable                      (256)        284        (229)        535 
  Change in accounts payable                                                
   and accrued expenses             228        (418)        486        (241)
  Change in other items--net         84         135        (148)         92 
                             ----------  ----------  ----------  ---------- 
Discretionary cash flow from                                                
 operations                  $    1,951  $    1,847  $    3,873  $    3,547 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                 Reconciliation of GAAP to Non-GAAP Measures                
                                                                            
                                     Quarter Ended        Six Months Ended  
                                        June 30,              June 30,      
                                 --------------------- ---------------------
millions                            2012       2011       2012       2011   
                                 ---------- ---------- ---------- ----------
Discretionary cash flow from                                                
 operations                      $    1,951 $    1,847 $    3,873 $    3,547
Less: Capital expenditures*           1,809      1,721      3,599      3,308
                                 ---------- ---------- ---------- ----------
Free cash flow                   $      142 $      126 $      274 $      239
                                 ========== ========== ========== ==========
Collection of Algeria                                                       
 exceptional profits tax                                                    
 receivable                             113         --        113         --
                                 ---------- ---------- ---------- ----------
Adjusted free cash flow          $      255 $      126 $      387 $      239
                                 ========== ========== ========== ==========

 
* Includes Western Gas Partners, LP (WES) capital expenditures of $123
million and $21 million for the three months ended June 30, 2012 and
2011, respectively, and $221 million and $338 million for the six
months ended June 30, 2012 and 2011, respectively.  


 
                                                                            
                                                                            
                                     Quarter Ended         Quarter Ended    
                                     June 30, 2012         June 30, 2011    
                                 --------------------  -------------------- 
millions except per-share                                                   
 amounts                           After    Per Share    After    Per Share 
                                    Tax     (diluted)     Tax     (diluted) 
                                 ---------  ---------  ---------  --------- 
Net income (loss) attributable                                              
 to common stockholders          $    (380) $   (0.76) $     544  $    1.08 
Less: Certain items affecting                                               
 comparability                        (804)     (1.61)       (63)     (0.13)
                                 ---------  ---------  ---------  --------- 
Adjusted net income (loss)       $     424  $    0.85  $     607  $    1.21 
                                 =========  =========  =========  ========= 

 
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, 2012 
                                                             -------------- 
Total debt                                                   $       14,832 
Less: Cash and cash equivalents                                       2,794 
                                                             -------------- 
Net debt   
                                                  $       12,038 
                                                             ============== 
                                                                            
Net debt                                                     $       12,038 
Stockholders' equity                                                 19,945 
                                                             -------------- 
Adjusted capitalization                                      $       31,983 
                                                             ============== 
                                                                            
                                                             -------------- 
Net debt to adjusted capitalization ratio                                38%
                                                             ============== 
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                                (Unaudited)                                 
                                                                            
                                     Quarter Ended       Six Months Ended   
Summary Financial Information          June 30,              June 30,       
                                 --------------------  -------------------- 
millions except per-share                                                   
 amounts                            2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Consolidated Statements of                                                  
 Income                                                                     
Revenues and Other                                                          
Natural-gas sales                $     496  $     870  $   1,069  $   1,724 
Oil and condensate sales             2,222      2,236      4,466      4,043 
Natural-gas liquids sales              282        370        624        703 
Gathering, processing, and                                                  
 marketing sales                       200        258        453        488 
Gains (losses) on divestitures                                              
 and other, net                         22        (58)        57        (29)
                                 ---------  ---------  ---------  --------- 
Total                                3,222      3,676      6,669      6,929 
                                 =========  =========  =========  ========= 
Costs and Expenses                                                          
                                 ---------  ---------  ---------  --------- 
Oil and gas operating                  249        236        491        468 
Oil and gas transportation and                                              
 other                                 223        207        463        416 
Exploration                          1,121        236      1,365        415 
Gathering, processing, and                                                  
 marketing                             178        205        367        376 
General and administrative             262        282        531        491 
Depreciation, depletion, and                                                
 amortization                        1,027        985      1,957      1,970 
Other taxes                            326        413        703        757 
Impairments                            112        102        162        104 
Algeria exceptional profits tax                                             
 settlement                             --         --     (1,804)        -- 
Deepwater Horizon settlement and                                            
 related costs                           3          9         11         35 
                                 ---------  ---------  ---------  --------- 
Total                                3,501      2,675      4,246      5,032 
                                 =========  =========  =========  ========= 
Operating Income (Loss)               (279)     1,001      2,423      1,897 
                                 =========  =========  =========  ========= 
Other (Income) Expense                                                      
                                 ---------  ---------  ---------  --------- 
Interest expense                       190        216        376        436 
(Gains) losses on commodity                                                 
 derivatives, net                     (420)      (343)      (468)       (87)
(Gains) losses on other                                                     
 derivatives, net                      376        144        140         85 
Other (income) expense, net              6        (18)       271        (42)
                                 ---------  ---------  ---------  --------- 
Total                                  152         (1)       319        392 
                                 =========  =========  =========  ========= 
Income (Loss) Before Income                                                 
 Taxes                                (431)     1,002      2,104      1,505 
                                 =========  =========  =========  ========= 
Income Tax Expense (Benefit)           (70)       440        282        706 
                                 =========  =========  =========  ========= 
Net Income (Loss)                $    (361) $     562  $   1,822  $     799 
                                 =========  =========  =========  ========= 
Net Income Attributable to                                                  
 Noncontrolling Interests               19         18         46         39 
                                 =========  =========  =========  ========= 
Net Income (Loss) Attributable                                              
 to Common Stockholders          $    (380) $     544  $   1,776  $     760 
                                 =========  =========  =========  ========= 
Per Common Share:                                                           
                                 =========  =========  =========  ========= 
Net income (loss) attributable                                              
 to common stockholders--basic   $   (0.76) $    1.09  $    3.54  $    1.52 
Net income (loss) attributable                                              
 to common stockholders--diluted $   (0.76) $    1.08  $    3.52  $    1.51 
                                 =========  =========  =========  ========= 
Average Number of Common Shares                                             
 Outstanding--Basic                    500        498        499        497 
                                 =========  =========  =========  ========= 
Average Number of Common Shares                                             
 Outstanding--Diluted                  500        500        501        499 
                                 =========  =========  =========  ========= 
                                                                            
Exploration Expense                                                         
                                 ---------  ---------  ---------  --------- 
Dry hole expense                 $     115  $      42  $     204  $      58 
Impairments of unproved                                                     
 properties                            923         95        983        169 
Geological and geophysical                                                  
 expense                                14         52         49        100 
Exploration overhead and other          69         47        129         88 
             
                    ---------  ---------  ---------  --------- 
Total                            $   1,121  $     236  $   1,365  $     415 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                                (Unaudited)                                 
                                                                            
                                     Quarter Ended       Six Months Ended   
Summary Financial Information          June 30,              June 30,       
                                 --------------------  -------------------- 
millions                            2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Cash Flows from Operating                                                   
 Activities                                                                 
Net income (loss)                $    (361) $     562  $   1,822  $     799 
Depreciation, depletion, and                                                
 amortization                        1,027        985      1,957      1,970 
Deferred income taxes                 (179)       185         31        258 
Dry hole expense and impairments                                            
 of unproved properties              1,038        137      1,187        227 
Impairments                            112        102        162        104 
(Gains) losses on divestitures,                                             
 net                                    12         18         29         18 
Unrealized (gains) losses on                                                
 derivatives, net                      225       (178)        83         75 
Deepwater Horizon settlement and                                            
 related costs                           3          9         11         35 
Algeria exceptional profits tax                                             
 settlement                             --         --     (1,804)        -- 
Tronox-related contingent loss          --         --        275         -- 
Other                                   74         27        120         61 
                                 ---------  ---------  ---------  --------- 
Discretionary Cash Flow from                                                
 Operations                          1,951      1,847      3,873      3,547 
Deepwater Horizon settlement and                                            
 related costs                          (9)        (9)        13        (35)
Algeria exceptional profits tax                                             
 settlement                            113         --        113         -- 
(Increase) decrease in accounts                                             
 receivable                            256       (284)       229       (535)
Increase (decrease) in accounts                                             
 payable and accrued expenses         (228)       418       (486)       241 
Other items--net                       (84)      (135)       148        (92)
                                 ---------  ---------  ---------  --------- 
Net Cash Provided by Operating                                              
 Activities                      $   1,999  $   1,837  $   3,890  $   3,126 
                                 =========  =========  =========  ========= 
                                                                            
                                 =========  =========  =========  ========= 
Capital Expenditures             $   1,809  $   1,721  $   3,599  $   3,308 
                                 ---------  ---------  ---------  --------- 
                                                                            
                                                                            
                                                   June 30,    December 31, 
millions                                             2012          2011     
                                                 ------------  ------------ 
Condensed Balance Sheets                                                    
Cash and cash equivalents                        $      2,794  $      2,697 
Algeria exceptional profits tax settlement              1,629            -- 
Other current assets                                    4,129         4,234 
Net properties and equipment                           37,484        37,501 
Other assets                                            1,661         1,516 
Goodwill and other intangible assets                    5,757         5,831 
                                                 ------------  ------------ 
Total Assets                                     $     53,454  $     51,779 
                                                 ------------  ------------ 
Current debt                                     $      1,739  $        170 
Other current liabilities                               4,669         4,729 
Long-term debt                                         13,093        15,060 
Other long-term liabilities                            12,966        12,837 
Stockholders' equity                                   19,945        18,105 
Noncontrolling interests                                1,042           878 
                                                 ------------  ------------ 
Total Liabilities and Equity                     $     53,454  $     51,779 
                                                 ============  ============ 
Capitalization                                                              
                                                 ------------  ------------ 
Total debt                                       $     14,832  $     15,230 
Stockholders' equity                                   19,945        18,105 
                                                 ------------  ------------ 
Total                                            $     34,777  $     33,335 
                                                 ============  ============ 
Capitalization Ratios                                                       
                                                 ------------  ------------ 
Total debt                                                 43%           46%
Stockholders' equity                                       57%           54%
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                                 (Unaudited)                                
                                                                            
Sales Volumes and                                                           
Prices                                                                      
                                                                            
                         Average Daily Volumes          Sales Volumes       
                      -------------------------- -------------------------- 
                               Crude Oil                  Crude Oil         
                      Natural      &             Natural      &             
                        Gas   Condensate   NGLs    Gas   Condensate   NGLs  
                       MMcf/d   MBbls/d  MBbls/d   Bcf     MMBbls    MMBbls 
                      ------- ---------- ------- ------- ---------- ------- 
Quarter Ended J
une                                                          
 30, 2012                                                                   
United States           2,544        156      77     230         15       7 
Algeria                    --         59      --      --          5      -- 
Other International        --         26      --      --          3      -- 
                      ------- ---------- ------- ------- ---------- ------- 
Total                   2,544        241      77     230         23       7 
                      ------- ---------- ------- ------- ---------- ------- 
                                                                            
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 
                      ------- ---------- ------- ------- ---------- ------- 
                                                                            
Six Months Ended June                                                       
 30, 2012                                                                   
United States           2,480        148      78     450         27      14 
Algeria                    --         54      --      --         10      -- 
Other International        --         30      --      --          6      -- 
                      ------- ---------- ------- ------- ---------- ------- 
Total                   2,480        232      78     450         43      14 
                      ------- ---------- ------- ------- ---------- ------- 
                                                                            
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 
                      ------- ---------- ------- ------- ---------- ------- 
                                                                            
                      ======= ========== ======= ======= ========== ======= 
 
         Anadarko Petroleum Corporation        
                  (Unaudited)                  
                                               
Sales Volumes and                              
Prices                                         
                                               
                         Average Sales Price   
                     --------------------------
                              Crude Oil        
                     Natural      &            
                       Gas   Condensate   NGLs 
                     Per Mcf   Per Bbl  Per Bbl
                     ------- ---------- -------
Quarter Ended June                             
 30, 2012                                      
United States        $  2.15 $    98.20 $ 40.41
Algeria                   --     103.61      --
Other International       --     113.95      --
                     ------- ---------- -------
Total                $  2.15 $   101.22 $ 40.41
                     ------- ---------- -------
                                               
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
                     ------- ---------- -------
                                               
Six Months Ended June                          
 30, 2012                                      
United States        $  2.37 $   101.76 $ 43.82
Algeria                   --     110.88      --
Other International       --     117.72      --
                     ------- ---------- -------
Total                $  2.37 $   105.94 $ 43.82
                     ------- ---------- -------
                                               
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
                     ------- ---------- -------
                                               
                     ======= ========== =======
                                                                            
                         Average Daily    Sales Volumes                     
                        Volumes MBOE/d        MMBOE                         
                      ------------------ ---------------                    
                                                                            
Quarter Ended June                                                          
 30, 2012                     742               68                          
Quarter Ended June                                                          
 30, 2011                     685               62                          
                                                                            
Six Months Ended June                                                       
 30, 2012                     723              132                          
Six Months Ended June                                                       
 30, 2011                     688              124                          
                                                                            
                      ================== ===============                    
                                                                            
             
                                               
                                               
                                               
Sales Revenue and                         
 Commodity Derivatives                    
                                          
                          Sales           
               -------------------------- 
                                          
                                          
                        Crude Oil         
               Natural      &             
millions         Gas   Condensate   NGLs  
               ------- ---------- ------- 
Quarter Ended                             
 June 30, 2012                            
United States  $   496 $    1,396 $   282 
Algeria             --        558      -- 
Other                                     
 International      --        268      -- 
               ------- ---------- ------- 
Total          $   496 $    2,222 $   282 
               ------- ---------- ------- 
                                          
Quarter Ended                             
 June 30, 2011                            
United States  $   870 $    1,279 $   370 
Algeria             --        613      -- 
Other                                     
 International      --        344      -- 
               ------- ---------- ------- 
Total          $   870 $    2,236 $   370 
               ------- ---------- ------- 
                                          
Six Months       
                         
 Ended June 30,                           
 2012                                     
United States  $ 1,069 $    2,735 $   624 
Algeria             --      1,096      -- 
Other                                     
 International      --        635      -- 
               ------- ---------- ------- 
Total          $ 1,069 $    4,466 $   624 
               ------- ---------- ------- 
                                          
Six Months                                
 Ended June 30,                           
 2011                                     
United States  $ 1,724 $    2,359 $   703 
Algeria             --      1,104      -- 
Other                                     
 International      --        580      -- 
               ------- ---------- ------- 
Total          $ 1,724 $    4,043 $   703 
               ------- ---------- ------- 
                                          
                                          
                                          
 
Sales Revenue                                                               
 and Commodity                                                              
 Derivatives                                                                
                                                                            
                             Commodity Derivatives Gain (Loss)              
               -------------------------------------------------------------
                                         Crude Oil &                        
                   Natural Gas           Condensate              NGLs       
               -------------------  -------------------- -------------------
millions       Realized Unrealized  Realized  Unrealized Realized Unrealized
               -------- ----------  --------  ---------- -------- ----------
Quarter Ended                                                               
 June 30, 2012                                                              
United States  $    224 $     (288) $     20  $      414 $      3 $       31
Algeria              --         --        16          --       --         --
Other                                                                       
 International       --         --        --          --       --         --
               -------- ----------  --------  ---------- -------- ----------
Total          $    224 $     (288) $     36  $      414 $      3 $       31
               -------- ----------  --------  ---------- -------- ----------
                                                                            
Quarter Ended                                                               
 June 30, 2011                                                              
United States  $     71 $      (14) $    (44) $      330 $     -- $       --
Algeria              --         --        --          --       --         --
Other                                                                       
 International       --         --        --          --       --         --
               -------- ----------  --------  ---------- -------- ----------
Total          $     71 $      (14) $    (44) $      330 $     -- $       --
               -------- ----------  --------  ---------- -------- ----------
                                                                            
Six Months                                                                  
 Ended June 30,                                                             
 2012                                                                       
United States  $    394 $     (202) $     15  $      241 $      3 $       29
Algeria              --         --       (12)         --       --         --
Other                                                                       
 International       --         --        --          --       --         --
               -------- ----------  --------  ---------- -------- ----------
Total          $    394 $     (202) $      3  $      241 $      3 $       29
               -------- ----------  --------  ---------- -------- ----------
                                                                            
Six Months                                                                  
 Ended June 30,                                                             
 2011                                                                       
United States  $    143 $      (61) $    (56) $       55 $     -- $       --
Algeria              --         --        (3)          9       --         --
Other                                                                       
 International       --         --        --          --       --         --
               -------- ----------  --------  ---------- -------- ----------
Total          $    143 $      (61) $    (59) $       64 $     -- $       --
               -------- ----------  --------  ---------- -------- ----------
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                  Financial and Operating External Guidance                 
                             As of July 30, 2012                            
                                                                            
                                                                            
                                             3rd Qtr           Total Year   
                                            Guidance            Guidance    
                                        ----------------    ----------------
                                                                            
                                              Units               Units     
                                        ----------------    ----------------
                                                                            
Total Sales (MMBOE)                        65   -   67        261   -  265  
Total Sales (MBOE/d)                      707   -  728        713   -  724  
                                                                            
Crude Oil (MBbl/d):                       232   -  241        233   -  239  
                                                                            
  United States                           149   -  153        151   -  153  
  Algeria                                  53   -   55         55   -   57  
  Other International                      30   -   33         27   -   29  
                                                                            
Natural Gas (MMcf/d):                                                       
                                                                            
  United States                          2,390  - 2,415      2,410  - 2,425 
                                                                            
Natural Gas Liquids (MBbl/d):                                               
                                                                            
  United States                            84   -   90         80   -   83  
                                                                            
                                        ----------------    ----------------
                                                                            
                                            $ / Unit            $ / Unit    
                                        ----------------    ----------------
Price Differentials vs NYMEX (w/o                                           
 hedges)                                                                    
                                                                            
Crude Oil ($/Bbl):                        3.00  -  7.
00       5.00  -  7.00 
                                                                            
  United States                           1.00  -  3.00       1.00  -  3.00 
  Algeria                                10.00  - 14.00      11.00  - 14.00 
  Other International                    11.00  - 15.00      12.00  - 15.00 
                                                                            
Natural Gas ($/Mcf):                                                        
                                                                            
  United States                          (0.10) - (0.15)     (0.05) - (0.15)
                                                                            
                                                                            
                                        ----------------    ----------------
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
                  Financial and Operating External Guidance                 
                             As of July 30, 2012                            
                                                                            
                                                                            
                                             3rd Qtr           Total Year   
                                            Guidance            Guidance*   
                                        ----------------    ----------------
                                                                            
                                              $ MM                $ MM      
                                        ----------------    ----------------
Other Revenues:                                                             
  Marketing and Gathering Margin             20 -   40          160 -  180  
  Minerals and Other                         30 -   35          145 -  165  
                                                                            
                                        ----------------    ----------------
Costs and Expenses:                                                         
                                             $ / BOE             $ / BOE    
                                        ----------------    ----------------
                                                                            
  Oil & Gas Direct Operating               4.00 -  4.25        3.95 -  4.15 
  Oil & Gas Transportation/Other           3.75 -  3.95        3.60 -  3.80 
  Depreciation, Depletion and                                               
   Amortization                           14.50 - 15.00       14.50 - 14.75 
  Production Taxes (% of Revenue)          9.0% - 10.0%       10.0% - 11.0% 
                                                                            
                                              $ MM                $ MM      
                                        ----------------    ----------------
                                                                            
  General and Administrative                280 -  300        1,075 - 1,175 
  Exploration Expense                                                       
    Non-Cash                                150 -  200          650 -  750  
    Cash                                    115 -  125          410 -  440  
  Interest Expense (net)                    190 -  195          760 -  775  
  Other (Income) Expense                      - -  (20)          60 -  100  
                                                                            
Tax Rate:                                                                   
  Algeria (All current)                     45% -  50%          50% -  55%  
  Rest of Company (65% Current for 3Q                                       
   and 20% for FY)                          60% -  65%          45% -  50%  
                                                                            
                                                                            
                                                                            
                                        ----------------    ----------------
                                                                            
Avg. Shares Outstanding (MM)                                                
                                                                            
  Basic                                     499 -  501          499 -  501  
  Diluted                                   501 -  503          501 -  503  
                                                                            
Capital Investment (Excluding Western                                       
 Gas Partners, LP)                            $ MM                $ MM      
                                        ----------------    ----------------
                                                                            
                                                                            
  APC Capital Expenditures                1,650 - 1,800       6,400 - 6,700 
  Capitalized Interest                       45 -   55          195 -  215  

 
* Excluding items affecting comparability 


 
                                                                            
                                                                            
                                                                            
                       Anadarko Petroleum Corporation                       
           Commodity Hedge Positions (Excluding Natural Gas Basis)          
                             As of July 30, 2012        
                    
                                                                            
                                                                            
                                                                            
                                               Weighted Average Price per   
                                                         Barrel             
                                            --------------------------------
                                                                            
                                   Volume                 Floor     Ceiling 
                                  (MBbls/d) Floor Sold  Purchased    Sold   
                                 ---------- ---------- ---------- ----------
Crude Oil                                                                   
  Three-Way Collars                                                         
  2012                                                                      
        Brent                            45 $    85.00 $   105.00 $   125.60
        WTI                              17 $    71.36 $    90.91 $   113.30
                                 ---------- ---------- ---------- ----------
                                         62 $    81.34 $   101.22 $   122.30
                                                                            
  Fixed Price - Financial                                                   
  2012                                                                      
        Brent                            40 $   110.10                      
        WTI                              20 $   101.39                      
                                 ---------- ----------                      
                                         60 $   107.19                      
                                                                            
                                                                            
 
                                                                            
                                                                            
                                             Weighted                       
                                   Volume     Average                       
                                  (thousand  Price per                      
                                  MMBtu/d)     MMBtu                        
                                 ---------- ----------                      
Natural Gas                                                                 
  Fixed Price - Financial                                                   
  2012                                1,000 $     4.69                      
  2013                                  900 $     4.00                      
                                                                            
                                                                            
                                                                            
                          Interest Rate Derivatives                         
                             As of July 30, 2012                            
                                                                            
Instrument  Notional Amt.  Start Date    Maturity   Rate Paid  Rate Received
---------- -------------- ------------ ------------ --------- --------------
                                                                            
   Swap     $250 Million  October 2012 October 2022   4.91%      3M LIBOR   
   Swap     $750 Million  October 2012 October 2042   4.80%      3M LIBOR   
   Swap     $750 Million    June 2014    June 2024    6.00%      3M LIBOR   
   Swap    $1,100 Million   June 2014    June 2044    5.57%      3M LIBOR   

  
Anadarko Contacts 
Media:
John Christiansen
john.christiansen@anadarko.com
832.636.8736 
Brian Cain
brian.cain@anadarko.com
832.636.3404 
Christina Ramirez
christina.ramirez@anadarko.com
832.636.8687 
Investors:
John Colglazier
john.colglazier@anadarko.com
832.636.2306 
Wayne Rodrigs
wayne.rodrigs@anadarko.com
832.636.2305 
 
 
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