Anadarko Announces 2013 Fourth-Quarter and Full-Year Results

Anadarko Announces 2013 Fourth-Quarter and Full-Year Results  HOUSTON, TX -- (Marketwired) -- 02/03/14 --  Anadarko Petroleum Corporation (NYSE: APC) today announced 2013 fourth-quarter results, reporting a net loss attributable to common stockholders of $770 million, or $1.53 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items, which include a Tronox-related loss accrual, decreased net income by approximately $1.145 billion, or $2.27 per share (diluted), on an after-tax basis.(1) Cash flow from operating activities in the fourth quarter of 2013 was approximately $2.104 billion, and discretionary cash flow totaled $2.049 billion.(2)  For the year ended Dec. 31, 2013, Anadarko reported net income attributable to common stockholders of $801 million, or $1.58 per share (diluted), and full-year 2013 cash flow from operating activities was $8.888 billion. Discretionary cash flow for the year totaled $8.033 billion.(2)  2013 Highlights      --  Delivered record sales volumes, including an increase of more than     32,000 barrels-per-day in liquids volumes over 2012 from core     horizontal growth plays in Wattenberg, Eagleford and East Texas/North     Louisiana --  Accelerated approximately $4.5 billion of value through announced     asset monetizations --  Reached milestones at multiple large oil projects with first oil at El     Merk, the installation of the Lucius spar, and the sanctioning of the     Heidelberg and TEN developments, along with progressing liquefied     natural gas (LNG) off-take agreements --  Achieved a 67-percent deepwater exploration/appraisal success rate     "In 2013, Anadarko built upon its multi-year track record of delivering consistent results, with an approximate 7-percent year-over-year increase in daily sales volumes, industry-leading deepwater exploration/appraisal success, unmatched portfolio management, and a 194-percent reserve-replacement ratio (before the effects of price revisions) at very competitive costs," said Al Walker, Anadarko Chairman, President and CEO. "I'm extraordinarily proud of the ability and focus demonstrated by our employees and the resiliency of our portfolio in meeting or exceeding our 2013 goals. I'm confident we'll continue to deliver differentiating results in 2014 and longer term through our focus on value acceleration, margin expansion and investment returns."  Sales Volumes and Proved Reserves  Anadarko's full-year sales volumes of natural gas, crude oil and natural gas liquids (NGLs) totaled a record 285 million barrels of oil equivalent (BOE), or an average of 781,000 BOE per day, representing an increase of approximately 7 percent over full-year 2012 sales volumes of 732,000 BOE per day. Fourth-quarter 2013 sales volumes of natural gas, crude oil and NGLs totaled 74 million BOE, or an average of 806,000 BOE per day.  Anadarko added 551 million BOE of proved reserves in 2013 before the effects of price revisions and incurred oil and natural gas exploration and development costs of $7.468 billion.(2) The company estimates its proved reserves at year-end 2013 totaled 2.79 billion BOE, with 72 percent of its reserves categorized as proved developed. At year-end 2013, Anadarko's proved reserves were comprised of 45 percent liquids and 55 percent natural gas.   U.S. Onshore Highlights  Anadarko's U.S. onshore operating areas achieved a 25-percent increase in oil volumes for full-year 2013 relative to 2012, driven by record production in several major growth plays, including the Wattenberg field, Eagleford Shale and East Texas/North Louisiana Horizontal play.   Anadarko's operated Wattenberg Horizontal program averaged more than 56,000 BOE per day in 2013, up almost 34,000 BOE per day over 2012, with the fourth quarter averaging more than 72,000 BOE per day. In October, the company announced a property exchange, which consolidated Anadarko's core acreage position, enabling more efficient development planning and utilization of infrastructure. Additionally, Wattenberg crude oil export capacity was expanded with the Plains Rail Terminal, which began operations in November. Construction is more than 90-percent complete at the Lancaster plant and the Front Range pipeline, which are both expected to be commissioned during the first quarter of 2014.   Strong performance in the Eagleford Shale, East Texas/North Louisiana Horizontal and Marcellus Shale contributed to an average increase of 59,000 BOE per day during 2013 in the Southern and Appalachia Region. Evaluation continued during the fourth quarter in the Wolfcamp opportunity in the Delaware Basin. To date, Anadarko has drilled 29 wells and is currently running seven operated rigs in the Wolfcamp Shale.   Mega-Project Milestones  In 2013, Anadarko achieved first oil at the El Merk development in Algeria. All three facilities are now operational, with recent net production achieving a rate of more than 30,000 barrels per day.  In the deepwater Gulf of Mexico, the company completed installation of the 80,000-barrels-of-oil-per-day Lucius spar, with the topsides expected to be towed to location in the first quarter of 2014. Lucius is progressing on schedule toward first oil production in the second half of 2014. Construction on the Lucius-look-alike Heidelberg spar is more than 70-percent complete, remaining on schedule for first oil production in 2016. The TEN development, which was sanctioned and received approval from the Government of Ghana in 2013, also is expected to achieve first oil in 2016.  Anadarko and its partners continue to make steady progress marketing LNG sourced from the Anadarko-operated Offshore Area 1 in Mozambique. To date, the partners have reached multiple non-binding Heads of Agreement (HOAs) for long-term LNG sales to buyers in premium Asian markets covering approximately two-thirds of the first 5-million-tonne-per-annum train.  Exploration Highlights  In 2013, Anadarko continued an active and successful deepwater exploration and appraisal program with a success rate of 67 percent.   Anadarko's 2013 success in the deepwater Gulf of Mexico was highlighted by the emergence of the Shenandoah Basin, which has the potential to be one of the largest oil accumulations ever discovered in the Gulf. Following the Anadarko-operated Shenandoah-2 appraisal well, which encountered more than 1,000 net feet of oil pay, and oil discoveries at the nearby Coronado and Yucatan prospects, Anadarko enhanced  its ownership position in, and will become the operator of Coronado. Anadarko is the only company with ownership in all three discoveries in the Shenandoah Basin. In addition, Anadarko and its partners are accelerating appraisal activity in the basin with appraisal wells under way at Coronado and Yucatan, and a rig committed to drill a delineation well at Shenandoah beginning in the second quarter of 2014.  Offshore Mozambique, the company continued exploration and appraisal of its Offshore Area 1 block with two discoveries and six successful appraisal wells in 2013. In December, Anadarko's success in Mozambique was recognized by Platts with its 2013 Global Energy Award for Leadership in Exploration and Production.   Operations Report  For details on Anadarko's fourth-quarter 2013 operations and exploration program, please refer to the comprehensive Operations Report available at www.anadarko.com.  Financial Highlights  Anadarko ended 2013 with approximately $3.7 billion of cash on hand,  up $1.2 billion from year-end 2012. During the year, the company generated $240 million of adjusted free cash flow, including $792 million of capital investments incurred by WES.(2) Anadarko also reached agreements to monetize a total of approximately $4.5 billion of assets, highlighted by the $2.64 billion sell-down of a portion of its interest in the Offshore Area 1 of Mozambique expected to close in the first quarter of 2014, the $860 million carried-interest agreement at Heidelberg and the recent $581 million divestiture of its non-operated interest in the Pinedale/Jonah field. At year-end 2013, Anadarko's net debt to adjusted capitalization ratio was approximately 31 percent, compared to 34 percent at year-end 2012.(2)   Tronox-Related Contingent Liability  In the fourth quarter, the company accrued an $850 million loss related to the ongoing Tronox Adversary Proceeding. The company currently believes a significant portion of this amount to be deductible; accordingly, it also has recorded a tax benefit of $274 million associated with the loss accrual. Applicable accounting guidance requires the company to accrue a loss if it is both probable that a liability has been incurred and the amount of that liability can be reasonably estimated. The company recorded its accrual in accordance with these guidelines, based on the company's assessment of the information available to it as of the date of this news release, and its conclusion that a loss related to the proceeding is now probable. The company determined the range of probable loss related to potential damages that ultimately may be awarded, after all appellate processes, to be $850 million to $5.15 billion. Based on information currently available to it, the company is unable to identify an amount within this range that is a better estimate than any other number in the range. When no amount within the range is a better estimate than any other amount, accounting guidance requires an accrual to be at the low end of the range of loss. Neither the range of probable loss nor the accrual includes any amounts for possible interest, attorneys' fees, or other costs, given the uncertainty and lack of information concerning these items available to the company at this time. However, these additional amounts could prove to be material. The company does not believe that the current accrued liability is representative of the amount the company could be required to pay to reach final resolution of the matter through settlement. The company currently expects that a settlement of the proceeding, if any, would require payment of an amount substantially greater than the current accrued liability.  A wide range of possible ultimate outcomes currently exists; accordingly, this accrual could change materially as events unfold and more information becomes available. The Court in its Memorandum of Opinion issued on December 12, 2013 concluded that damages were $14.459 billion prior to the application of any offset claim that Kerr-McGee may have, and the amount of any such offset could vary substantially. As requested by the Court, Kerr-McGee submitted a brief on January 13, 2014, and the plaintiffs' reply brief is due by February 12, 2014. Kerr-McGee will have until 30 days after the filing of the plaintiffs' reply brief to respond to that brief, and the parties can request a hearing on the issues being briefed. Investors are cautioned that the accrual and the range of probable loss identified above could change materially over time, including between the time of this news release and the filing of the company's Form 10-K. A detailed discussion of the potential liability related to this matter, and the related contingent liability recorded, will be included in the company's 2013 Form 10-K that will be filed later this month.   As previously stated, the company strongly disagrees with the Court's Opinion, and continues to reserve all of its objections to the Opinion and its rights to appeal.   Conference Call Tomorrow at 8 a.m. CST, 9 a.m. EST  Anadarko will host a conference call on Tuesday, Feb. 4, 2014, at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) to discuss fourth-quarter and full-year 2013 results. The dial-in number is 855.812.0464 in the U.S., or 970.300.2271 internationally. The confirmation number is 28584560. 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  Seven pages of summary financial data follow, including costs incurred, proved reserves and current hedge positions.   (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 2013, the company had approximately 2.79 billion barrels-equiva lent 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 the nature and timing of a final judgment or other decisions rendered relating to the Tronox Adversary Proceeding, the amount of damages, interest, attorneys' fees and other costs for which the defendants may be found liable, and the effect of such amounts on our business, prospects, results of operations, financial condition and liquidity, Anadarko's ability to finalize year-end reserves, consummate the transactions described in this news release, timely complete and commercially operate the projects and drilling prospects identified in this news release, achieve production and budget expectations on its mega projects, and successfully plan, secure necessary government approvals, finance, build and operate an LNG project. See "Risk Factors" in the company's 2012 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.                                                                                                          Anadarko Petroleum Corporation                                           Certain Items Affecting Comparability                                                                                                                                              Quarter Ended December 31, 2013                                              -------------------------------                                                Before     After    Per Share  millions except per-share amounts              Tax        Tax     (diluted)  ------------------------------------------- ---------  ---------  ---------  Total gains (losses) on derivatives, net,                                     less net cash received from settlements*   $     (52) $     (34) $   (0.07) Gains (losses) on divestitures, net              (635)      (402)     (0.80) Impairments                                      (162)      (103)     (0.21) Third-party property restoration                  (35)       (22)     (0.04) Tronox-related contingent loss                   (850)      (576)     (1.14) Change in uncertain tax positions (FIN 48)          -         (6)     (0.01) Deepwater Horizon settlement and related                                      costs                                              (3)        (2)         -  ------------------------------------------- ---------  ---------  ---------                                              $  (1,737) $  (1,145) $   (2.27) ------------------------------------------- ---------  ---------  ---------     * For the quarter ended December 31, 2013, this includes $(155) million related to commodity derivatives, $111 million related to other derivatives, and $(8) million related to gathering, processing, and marketing sales.                                                                                                                                Quarter Ended December 31, 2012                                              -------------------------------                                                Before     After    Per Share  millions except per-share amounts              Tax        Tax     (diluted)  ------------------------------------------- ---------  ---------  ---------  Total gains (losses) on derivatives, net,                                     less net cash received from settlements*   $     162  $     102  $    0.20  Cash payments in settlement of interest-                                      rate swaps                                       (64)       (41)     (0.09) Gains (losses) on divestitures, net               (48)       (52)     (0.10) Impairments                                      (223)      (143)     (0.28) Change in uncertain tax positions (FIN 48)          -        (38)     (0.08) Deepwater Horizon settlement and related                                      costs                                             (3)        (2)         -  WES general partner Unit Appreciation                                         Rights                                          (126)       (80)     (0.16) ------------------------------------------- ---------  ---------  ---------                                              $    (302) $    (254) $   (0.51) ------------------------------------------- ---------  ---------  ---------     * For the quarter ended December 31, 2012, this includes $3 million related to commodity derivatives, $157 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 (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      Year Ended                                                December 31,      December 31,                                             ----------------  ----------------  millions                                   2013     2012     2013     2012   ---------------------------------------- -------  -------  -------  -------  Net cash provided by operating                                                activities                              $ 2,104  $ 2,220  $ 8,888  $ 8,339  Add back                                                                       Deepwater Horizon settlement and                                              related costs                               8        4       17       (6)   Algeria exceptional profits tax                                               settlement                                  -     (392)    (730)  (1,006)   Change in accounts receivable                5     (111)    (241)    (520)   Change in accounts payable and accrued                                        expenses                                   51      (10)     167      476    Change in other items - net               (119)     (99)     (68)    (126) ---------------------------------------- -------  -------  -------  -------  Discretionary cash flow from operations  $ 2,049  $ 1,612  $ 8,033  $ 7,157  ---------------------------------------- -------  -------  -------  -------                                                                                                                                                                                    Anadarko Petroleum Corporation                                        Reconciliation of GAAP to Non-GAAP Measures                                                                                                                                          Quarter Ended      Year Ended                                                December 31,      December 31,    millions                                   2013     2012     2013     2012   ---------------------------------------- -------  -------  -------  -------  Discretionary cash flow from operations  $ 2,049  $ 1,612  $ 8,033  $ 7,157  Less capital expenditures*                 2,612    1,933    8,523    7,311  ---------------------------------------- -------  -------  -------  -------  Free cash flow                           $  (563) $  (321) $  (490) $  (154) ---------------------------------------- -------  -------  -------  -------  Collection of Algeria exceptional                                             profits tax receivable                        -      392      730    1,006  ---------------------------------------- -------  -------  -------  -------  Adjusted free cash flow                  $  (563) $    71  $   240  $   852  ---------------------------------------- -------  -------  -------  -------     * Includes Western Gas Partners, LP (WES) capital expenditures of $170 million for the quarter ended December 31, 2013, $169 million for the quarter ended December 31, 2012, $792 million for the year ended December 31, 2013, and $529 million for the year ended December 31, 2012.                                                                                                                         Quarter Ended         Quarter Ended                                        December 31, 2013     December 31, 2012                                    --------------------  --------------------                                     After    Per Share    After    Per Share  millions except per-share                                                     amounts                            Tax     (diluted)     Tax     (diluted)  -------------------------------- ---------  ---------  ---------  ---------  Net income (loss) attributable                                                to common stockholders          $    (770) $   (1.53) $     203  $    0.40  Certain items affecting                                                       comparability                      (1,145)     (2.27)      (254)     (0.51) -------------------------------- ---------  ---------  ---------  ---------  Adjusted net income (loss)       $     375  $    0.74  $     457  $    0.91  -------------------------------- ---------  ---------  ---------  ---------     Presented below are reconciliations of costs incurred (GAAP) to oil and natural gas exploration and development costs (non-GAAP) and total debt (GAAP) to net debt (non-GAAP). Management believes oil and natural gas exploration and development costs is a more accurate reflection of the expenditures incurred during the current year, excluding certain obligations to be paid in future periods. 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.                                                                                                                                                   Year Ended                                                                  December 31,  millions                                                           2013      -------------------------------------------------------------- ------------  Costs incurred                                                 $      7,486  Asset retirement obligation liability incurred                         (180) Cash expen ditures for asset retirement obligations                      162  -------------------------------------------------------------- ------------  Oil and natural gas exploration and development costs          $      7,468  -------------------------------------------------------------- ------------                                                                                                                                              December 31,  millions                                                           2013      -------------------------------------------------------------- ------------  Total debt                                                     $     13,565  Less cash and cash equivalents                                        3,698  -------------------------------------------------------------- ------------  Net debt                                                       $      9,867  -------------------------------------------------------------- ------------                                                                               Net debt                                                       $      9,867  Stockholders' equity                                                 21,857  -------------------------------------------------------------- ------------  Adjusted capitalization                                        $     31,724  -------------------------------------------------------------- ------------  Net debt to adjusted capitalization ratio                                31% -------------------------------------------------------------- ------------                                                                                                                                                                                   Anadarko Petroleum Corporation                                                        (Unaudited)                                                                                                                                                          Quarter Ended      Year Ended     Summary Financial Information              December 31,      December 31,                                             ----------------  ----------------  millions except per-share amounts          2013     2012     2013     2012   ---------------------------------------- -------  -------  -------  -------  Consolidated Statements of Income                                            ---------------------------------------- -------  -------  -------  -------  Revenues and Other                                                           ---------------------------------------- -------  -------  -------  -------  Natural-gas sales                        $   841  $   762  $ 3,388  $ 2,444  Oil and condensate sales                   2,417    2,099    9,178    8,728  Natural-gas liquids sales                    373      311    1,262    1,224  Gathering, processing, and marketing                                          sales                                       289      240    1,039      911  Gains (losses) on divestitures and                                            other, net                                 (582)      (2)    (286)     104  ---------------------------------------- -------  -------  -------  -------  Total                                      3,338    3,410   14,581   13,411  ---------------------------------------- -------  -------  -------  -------  Costs and Expenses                                                           ---------------------------------------- -------  -------  -------  -------  Oil and gas operating                        323      244    1,092      976  Oil and gas transportation and other         259      245    1,022      955  Exploration                                  615      284    1,329    1,946  Gathering, processing, and marketing         231      211      869      763  General and administrative                   303      430    1,090    1,246  Depreciation, depletion, and                                                  amortization                                969    1,028    3,927    3,964  Other taxes                                  258      254    1,077    1,224  Impairments                                  162      223      794      389  Algeria exceptional profits tax                                               settlement                                    -        -       33   (1,797) Deepwater Horizon settlement and related                                      costs                                         3        3       15       18  ---------------------------------------- -------  -------  -------  -------  Total                                      3,123    2,922   11,248    9,684  ---------------------------------------- -------  -------  -------  -------  Operating Income (Loss)                      215      488    3,333    3,727  ---------------------------------------- -------  -------  -------  -------  Other (Income) Expense                                                       ---------------------------------------- -------  -------  -------  -------  Interest expense                             173      181      686      742  (Gains) losses on derivatives, net            (5)    (249)    (398)    (326) Other (income) expense, net                   20       10       89       (4) Tronox-related contingent loss               850        -      850     (250) ---------------------------------------- -------  -------  -------  -------  Total                                      1,038      (58)   1,227      162  ---------------------------------------- -------  -------  -------  -------  Income (Loss) Before Income Taxes           (823)     546    2,106    3,565  ---------------------------------------- -------  -------  -------  -------  Income Tax Expense (Benefit)                 (98)     356    1,165    1,120  ---------------------------------------- -------  -------  -------  -------  Net Income (Loss)                           (725)     190      941    2,445  ---------------------------------------- -------  -------  -------  -------  Net Income (Loss) Attributable to                                             Noncontrolling Interests                     45      (13)     140       54  ---------------------------------------- -------  -------  -------  -------  Net Income (Loss) Attributable to Common                                      Stockholders                            $  (770) $   203  $   801  $ 2,391  ---------------------------------------- -------  -------  -------  -------  Per Common Share                                                             ---------------------------------------- -------  -------  -------  -------  Net income (loss) attributable to common                                      stockholders-basic                      $ (1.53) $  0.40  $  1.58  $  4.76  Net income (loss) attributable to common                                      stockholders-diluted                    $ (1.53) $  0.40  $  1.58  $  4.74  ---------------------------------------- -------  -------  -------  -------  Average Number of Common Shares                                               Outstanding-Basic                           504      500      502      500  ---------------------------------------- -------  -------  -------  -------  Average Number of Common Shares                                               Outstanding-Diluted                         504      502      505      502  ---------------------------------------- -------  -------  -------  -------                                                                               ---------------------------------------- -------  -------  -------  -------  Exploration Expense                                                          ---------------------------------------- -------  -------  -------  -------  Dry hole expense                         $   255  $    94  $   556  $   440  Impairments of unproved properties           186       61      308    1,104  Geological a nd geophysical expense            97       62      208      151  Exploration overhead and other                77       67      257      251  ---------------------------------------- -------  -------  -------  -------  Total                                    $   615  $   284  $ 1,329  $ 1,946  ---------------------------------------- -------  -------  -------  -------                                                                                                                                                                                   Anadarko Petroleum Corporation                                                        (Unaudited)                                                                                                                                                          Quarter Ended      Year Ended     Summary Financial Information              December 31,      December 31,                                             ----------------  ----------------  millions                                   2013     2012     2013     2012   ---------------------------------------- -------  -------  -------  -------  Cash Flows from Operating Activities                                         ---------------------------------------- -------  -------  -------  -------  Net income (loss)                        $  (725) $   190  $   941  $ 2,445  Depreciation, depletion, and                                                  amortization                                969    1,028    3,927    3,964  Deferred income taxes                       (445)      69       90      164  Dry hole expense and impairments of                                           unproved properties                         441      155      864    1,544  Impairments                                  162      223      794      389  (Gains) losses on divestitures, net          635       48      470       71  Total (gains) losses on derivatives, net       4     (249)    (392)    (308) Net cash received in settlement of                                            derivative instruments                       48       87       85      685  Deepwater Horizon settlement and related                                      costs                                         3        3       15       18  Algeria exceptional profits tax                                               settlement                                    -        -       33   (1,797) Tronox-related contingent loss               850        -      850     (250) Certain other nonoperating items              35        -      110        -  Other                                         72       58      246      232  ---------------------------------------- -------  -------  -------  -------  Discretionary Cash Flow from Operations    2,049    1,612    8,033    7,157  Deepwater Horizon settlement and related                                      costs                                        (8)      (4)     (17)       6  Algeria exceptional profits tax                                               settlement                                    -      392      730    1,006  (Increase) decrease in accounts                                               receivable                                   (5)     111      241      520  Increase (decrease) in accounts payable                                       and accrued expenses                        (51)      10     (167)    (476) Other items-net                              119       99       68      126  ---------------------------------------- -------  -------  -------  -------  Net Cash Provided by Operating                                                Activities                              $ 2,104  $ 2,220  $ 8,888  $ 8,339  ---------------------------------------- -------  -------  -------  -------                                                                               ---------------------------------------- -------  -------  -------  -------  Capital Expenditures                     $ 2,612  $ 1,933  $ 8,523  $ 7,311  ---------------------------------------- -------  -------  -------  -------                                                                                                                                                                                                             December 31,  December 31,  millions                                             2013          2012      ------------------------------------------------ ------------  ------------  Condensed Balance Sheets                                                     ------------------------------------------------ ------------  ------------  Cash and cash equivalents                        $      3,698  $      2,471  Accounts receivable, net of allowance                   2,470         2,747  Algeria exceptional profits tax settlement                  -           730  Other current assets                                      674           847  Net properties and equipment                           40,929         38,398  Other assets                                            2,096         1,716  Goodwill and other intangible assets                    5,662         5,680  ------------------------------------------------ ------------  ------------  Total Assets                                     $     55,529  $     52,589  ------------------------------------------------ ------------  ------------  Current asset retirement obligations             $        409  $        298  Current portion of long-term debt                         500             -  Other current liabilities                               4,542         3,696  Long-term debt                                         13,065        13,269  Deferred income taxes                                   9,245         8,759  Other long-term liabilities                             4,118         4,685  Stockholders' equity                                   21,857        20,629  Noncontrolling interests                                1,793         1,253  ------------------------------------------------ ------------  ------------  Total Liabilities and Equity                     $     55,529  $     52,589  ------------------------------------------------ ------------  ------------  Capitalization                                                               ------------------------------------------------ ------------  ------------  Total debt                                       $     13,565  $     13,269  Stockholders' equity                                   21,857        20,629  ------------------------------------------------ ------------  ------------  Total                                            $     35,422  $     33,898  ------------------------------------------------ ------------  ------------                                                                               ------------------------------------------------ ------------  ------------  Capitalization Ratios                                                        ------------------------------------------------ ------------  ------------  Total debt                                                 38%           39% Stockholders' equity                                       62%           61% ------------------------------------------------ ------------  ------------                                                                                                                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                                                                 December 31, 2013                                                           United States           2,643        167     100     243         16       9  Algeria                     -         62       -       -          6       -  Other International         -         36       -       -          3       -                        ------- ---------- ------- ------- ---------- -------  Total                   2,643        265     100     243         25       9                        ------- ---------- ------- ------- ---------- -------                                                                               Quarter Ended                                                                 De cember 31, 2012                                                           United States           2,521        159      87     232         15       8  Algeria                     -         47       -       -          4       -  Other International         -         28       -       -          3       -                        ------- ---------- ------- ------- ---------- -------  Total                   2,521        234      87     232         22       8                        ------- ---------- ------- ------- ---------- -------                                                                               Year Ended December                                                           31, 2013                                                                    United States           2,652        158      91     968         58      33  Algeria                     -         55       -       -         20       -  Other International         -         35       -       -         13       -                        ------- ---------- ------- ------- ---------- -------  Total                   2,652        248      91     968         91      33                        ------- ---------- ------- ------- ---------- -------                                                                               Year Ended December                                                           31, 2012                                                                    United States           2,495        149      83     913         55      30  Algeria                     -         54       -       -         20       -  Other International         -         30       -       -         11       -                        ------- ---------- ------- ------- ---------- -------  Total                   2,495        233      83     913         86      30                        ------- ---------- ------- ------- ---------- -------                                                                                                                                    Sales Volumes and Prices                                                     Average Sales Price                           -----------------------------                               Crude Oil &                                Natural                                              Gas    Condensate   NGLs                         Per Mcf   Per Bbl    Per Bbl                      -------- ----------- -------- Quarter Ended                                       December 31, 2013                                 United States        $   3.46 $     93.01 $  40.30 Algeria                     -      109.18        - Other International         -      110.56        -                      -------- ----------- -------- Total                $   3.46 $     99.20 $  40.30                      -------- ----------- --------                                                    Quarter Ended                                       December 31, 2012                                 United States        $   3.28 $     92.50 $  38.97 Algeria                     -      109.68        - Other International         -      107.56        -                      -------- ----------- -------- Total                $   3.28 $     97.74 $  38.97                      -------- ----------- --------                                                    Year Ended December                                 31, 2013                                          United States        $   3.50 $     97.02 $  37.97 Algeria                     -      109.20        - Other International         -      109.07        -                      -------- ----------- -------- Total                $   3.50 $    101.41 $  37.97                      -------- ----------- --------                                                    Year Ended December                                 31, 2012                                          United States        $   2.68 $     97.46 $  40.44 Algeria                     -      110.29        - Other International         -      112.61        -                      -------- ----------- -------- Total                $   2.68 $    102.35 $  40.44                      -------- ----------- --------                                                                                                                                 ================================================ ============= =============                                                                                                                               Average Daily                                                                   Volumes    Sales Volumes                                                      MBOE/d        MMBOE                                                      ------------- -------------                                                                              Quarter Ended December 31, 2013                       806            74      Quarter Ended December 31, 2012                       741            68                                                                                   Year Ended December 31, 2013                          781           285      Year Ended December 31, 2012                          732           268                                                                                   ================================================ ============= ============= Sales Revenue and Commodity Derivatives                                                                                         Net Cash Received (Paid)                                                    in Settlement of Commodity                                  Sales                    Derivatives                               -------------------------  --------------------------                                 Crude Oil                  Crude Oil                                Natural      &             Natural      &             millions                 Gas   Condensate  NGLs     Gas   Condensate   NGLs                         ------- ---------- ------  ------- ----------  ------ Quarter Ended December                                                        31, 2013                                                                    United States          $   841 $    1,426 $  373  $    42 $        8  $    2 Algeria                      -        618      -        -         (3)      - Other International          -        373      -        -          -       -                        ------- ---------- ------  ------- ----------  ------ Total                  $   841 $    2,417 $  373  $    42 $        5  $    2                        ------- ---------- ------  ------- ----------  ------                                                                              Quarter Ended December                                                        31, 2012                                                                    United States          $   762 $    1,351 $  311  $   114 $       34  $    4 Algeria                      -        469      -        -          1       - Other International          -        279      -        -          -       -                        ------- ---------- ------  ------- ----------  ------ Total                  $   762 $    2,099 $  311  $   114 $       35  $    4                        ------- ---------- ------  ------- ----------  ------                                                                              Year Ended December                                                           31, 2013                                                                    United States          $ 3,388 $    5,601 $1,262  $   133 $      (53) $    9 Algeria                      -      2,184      -        -          6       - Other International          -      1,393      -        -          -       -                        ------- ---------- ------  ------- ----------  ------ Total                  $ 3,388 $    9,178 $1,262  $   133 $      (47) $    9                        ------- ---------- ------  ------- ----------  ------                                                                              Year Ended December                                                           31, 2012                                                                    United States          $ 2,444 $    5,332 $1,224  $   678 $       70  $   10 Algeria                      -      2,182      -        -         (5)      - Other International          -      1,214      -        -          -       -                        ------- ---------- ------  ------- ----------  ------ Total                  $ 2,444 $    8,728 $1,224  $   678 $       65  $   10                        ------- ---------- ------  ------- ----------  ------                                                                                                                                                                                  Anadarko Petroleum Corporation                                        Estimated Year-End Proved Reserves 2011 - 2013                                                                                                                                                                          MMBOE                                                 2013    2012    2011                                                        ------  ------  ------  Proved Reserves                                                              Beginning of year                                     2,560   2,539   2,422  Reserves additions and revisions                                               Discoveries and extensions                            145      82     174    Infill-drilling additions                             410     383     203                                                       ------  ------  ------      Drilling-related reserves additions and                                       revisions                                          555     465     377    Other non-price-related revisions                     (40)    (31)      7                                                       ------  ------  ------      Net organic reserves additions                      515     434     384    Acquisition of proved reserves in place                36       4       -    Price-related revisions                               (23)    (68)      8                                                       ------  ------  ------  Total reserves additions and revisions                  528     370     392  Sales in place                                          (12)    (81)    (29) Production                                             (284)   (268)   (246)                                                      ------  ------  ------  End of year                                           2,792   2,560   2,539                                                       ------  ------  ------  Proved Developed Reserves                                                    Beginning of year                                     1,883   1,811   1,673                                                       ------  ------  ------  End of year                                           2,003   1,883   1,811                                                       ------  ------  ------                                                                                                                                                                                   Anadarko Petroleum Corporation                                                  Commodity Hedge Positions                                                     As of February 3, 2014                                                                                                                                                           Weighted Average Price per                                                             barrel                                                             --------------------------                                          Volume     Floor    Floor   Ceiling                                         (MBbls/d)   Sold   Purchased   Sold                                          --------- -------- --------- ------- Crude Oil                                                                      Fixed Price - Financial                                                      2014                                                                           WTI                                        70 $  96.03                       Brent                                      37 $ 109.19                                                           --------- --------                                                                 107 $ 100.58                                                                                                                                                 Weighted Average Price per                                                              MMBtu                                                            ----------------------------                                         Volume                                                                     (thousand   Floor     Floor    Ceiling                                        MMBtu/d)   Sold    Purchased   Sold                                         --------- -------- ---------- -------- Natural Gas                                                                    Three-Way Collars                                                            2014                                      600 $   2.75 $     3.75 $   5.01                                                                                2015                                      635 $   2.75 $     3.75 $   4.76                                                                                Fixed Price - Financial                                                      2014                                      600 $   4.26                                                                                                    Extendable Fixed Price - Financial                                           2014 (January - June)*                    400 $   4.19                                                                                                  -------------------------------------                                        *Includes an option to extend the contract term to December 2014 at the same  price.                                                                                                                                                                                                                                ----------------------------------------------------------------------------                                                                                                        Interest Rate Derivatives                                                     As of February 3, 2014                                                                                                         ----------------------------------------------------------------------------  Instrument Notional Amt.  Start Date  Maturity  Rate Paid   Rate Received   ----------------------------------------------------------------------------     Swap     $750 Million  June 2014  June 2024    6.00%       3M LIBOR          Swap    $1,100 Million June 2014  June 2044    5.57%       3M LIBOR          Swap     $50 Million   Sept. 2016 Sept. 2026   5.91%       3M LIBOR          Swap     $750 Million  Sept. 2016 Sept. 2046   5.86%       3M LIBOR                                                                                   ----------------------------------------------------------------------------     Anadarko Contacts   Media: John Christiansen john.christiansen@anadarko.com 832.636.8736  Christina Ramirez christina.ramirez@anadarko.com 832.636.8687  Investors: John Colglazier john.colglazier@anadarko.com 832.636.2306  Jeremy Smith jeremy.smith@anadarko.com 832.636.1544  Bill Tedesco william.tedesco@anadarko.com 832.636.3375