UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 1998March 31, 1999
Commission File No. 1-8968

ANADARKO PETROLEUM CORPORATION
17001 Northchase Drive, Houston, Texas 77060-2141
(281) 875-1101

Incorporated in the Employer Identification
State of Delaware No. 76-0146568

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days. Yes X No _____

The number of shares outstanding and entitled to vote of the
Company's common stock as of OctoberApril 30, 19981999 is shown below:

Number of Shares
Title of Class Outstanding

Common Stock, $0.10 par value $0.10 per share 120,325,896

120,974,332

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

Three Months Ended
Nine Months EndedMarch 31
thousands except September 30 September 30 per share amounts 1999 1998
1997 1998 1997

Revenues
Gas sales $ 86,25377,840 $ 94,773 $267,443 $284,97193,520
Oil and condensate sales 35,010 42,036 97,989 124,55643,580 31,398
Natural gas liquids and other 18,928 21,908 59,286 59,53714,944 22,083
Total 140,191 158,717 424,718 469,064136,364 147,001

Cost and Expenses
Operating expenses 41,848 39,319 120,754 105,63034,056 40,257
Administrative and general 21,950 19,486 64,914 53,67324,409 21,243
Depreciation, depletion and amortization 51,562 51,062 151,286 144,32356,524 51,337
Other taxes 9,116 10,720 28,432 34,3339,233 10,829
Impairments related to international properties 20,000 ---
Total 124,476 120,587 365,386 337,959144,222 123,666

Operating Income 15,715 38,130 59,332 131,105(Loss) (7,858) 23,335

Interest Expense 14,991 11,452 41,127 28,65718,638 12,358

Income before(Loss) Before Income Taxes 724 26,678 18,205 102,448(26,496) 10,977

Income Taxes 260 9,586 6,385 37,148(6,141) 3,962

Net Income (Loss) $(20,355) $ 464 $ 17,092 $ 11,820 $ 65,3007,015

Preferred Stock Dividends 2,730 --- 4,368 ---

Net Income (Loss) Available to
Common Stockholders $(23,085) $ (2,266) $ 17,092 $ 7,452 $ 65,3007,015

Per Common Share
Net income (loss)- basic $ (0.02) $ 0.14(0.19) $ 0.06
$ 0.55
Net income (loss)- diluted $ (0.02) $ 0.14(0.19) $ 0.06
$ 0.54
Dividends - common $ 0.05 $ 0.0375 $ 0.1375 $ 0.1125

Average Number of Common Shares Outstanding 120,140 119,484 120,008 119,329120,492 119,834

See accompanying notes to consolidated financial statements.
-2-
2

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)

September 30,March 31, December 31,
thousands 1999 1998
1997

ASSETS
ASSETS
Current Assets
Cash and cash equivalents $ 19,88115,530 $ 8,90717,008
Accounts receivable 157,750 177,157151,410 181,491
Inventories at average cost 20,961 28,56433,586 25,860
Prepaid expenses 6,576 4,3663,595 5,569
Total 205,168 218,994204,121 229,928

Properties and Equipment
Original cost 5,314,372 4,669,2515,558,783 5,488,721
Less accumulated depreciation, depletion
and amortization 2,054,097 1,914,4722,144,745 2,107,183
Net properties and equipment - based on
the full cost method of accounting
for oil and gas properties 3,260,275 2,754,7793,414,038 3,381,538

Deferred Charges 31,570 18,692

$3,497,013 $2,992,46539,672 21,524

$3,657,831 $3,632,990

See accompanying notes to consolidated financial statements.

-3-
3

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET (continued)
(Unaudited)

September 30,March 31, December 31,
thousands 1999 1998
1997

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
Trade and other $ 157,870166,285 $ 202,822227,988
Banks 26,797 22,1028,413 26,723
Accrued expenses
Interest 13,968 13,60714,386 15,210
Taxes and other 15,653 13,799
Notes payable, banks 49,631 ---13,690 18,805
Total 263,919 252,330202,774 288,726

Long-term Debt 1,225,000 955,7331,560,762 1,425,392

Deferred Credits
Deferred income taxes 550,046 546,792516,061 522,953
Other 140,242 120,830143,701 136,463
Total 690,288 667,622659,762 659,416

Stockholders' Equity
Preferred stock, par value $1.00
(2,000,000 shares authorized, 200,000
and
no shares issued as of September 30, 1998March 31, 1999
and December 31, 1997, respectively)1998) 200,000 ---200,000
Common stock, par value $0.10
(200,000,000 shares authorized,
122,247,367122,551,004 and 121,771,988122,436,712 shares issued
as of September 30, 1998March 31, 1999 and December 31,
1997,1998, respectively) 12,224 6,13412,255 12,244
Paid-in capital 375,086 353,125378,544 361,390
Retained earnings (as of September 30, 1998,
$667,806,000March 31, 1999,
$584,533,000 was not restricted as to
the payment of dividends) 819,631 828,787727,859 756,971
Deferred compensation (8,510) (11,203)(8,437) (9,461)
Executives and Directors Benefits Trust,
at market value (2,000,000 shares as of
September 30, 1998March 31, 1999 and December 31, 1997) (80,625) (60,063)
_________ _________1998) (75,688) (61,688)
Treasury stock (12 and 20 shares as of
March 31, 1999 and December 31, 1998,
respectively) --- ---
Total 1,317,806 1,116,780

$3,497,013 $2,992,4651,234,533 1,259,456

$3,657,831 $3,632,990

See accompanying notes to consolidated financial statements.
-4-
4

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

NineThree Months Ended
September 30March 31
thousands 1999 1998 1997

Cash Flow from Operating Activities
Net income (loss) $(20,355) $ 11,820 $ 65,3007,015
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, depletion and amortization 151,286 144,31956,524 51,337
Amortization of restricted stock 829 1,424315 294
Deferred U.S. income taxes 4,818 29,014
168,753 240,057(10,765) 3,935
Impairments of international properties 20,000 ---
45,719 62,581
Decrease in accounts receivable 19,407 52,997
(Increase) decrease30,081 20,760
Increase in inventories 7,603 (9,033)
Decrease(7,726) (2,167)
Increase (decrease) in accounts payable -
trade and other and accrued expenses (42,737) (35,628)(67,642) 53,950
Other items - net (5,600) (342)(5,637) (2,800)
Net cash provided by (used in) operating
activities 147,426 248,051(5,205) 132,324

Cash Flow from Investing Activities
Additions to properties and equipment (672,368) (496,402)(111,758) (268,131)
Proceeds from the sale of assets to be
leased, net 20,170 87,9003,777 ---
Sales and retirements of properties
and equipment 5,454 3,141105 4,860
Net cash used in investing activities (646,744) (405,361)(107,876) (263,271)

Cash Flow from Financing Activities
Additions to debt 418,898 159,522300,000 239,409
Retirements of debt (164,630) (100,000)
---
Issuance of preferred stock 195,675 ---
IncreaseDecrease in accounts payable, banks 4,695 1,360(18,310) (7,535)
Dividends paid (20,976) (13,433)(8,757) (4,495)
Issuance of common stock 12,000 9,0943,300 2,565
Issuance of treasury stock, net --- 4(2)
Net cash provided by financing activities 510,292 156,547111,603 129,942

Net Increase (Decrease)Decrease in Cash and Cash Equivalents 10,974 (763)(1,478) (1,005)

Cash and Cash Equivalents at Beginning
of Period 17,008 8,907 14,601

Cash and Cash Equivalents at End of Period $ 19,88115,530 $ 13,8387,902

See accompanying notes to consolidated financial statements.
-5-
5

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Summary of Accounting Policies

General Anadarko Petroleum Corporation is engaged in the exploration,explora-
tion, development, production and marketing of natural gas, crude oil,
condensate and natural gas liquids (NGLs). The terms "Anadarko" and
"Company" refer to Anadarko Petroleum Corporation and its subsidiaries.
The principal subsidiaries of Anadarko are: Anadarko Algeria CorporationCorpora-
tion (Anadarko Algeria), Anadarko Energy Services Company and Anadarko
Gathering Company. Certain amounts have been restated to conform to the
current presentation.

2. Inventories Materials and supplies and natural gas inventoryinventories are
stated at the lower of average cost or market. Natural gas, when sold
from inventory, is charged to expense using the average-cost method. Oil
inventory is stated at market value. The major classes of inventories
are as follows:

September 30,March 31, December 31,
thousands 1999 1998 1997

Materials and supplies $19,925 $27,332$17,579 $20,231
Oil, stored in inventory 12,087 3,816
Natural gas, 1,036 1,232
$20,961 $28,564stored in inventory 3,920 1,813
$33,586 $25,860

3. Properties and Equipment Oil and gas properties include costs of
$379,329,000$353,511,000 and $343,789,000$353,647,000 at September 30, 1998March 31, 1999 and December 31, 1997,1998,
respectively, which were excluded from capitalized costs being
amortized. These amounts represent costs associated with unevaluated
properties and major development projects.

4. Long-term Debt A summary of long-term debt follows:

September 30,March 31, December 31,
thousands 1999 1998 1997

Commercial Paper $ 284,631 $125,733229,262 $ 367,892
Notes Payable, Banks 140,369 30,000
8 3/4% Notes due 1998 --- 100,000231,500 257,500
8 1/4% Notes due 2001 100,000 100,000
6 3/4% Notes due 2003 100,000 100,000
5 7/8% Notes due 2003 100,000 100,000
7 1/4% Debentures due 2025 100,000 100,000
7% Debentures due 2027 100,000 100,000
6.625% Debentures due 2028 100,000 100,000
7.20% Debentures due 2029 300,000 ---
7.73% Debentures due 2096 100,000 100,000
7 1/4% Debentures due 2096 100,000 100,000
$1,225,000 $955,733$1,560,762 $1,425,392

-6-

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

4. Long-term Debt (continued)
The commercial paper and a portion of the notes payable to banks have been classified as
long-term debt in accordance with Statement of Financial Accounting
Standards No. 6, "Classification of Short-term Obligations Expected to
be Refinanced",Refinanced," under the terms of Anadarko's Bank Credit Agreements.
6

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Long-term Debt (continued)

In January 1998,March 1999, Anadarko issued $100,000,000$300,000,000 principal amount of 6.625%7.20%
Debentures due 2028.2029. The proceeds were used to fund capital
spending projectsrepay floating interest
rate debt.

In April 1999, the Company amended the Revolving Credit Agreement and
entered into a new 364-Day Credit Agreement. The Revolving Credit
Agreement provides for $225,000,000 principal amount and the 364-Day
Credit Agreement provides for $285,000,000 principal amount. The
Revolving Credit Agreement expires in core operating areas.2002.

In March 1998,April 1999, Anadarko filed a shelf registration statement with the
Securities and Exchange Commission that permits the issuance of up to
$500,000,000$1,000,000,000 in debt and equity securities. Net proceeds, terms and
pricing of offerings of securities issued under the shelf registration
statement will be determined at the time of the offerings.

In May
1998, $200,000,000 in preferred stock was issued under the shelf
registration statement. (See Note 5).

In April 1998, the Company's Revolving Credit and 364-Day Credit
Agreements were amended. The Revolving Credit Agreement was amended
to increase the number of commercial banks in the group from eight to
nine. The 364-Day Credit Agreement was amended as follows: the
principal amount of the Agreement was increased from $125,000,000 to
$175,000,000; the number of commercial banks in the group was changed
from eight to nine; and the expiration date of the Agreement was
extended for 10 months.

5. Preferred Stock On May 7, 1998, Anadarko issued $200,000,000
of 5.46% Series B Cumulative Preferred Stock in the form of two
million depositary shares, each depositary share representing 1/10th
of a share of the 5.46% Series B Cumulative Preferred Stock. The
preferred stock has no stated maturity and is not subject to a sinking
fund or mandatory redemption. The shares are not convertible into
other securities of the Company.

Anadarko has the option to redeem the shares at $100 per depositary
share on or after May 15, 2008. Holders of the shares are entitled to
receive, when, and as declared by the Board of Directors, cumulative
cash dividends at an annual dividend rate of $5.46 per depositary
share. The proceeds from the offering were used to reduce commercial
paper and bank borrowings and provide capital for Anadarko's 1998
capital expenditures. The preferred stock was issued under the
Company's shelf registration statement.
-7-

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

5. Preferred Stock (continued)

For the thirdfirst quarter of 1998,1999, dividends of $13.65
per share (equivalent to $1.365 per depositary share)Depositary Share) were paid to
holders of preferred stock. The Company's preferred stock was issued in
May 1998.

6. Common Stock In April 1998, the Board of Directors approved a
two-for-one stock split, to be effected in the form of a stock
dividend. The distribution date was July 1, 1998 to stockholders of
record on June 15, 1998. All share and per share information has been
restated to reflect the stock split.

For the third quarter of 1998, dividends of $0.05 per share were paid
to holders of common stock. Under the most restrictive provisions of the
Company's credit agreements, which limit the payment of dividends,
retained earnings of $667,806,000$584,533,000 and $466,780,000$609,456,000 were not restricted
as to the payment of dividends at September 30, 1998March 31, 1999 and December 31, 1997,1998,
respectively.

The Company's basic earnings per share (EPS) amounts have been computed
based on the average number of common shares outstanding. Diluted EPS
amounts include the effect of the Company's outstanding stock options
under the treasury stock method.

The reconciliation between basic and diluted EPS is as follows:

Three Months Ended Three Months Ended
September 30,March 31, 1999 March 31, 1998 September 30, 1997
thousands except Per Share Per Share
per share amounts Loss Shares Amount Income Shares Amount

Basic EPS
Income (loss) available
to common stockholders $(2,266) 120,140 $(0.02) $17,092 119,484 $0.14$(23,085) 120,492 $(0.19) $7,015 119,834 $0.06
Effect of dilutive
stock options --- --- --- 974-- -- -- 651
Diluted EPS
Income (loss) available
to common stockholders
plus assumed conversion $(2,266) 120,140 $(0.02) $17,092 120,458 $0.14$(23,085) 120,492 $(0.19) $7,015 120,485 $0.06
-8-
7

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

6. Common Stock (continued)

Nine Months Ended Nine Months Ended
September 30, 1998 September 30, 1997
thousands except Per Share Per Share
per share amounts Income Shares Amount Income Shares Amount

Basic EPS
Income available to
common stockholders $7,452 120,008 $0.06 $65,300 119,329 $0.55
Effect of dilutive
stock options --- 923 --- 751

Diluted EPS
Income available to
common stockholders
plus assumed
conversion $7,452 120,931 $0.06 $65,300 120,080 $0.54
For the third quarter of 1998,three months ended March 31, 1999, there were 979,000735,000 common
stock equivalents related to outstanding stock options that were
not
included inexcluded from the computation of diluted EPS, since they had an anti-
dilutive effect. In addition, options for 4,463,000 shares of common
stock were excluded from the diluted EPS calculation because the
options' exercise price was greater than the average market price of
common stock for the three months ended March 31, 1999.

In May 1999, Anadarko issued 6,250,000 shares of common stock. Aggregate
proceeds from the offering were approximately $240,500,000 after all
expenses. Proceeds from the offering were used initially to repay
floating interest rate debt. The common stock was issued under the
Company's shelf registration statement.

7. Statement of Cash Flows Supplemental Information The amounts
of cash paid (received) for interest (net of amounts capitalized) and
income taxes are as follows:

NineThree Months Ended
September 30March 31
thousands 1999 1998 1997

Interest $41,078 $28,903$19,361 $13,798
Income taxes $(6,516) $10,930$ (198) $(6,660)

8. Operating Expenses Operating expenses by category are as
follows:

Three Months Ended Nine Months Ended
September 30 September 30
Thousands 1998 1997 1998 1997

Oil and gas $25,031 $21,011 $ 67,751 $ 59,427
Plant, gathering and
marketing 16,817 18,308 53,003 46,203
$41,848 $39,319 $120,754 $105,630

-9-

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

9. Kansas Ad Valorem Tax The Natural Gas Policy Act of 1978
(NGPA) allowed
a "severance, production or similar" tax to be included as an add-on,
over and above the maximum lawful price for natural gas. Based on the
Federal Energy Regulatory Commission (FERC) ruling that the Kansas ad
valorem tax was such a tax, the Company collected the Kansas ad valorem
tax.

Background of Present Litigation FERC's ruling regarding the ability
of producers to collect the Kansas ad valorem tax was appealed to the
United States Court of Appeals for the District of Columbia Circuit
(D.C. Circuit). The Court held in June 1988 that FERC failed to provide
a reasoned basis for its findings and remanded the case to FERC.

On December 1, 1993, FERC issued an order reversing its prior ruling,
but limitingUltimately, the effect of its decision to Kansas ad valorem taxes for
sales made on or after June 28, 1988. Based on Anadarko's
interpretation of FERC's orders, $700,000 (pre-tax) was charged against
income in 1994, in addition to $130,000 (pre-tax) charged against
income in 1993. Anadarko, together with other natural gas producers,
challenged FERC's orders.

The D.C. Circuit issued itsa decision on August 2, 1996 ruling
that producers must refund all Kansas ad valorem taxes collected
relating to production since October 1983. The Company along with other producing
companies, filed a petition
for writ of certiorari with the Supreme Court. That petition was denied
on May 12, 1997.

Anadarko estimates that the maximum amount of principal and interest at
issue which has not been paid to date, assuming that the October 1983
effective date remains in effect, is about $41,800,000 (pre-tax)$43,600,000 (pretax) as of
September 30, 1998.

FERC Proceedings The Company, along with other producing companies,
filed a petition for adjustment with FERC on May 12, 1997 seeking a
waiver of all interest which might otherwise be due. The total
interest at issue is about $27,300,000 (pre-tax) as of September 30,
1998. On September 10, 1997, FERC denied the petition for adjustment.
By order dated February 26, 1998, in response to Anadarko's request,
FERC granted first sellers the right to secure a surety bond instead of
placing cash in escrow. The Company and other producers filed petitions
for review of FERC's January 28, 1998 order denying adjustment relief
with the United States Court of Appeals for the Fifth Circuit (Fifth
Circuit).
-10-
March 31, 1999. 8

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

9.8. Kansas Ad Valorem Tax (continued)

The Public Service Company of Colorado and an affiliate filed a motion
in the Fifth Circuit to dismiss the pending appeals or to transfer them
to the D.C. Circuit. On April 27, 1998, the Fifth Circuit denied the
motion to dismiss but granted the motion to transfer the appeals to the
D.C. Circuit. Several parties, including Anadarko, sought rehearing of
the Order Clarifying Procedures issued by FERC on January 28, 1998.

On June 3, 1998, FERC denied the relief sought in the motion for
rehearing. FERC generally held that it was permissible for producers to
adjust pipeline statements of refunds due to reflect refund amounts
attributable to other working interest owners, amounts associated with
uncollectible royalty interest, and amounts associated with sales made
below applicable FERC set maximum lawful prices. In addition, claims
for a generic waiver of interest on refunds due were denied.Proceedings Depending on future FERC orders, the Company could
be required to pay all or part of the amounts claimed by all pipelines
(which might include PanEnergy) pending further potential review by FERC
or courts.
However, a FERC order issued February 26, 1998 involving refunds paid
by another producer to Northern Natural Gas Company indicates that, if
a producer prevails in subsequent legal challenges, the producer may
recoup amounts paid directly from the pipeline itself, even if the
pipeline already distributed refunds to the pipeline's customers.
Requests for rehearing of this order are pending.

The Company intends to comply fully with all lawful orders issued by
FERC, without waiver of any claim of right or any defense or the right
to seek judicial review or intervention.

On March 9, 1998 and March 10, 1998, the Company filed several
compliance filings with FERC paying undisputed amounts billed by
pipelines and bonding amounts in dispute. The entire refund claim by
Panhandle Eastern Pipe Line Company, a PanEnergy affiliate, was
disputed, and the Company posted a surety bond for the amount in
controversy of $25,125,000, covering refund claims made against the
Company and all affiliates.
-11-

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

9. Kansas Ad Valorem Tax (continued)courts.

PanEnergy Litigation On May 13, 1997, the Company filed a lawsuit in
the Federal District Court for the Southern District of Texas against
PanEnergy seeking declaration that pursuant to prior agreements Anadarko
is not required to issue refunds to PanEnergy for the principal amount
of $14,000,000 (pre-tax)(pretax) and, if the petition for adjustment is denied in
its entirety by FERC with respect to PanEnergy refunds, interest in an
amount of $26,200,000 (pre-tax)$27,900,000 (pretax) as of September
30, 1998.March 31, 1999. The Company also
seeks from PanEnergy the return of $816,000 of the $830,000 (pre-tax)(pretax)
charged against income in 1993 and 1994. In response to a motion filed
by PanEnergy, the United States District Court issued an order on
March 19,17, 1998 staying the litigation, pending the exercise by FERC of
its regulatory jurisdiction.

FERC Order of October 13, 1998 On October 13, 1998, FERC issued a
final order on Anadarko's complaint. The order declares that Anadarko
Production Company (now an affiliate of Duke Energy) is responsible as
first seller for making refunds of Kansas ad valorem tax reimbursements
collected from 1983 through August 1, 1985. The Company estimates this
amount to be as much as $26,000,000. The Company is responsible to make
refunds for reimbursements it collected as first seller from August 1,
1985 through 1988. The Company estimates this amount to be as much as
$16,000,000. The FERC order states that whether Anadarko Production
Company or the Company is entitled to reimbursement from another party
for the refunds ordered is a matter to be pursued in an appropriate
judicial forum. RequestsOn January 15, 1999, FERC issued an order denying a
request for rehearing offiled by PanEnergy and reaffirming the October
13,
1998 order may be filed.order. FERC may, in the near future, issue an order based upon the
above allocation regarding when the refunds must be paid.

-12-

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

9. Kansas Ad Valorem Tax (continued)paid and the
specific refund amount. The issue of reimbursement will now be pursued
in U.S. District Court. On April 16, 1999, the U.S. District Court
ordered the parties to mediation, which should be completed on or before
August 2, 1999. The Court has also set the matter for trial on the
May/June 2000 trial term.

Kansas Corporation Commission (KCC) Proceeding On April 30, 1998,
the Company's subsidiary, Anadarko Gathering Company (AGC), filed a
petition with the KCC to clarify AGC's rights and obligations, if any,
related to the payment by first sellers of Kansas ad valorem tax
refunds. The refunds at issue relate to sales made by Anadarko
Production Company, a PanEnergy affiliate, through facilities known as
9

Item 1. Financial Statements (continued)

ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

8. Kansas Ad Valorem Tax (continued)

the Cimmaron River System during the time period from 1983 to 1988. AGC
purchased the Cimmaron River System from Centana, the successor of
Anadarko Production Company, in 1995. The petition, among other things,
asks the KCC to determine whether AGC or Anadarko Production Company is
responsible for the payment or distribution of refunds received from
first sellers to Anadarko Production Company's former customers and
requests guidance concerning the disposition of refunds received that
are attributable to sales made to Anadarko Production Company customers
that did not reimburse Anadarko Production Company for Kansas ad valorem
taxes during the relevant time periods. This matter is presently being
pursued before the KCC. The KCC is expected to issue its order regarding
Anadarko's petition in this matter by May 28, 1999.

Anadarko's net income for 1997 included a $1,800,000 charge (before
income taxes)(pretax)
related to the Kansas ad valorem tax refunds. This charge reflects all
principal and interest which may be due at the conclusion of all
regulatory proceedings and litigation to parties other than PanEnergy.
The Company is unable at this time to predict the final outcome of this
matter and no provision for liability (excluding the
amounts recorded in
1993, 1994 and 1997) has been made in the accompanying financial
statements.

10.9. The information, as furnished, reflects all normal recurring
adjustments that are, in the opinion of management, necessary to a fair
statement of financial position as of September 30, 1998March 31, 1999 and December 31,
1997,1998, the results of operations for the three and
nine months ended September 30,March 31,
1999 and 1998 and 1997, and cash flows for the ninethree months ended September 30, 1998March 31, 1999
and 1997.

-13-
1998.

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations

The Company has made in this report, and may from time to time otherwise
make in other public filings, press releases and discussions with
Company management, 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 concerning the Company's operations,
economic performance and financial condition. These forward looking
statements include information concerning future production and
reserves, schedules, plans, timing of development, contributions from
Algerian properties, and those statements preceded by, followed by or
that otherwise include the words "believes", "expects", "anticipates",
"intends", "estimates", "projects", "target", "goal", "plans",
"objective", "should" or similar expressions or variations on such
expressions. For such statements, the Company claims the protection of
the safe harbor for forward looking statements contained in the Private
Securities Litigation Reform Act of 1995. Such statements are subject to
various risks and uncertainties, and actual results could differ
materially from those expressed or implied by such statements due to a
number of factors in addition to those discussed elsewhere in this Form
10-Q and in the Company's other public filings, press releases and
discussions with Company management. See Additional Factors Affecting
Business in the Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's 19971998
Annual Report on Form 10-K.

Overview of Operating Results

For 1998's third1999's first quarter, Anadarko hadreported a net loss available to
common stockholders of $2.3$23.1 million, or two19 cents per share. Revenues forshare (diluted),
on $136 million of revenues. The loss reflects a non-cash charge of
$20 million before taxes ($13.3 million after taxes) related to its
remaining operations in Eritrea as a result of drilling an unsuccessful
exploration well. By comparison, during the thirdfirst quarter of 1998, totaled $140.2 million. For the same period in
1997,
Anadarko had net income of $17.1$7 million, or 146 cents per share (diluted),
on $147 million of revenues.

Excluding the foreign impairment, the Company's net loss for the first
three months of 1999 was $9.8 million, or 8 cents per share (diluted).
In addition to the charge for Eritrea, the Company attributed the
decrease in revenues of $158.7 million. The decline in Anadarko's 1998 thirdand earnings during 1999's first quarter results from the same period in 1997 was primarily
due to substantiallysignificantly lower commodity prices, for crude oil, natural gas and
natural gas liquids (NGLs), partially offset by increased production
volumes. Higher costs and expenses, increased interest expense and
preferred stock dividends also affected the 1998 third quarter
performance.

For the first nine months of 1998, Anadarko's net income available to
common stockholders was $7.5 million (six cents per share). Revenues
for the first nine months of 1998 totaled $424.7 million. For the
corresponding period in 1997, Anadarko had $65.3 million in net income
(54 cents per share) on revenues of $469.1 million. The decline in
the first nine months of 1998 net income and revenues compared to the
same period in 1997 was due to substantially lower commodity prices,
which were partially offset by higher production volumes. Net income
for the first nine months of 1998 also reflects higher costs and
expenses, higher interest expense and
preferred stock dividends.

-14-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations

The following table shows the Company's volumes and average prices for
the three and nine months ended September 30, 1998 and 1997:

Three Months Ended
September 30 % Increase
1998 1997 (Decrease)

Natural gas, Bcf 45.7 45.4 1
Average daily volumes, MMcf/d 497 494 1
Price per Mcf $1.82 $2.02 (10)

Crude oil and condensate, MBbls 2,940 2,392 23
Average daily volumes, MBOPD 32 26 23
Price per barrel $11.46 $17.06 (33)

Natural gas liquids, MBbls 1,788 1,430 25
Average daily volumes, MBOPD 19 16 25
Price per barrel $9.44 $14.65 (36)

Nine Months Ended
September 30 % Increase
1998 1997 (Decrease)

Natural gas, Bcf 131.9 131.5 -
Average daily volumes, MMcf/d 483 482 -
Price per Mcf $1.94 $2.17 (11)

Crude oil and condensate, MBbls 7,871 6,643 18
Average daily volumes, MBOPD 29 24 18
Price per barrel $11.93 $18.26 (35)

Natural gas liquids, MBbls 5,062 3,693 37
Average daily volumes, MBOPD 19 14 37
Price per barrel $10.65 $14.65 (27)

__________________
See "Natural Gas Volumes and Prices" and "Crude Oil, Condensate
and Natural Gas Liquids Volumes and Prices".

Costs and expenses during the third quarter of 1998 were $124.5
million, an increase of 3% compared to $120.6 million for the third
quarter of 1997. The increase is primarily due to higher operating
expenses related to acquisition of domestic producing properties and
first production from Algeria, and higher administrative and general
expenses associated with the Company's growing workforce, offset
slightly by lower other taxes.

-15-
11

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

ForThe following table shows the Company's volumes and average prices for
the three months ended March 31, 1999 and 1998:

Three Months Ended
March 31 % Increase
1999 1998 (Decrease)

Natural gas, Bcf 44.0 44.0 -
Average daily volumes, MMcf/d 489 489 -
Price per Mcf $ 1.59 $ 2.02 (21)

Crude oil and condensate, MBbls 3,968 2,251 76
Average daily volumes, MBbls/d 44 25 76
Price per barrel $10.60 $13.02 (19)

Natural gas liquids, MBbls 1,632 1,704 (4)
Average daily volumes, MBbls/d 18 19 (4)
Price per barrel $ 8.60 $11.68 (26)

Total Energy Equivalent
Barrels (MMEEBs) 12.9 11.3 14

Bcf - billion cubic feet
MBbls - thousand barrels
MBbls/d - thousand barrels per day
Mcf - thousand cubic feet
MMcf/d - million cubic feet per day
MMEEBs - million energy equivalent barrels

Costs and expenses during the first nine monthsquarter of 1998, costs and expenses totaled $365.41999 (excluding the
impairment) were $124.2 million, essentially flat compared to the first
quarter of 1998.

Interest expense for the first quarter of 1999 was $18.6 million, an
increase of 8%51% compared to $338.0$12.4 million for the first nine months of 1997. Operating expense increased due to higher total
production volumes, acquisition of domestic producing properties and
initial production from Algeria. Administrative and general expenses
are up due to higher costs associated with the Company's growing
workforce. Expenses for depreciation, depletion and amortization
(DD&A) increased due to higher production volumes, partially offset by
a lower DD&A rate.

Interest expense for the third quarter of 1998 increased 31% to $15.0
million compared to $11.5 million for the third quarter of 1997. For
the first nine months of 1998, interest expense1998.
The increase was $41.1 million, an
increase of 44% compared to $28.7 million for the same period of 1997.
The increases in interest expense are primarily due to higher levels
of long-term debtaverage borrowings partially
offset by lower interest rates in 1998 compared to 1997.1999.

Natural Gas Volumes and Prices In 1998's third1999's first quarter, Anadarko'sthe
Company's natural gas production was 45.7 billion cubic feet (Bcf) of gas or 497
million cubic feet per day (MMcf/d), essentiallyaveraged 489 MMcf/d, level with 45.4 Bcf
or 494 MMcf/d during 1997'sthe same
period. 1998 third quarter gas
volumes remained strong despite temporary storm-related production
shut-insperiod in the Gulf of Mexico in August and September.1998. Anadarko's wellhead price for natural gas averaged $1.82was $1.59 per
thousand cubic feet
(Mcf)Mcf for the thirdfirst quarter of 1998, down 10%1999, off 21% from $2.02 per Mcf for
the third quarter of 1997.

During the first nine months of 1998, Anadarko's natural gas production
was level with the corresponding period in 1997. The Company produced
131.9 Bcf of gas or 483 MMcf/d in the first nine months of 1998.
Anadarko's wellhead natural gas price averaged $1.94 per Mcf, an 11%
decline from $2.17 per Mcf in 1997's same period.a year ago.

Crude Oil, Condensate and Natural Gas Liquids Volumes and Prices
During the third quarter of 1998, Anadarko's oil volumes grew 23%production for the first three months of 1999 rose 76% to
2.9 million barrels (MMBbls) or 32 thousand barrels (MBOPD)an average of 44 MBbls/d, up from 2.4 MMBbls or 26 MBOPD25 MBbls/d in 1997's1998's corresponding
period.
The increase in oil volumes reflected higher production in 1998 from
start up of production from the Company's Hassi Berkine South Field in
Algeria, which came onstream in May 1998, and the acquisition of
properties in the Golden Trend area of central Oklahoma earlier this
year. For the third quarter of 1998, oil production from Algeria was
466 thousand barrels net to Anadarko. The higher oil production volumes were offset by a 33%19% decline
in 1998's third1999's first quarter oil prices. Anadarko's average oil price for the
thirdfirst quarter of 19981999 was $11.46$10.60 per barrel, versus $17.06compared to $13.02 per
barrel for the third quarter of 1997.

-16-
a year ago.

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Anadarko's worldwide oil production forDuring the first ninethree months of 1998
rose by 18%1999, Anadarko's natural gas liquids
(NGLs) sales volumes averaged 18 MBbls/d, a 4% decline compared to the same period19
MBbls/d in 1997. For the first nine
months of 1998, oil volumes totaled 7.9 MMBbls or 29 MBbls per day,
versus 6.6 MMBbls or 24 MBOPD for the same period in 1997.
First production from Algeria and the Golden Trend property acquisition
contributed to the significant increase in oil volumes for 1998.
Anadarko's average oil price declined 35% for 1998's first nine months
compared to the same period in 1997. Oil prices averaged $11.93quarter. The Company's average price for NGLs
was $8.60 per barrel in 1998's1999's first nine months,quarter, 26% below an average
price of $11.68 per barrel a year ago.

Capital Expenditures, Liquidity and Dividends

During the first quarter of 1999, Anadarko's capital spending
(including capitalized interest and overhead) was $111.8 million
compared to $18.26 per barrel$268.1 million in the first quarter of 1998.

The Company believes that cash flows, existing or available credit
facilities and access to the public markets will provide the majority
of funds to meet its capital and operating requirements for 1999. The
Company will continue to evaluate funding alternatives, including
property sales and additional borrowing, to secure other funds for
capital development.

In March 1999, Anadarko issued $300 million principal amount of 7.20%
Debentures due 2029. The proceeds were used to repay floating interest
rate debt.

In April 1999, the Company amended its Revolving Credit Agreement and
entered into a new 364-Day Credit Agreement. The Revolving Credit
Agreement provides for $225 million principal amount and the 364-Day
Credit Agreement provides for $285 million principal amount. The
Revolving Credit Agreement expires in 2002.

In April 1999, Anadarko filed a shelf registration statement with the
Securities and Exchange Commission that permits the issuance of up to
$1 billion in debt and equity securities. Net proceeds, terms and
pricing of offerings of securities issued under the shelf registration
statement will be determined at the time of the offerings.

In May 1999, Anadarko issued 6.25 million shares of common stock.
Aggregate proceeds from the offering were approximately $240.5 million
after all expenses. Proceeds from the offering were used initially to
repay floating interest rate debt. The common stock was issued under
the Company's shelf registration statement.

Exploration and Development Activities

During the first quarter of 1999, Anadarko drilled or participated in
a total of 55 wells, including 21 oil wells, 21 gas wells and 13 dry
holes. This compares to a total of 109 wells in the first quarter of
1998, including 66 oil wells, 32 gas wells and 11 dry holes. Following
is a description of activity during the quarter.
13

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Gulf of Mexico In the Tanzanite Field (Eugene Island Block 346),
the Company is suspending the No. 2 well after successfully
encountering the same main pay zone as the original discovery well. The
No. 2 well was originally drilled to the northeast, outside of the
known amplitude, but only encountered minimal pay. The well was then
sidetracked to the east and encountered salt. Drilling to the south
proved successful as the well encountered the main reservoir as
expected. Aker Gulf Marine has been selected as the fabricator for the
same periodTanzanite jacket and production platform, and construction is scheduled
to start this summer. Anadarko has a 100% working interest in 1997.the
Field.

The first development well at the sub-salt Hickory (Grand Isle Block
116) discovery has been completed with encouraging results. The Company
serves as operator and has a 50% working interest in the Field.
Anadarko has proposed to partners that a production platform with the
capacity to produce about 300 MMcf/d of gas be built and that a third
well be drilled about three miles northeast of the original discovery
well.

Offshore activity during the first quarter of 1999 was highlighted by a
number of significant recompletion projects. The A-4 well at Matagorda
Island Block 623 flowed 25.8 MMcf/d of gas and 328 barrels of
condensate per day through a 54/64-inch choke after being recompleted
in a new productive sand. Anadarko owns a 37.5% working interest in the
BP Amoco-operated block.

At the Phillips-operated Mahogany Platform (Ship Shoal Block 349/359),
two development wells were completed in a shallower gas formation above
the main "P" sand pay zone and placed on production. The A-8 well
flowed 4.5 MMcf/d of gas through a 1/2-inch choke while the A-10 well
tested 4.1 MMcf/d of gas from a 1/4-inch choke. In March, the A-1 well
was recompleted in the "P" sand interval flowing 8.9 MMcf/d of gas and
2,595 BOPD through a 25/64-inch choke. Gross production from the
Mahogany Platform, including volumes from the Agate Field, was 15,800
BOPD and 50 MMcf/d of gas at the end of the first quarter. Anadarko has
a 37.5% working interest in the Field.

East Texas' Bossier Play The success achieved by the Company over
the past two years in the Bossier Sand Play continued in the first
quarter of 1999. Two rigs were added during the first quarter giving the
Company a total of eight rigs currently operating in the Bossier Play.
Gross production from the Dew and Mimms Creek Fields is currently about
55 MMcf/d of gas. Among the most significant completions reported in the
first quarter were:
Eubanks Trust No. 4 (6.8 MMcf/d), 100% Anadarko W.I.
High A-2 (4.8 MMcf/d), 100% Anadarko W.I.
McAdams A No. 4 (4.5 MMcf/d), 100% Anadarko W.I.
McAdams A No. 3 (2.7 MMcf/d), 100% Anadarko W.I.
H.E. White No. 3 (2.6 MMcf/d), 36% Anadarko W.I.
Turner A-1 (2.5 MMcf/d), 100% Anadarko W.I.
Hartley No. 3 (1.1 MMcf/d), 100% Anadarko W.I.

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

During the first quarter, Anadarko added a compression package to its
Dew Gathering system which reduced line pressure from 1,100 psi to
about 300 psi. With the addition of 3,800 lease acres in the first
quarter, the Company now has about 30,000 acres (gross).

Hugoton Embayment A 3-D seismic shoot conducted in 1997 that led to
the discovery of a new interval in the Basal Chester formation
continued to produce excellent results in the first quarter. The Smith
AE-3 well, in the Lorena East Field of Beaver County, Oklahoma, tested
480 BOPD and 180 thousand cubic feet per day of gas. This marks the
second oil well discovery (sixth successful well overall) in the Basal
Chester formation. The Company has a 100% working interest in the well.

Another significant completion in the first quarter included the Boles B-
5 well in the Wideawake Field of Seward County, Kansas. Anadarko owns a
100% working interest in the well which tested 1.7 MMcf/d of gas.

Alaska First quarter activity in Alaska was concentrated primarily
on the North Slope where development of the Alpine Field continues. The
first gravel pad has been completed and development drilling has begun
from these permanent locations. Overall, the facilities are about 65%
complete. To the north of Alpine, two exploration wells have been
drilled; however, results have not been made public by the operator.

Construction of production modules for Alpine, underway at Nikiski on
the southern coast of Alaska and Corpus Christi, Texas, progressed in
the first quarter. First production of 40,000 BOPD (gross) from the
Alpine Field is expected to begin in mid-2000, increasing to 70,000 BOPD
(gross) in 2001. Anadarko owns a 22% working interest in the ARCO Alaska-
operated Field.

Algeria Development work on several important fields, including
Hassi Berkine South (HBNS), comprised most of the activity in Algeria
during the first quarter. The Company also reported a successful
development well in the Qoubba Field-since renamed Ourhoud (ORD)-on
Block 404. The QB-3 well, in the northwest portion of the Field, came
in structurally high. In February, Algeria's Council of Ministers
announced the approval of the Exploitation License for ORD.

Under a Production Sharing Agreement (PSA), Anadarko has a 50% interest
covering Blocks 404 and 208, 211 and 245 before participation in the
exploitation phase by SONATRACH. Anadarko's NGLs sales volumestwo partners in this PSA
are LASMO Oil (Algeria) Limited and Maersk Olie Algeriet AS. Under the
terms of the agreement, liquid hydrocarbons discovered, developed and
produced are shared by SONATRACH, Anadarko and its two partners. Under
a separate PSA, Anadarko has a 27.5% interest in Blocks 401a and 402a
which are operated by BHP Petroleum (Algerie) Inc. The Company's other
partners are LASMO and Maersk.

North Atlantic Margin The first exploration well on Tranche 61
began drilling on April 10. The well is located on Block 214/4 where
the water depth is over 5,300 feet. Anadarko has a 7.5% working
interest in the well, which is operated by Mobil North Sea Limited.
15

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Eritrea Anadarko's third exploration well offshore Eritrea was
unsuccessful. The Edd No. 1 well was drilled to a total depth of 3,262
meters (10,765 feet) on the Edd Block in the Red Sea. In 1998, the
venture drilled two wells on the nearby Zula Block which also were
unsuccessful.

In the first quarter of 1999, Anadarko recorded a non-cash charge
related to its remaining operations in Eritrea as a result of the dry
hole on the Edd Block. Anadarko serves as operator and holds a 50%
interest in both the Edd and Zula concessions. The remaining interests
are held by Agip Eritrea B.V. with 30% and Burlington Resources Eritrea
Limited with 20%.

Year 2000 Overview The Year 2000 issue relates to the inability of
certain computers and software applications to correctly recognize and
process date sensitive information for the Year 2000 and beyond. Without
correction, the computers and software applications could fail or create
erroneous information. The Company has established a Year 2000
Compliance Program focused on minimizing disruptions of the Company's
operations as a result of the millennium change. Since this problem
could affect the Company's systems, as well as the systems of its
business partners, the Program focuses on the internal systems and
external services considered most critical to Anadarko's continuing
operations.

Since 1993, the Company has enhanced its scientific processing
capabilities, implemented new business systems and upgraded its
network infrastructure. These information systems were purchased from
leading suppliers of technology, most of whom are representing their
products to be Year 2000 compliant. The Company is in the process of
testing third-party hardware and software for compliance, which
should be completed by the end of the third quarter 1999. Any
necessary replacements of non-compliant computer equipment and
software are underway and should also be completed by the end of the
third quarter 1999.

Embedded system inventories' assessments for domestic and internal
operations have been completed. Remediation and testing are in progress
and will be completed by the end of the third quarter of 1998 rose 25%1999.

The Company is assessing the readiness of its business partners,
including joint-venture operators and outside-operated pipeline and
processing facilities as well as suppliers of goods and services.
Interruptions in these services could disrupt Anadarko's production
and delivery of oil, gas and NGLs early in 2000. Analysis and review
of key business partners is underway. Natural gas affiliates
providing gathering, transportation and processing services are being
contacted to 1.8 MMBbls or 19 MBOPD, up from 1.4 MMBbls ordetermine Year 2000 compliance at inter-connect and
sales points. Operations personnel have completed the development of
critical vendor and commodities lists. The assessment of the critical
suppliers and availability of goods and services is in progress.
These efforts should be completed by the end of the second quarter of
1999.
16
MBOPD
during 1997's corresponding period. Increased NGLs volumes were
offset
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Contingency Planning The Company is developing contingency plans to
provide business continuity and to address operations, safety and
environmental concerns. A model contingency planning guide has been
developed. Planning by lower NGLs prices, which fell 36%the individual departments is in progress and
expected to $9.44 per barrel inbe completed by the end of the third quarter of 1998 from $14.65 per barrel1999.

NGLs volumespartnerships in which Anadarko is not the
operator. As of March 31, 1999, the Company had spent less than $1
million for the first nine monthsYear 2000 project. These expenditures include costs
to establish Year 2000 testing facilities, inventory field automation
equipment domestically and internationally, and purchase Year 2000
scanning software. In total, the Company expects to spend $3.5
million to test internal systems, upgrade and replace hardware and
software, and complete field automation testing. The remaining $1.5
million is for replacement of 1998 increased 37%any non-compliant field automation
equipment discovered during testing, instrumentation consulting
services and contingency planning. Anadarko's Year 2000 Program is
an on-going process that may result in changes to 5.1
MMBbls or 19 MBOPD, up from 3.7 MMBbls or 14 MBOPDcost estimates and
schedules as testing and business partner assessment progresses.

Risks The Company expects to have all internal systems and computer
equipment Year 2000 compliant prior to the millennium change. The
Company is relying on its business partners and suppliers to be Year
2000 ready as well. Failure of significant third parties to complete
their Year 2000 compliance projects could interrupt the supply of
materials and contract services needed for oil and gas operations.
Disruptions to oil and gas transportation networks controlled by third-
party carriers could result in 1997's same
period. The substantial rise inreduced production volumes was offsetdelivered to
market. Risk associated with foreign operations may increase with the
uncertainty of Year 2000 compliance by foreign governments and their
supporting infrastructures. Such occurrences could have a 27% decline inmaterial
adverse effect on the Company's average NGLs price forbusiness, results of operations and
financial condition. However, the first nine
monthsYear 2000 Program is expected to
significantly reduce the Company's level of 1998. Anadarko's NGLs price averaged $10.65 per barrel foruncertainty about the first nine months of 1998, versus $14.65 per barrel for the same
period in 1997.Year
2000 issue.
17

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Use of Derivatives Anadarko produces, purchases and sells natural
gas, crude oil and NGLs. As a result, Anadarko's financial results can
be significantly affected by changes in these commodity prices.
Anadarko uses derivative financial instruments to hedge the Company's
exposure to changes in the market price of natural gas and crude oil,
to provide methods to fix the price for natural gas independently of
the physical purchase or sale and to manage interest rates. Commodity
financial instruments also provide methods to meet customer pricing
requirements while achieving a price structure consistent with the
Company's overall pricing strategy. While commodity financial
instruments are intended to reduce the Company's exposure to declines
in the market price of natural gas and crude oil, the commodity
financial instruments may also limit Anadarko's gain from increases in
the market price of natural gas and crude oil. As a result, gains and
losses on commodity financial instruments are generally offset by
similar changes in the realized price of natural gas and crude oil.
Gains and losses are recognized in revenues for the periods to which
the commodity financial instruments relate. Anadarko's commodity
financial instruments currently are comprised of futures, swaps and
options contracts.

-17-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

While the volume of derivative commodity instruments utilized by the
Company to hedge its market price risk can vary during the year within
the boundaries of its established policy guidelines, the fair value of
those instruments at September 30, 1998March 31, 1999 and December 31, 19971998 was, in the
judgment of the Company, immaterial. Additionally, through the use of
sensitivity analysis, the Company evaluates the potential effect that
reasonably possible near term changes in the market prices of natural
gas and crude oil may have on the fair value of the Company's
derivative commodity instruments. Based upon an analysis utilizing the
actual derivative contractual volumes and assuming a 10% adverse
movement in commodity prices, the potential decrease in the fair value
of the derivative commodity instruments at September 30,
1998March 31, 1999 and
December 31, 19971998 does not have a material adverse effect on the
financial position or results of operations of the Company.

The Company also evaluated the potential effect that reasonably possible
near term changes in interest rates may have on the fair value of the
Company's interest rate swap agreement. Based upon an analysis,
utilizing the actual interest rates in effect as of September
1998March 31, 1999 and
December 199731, 1998 and assuming a 10% increase in interest rates, the
potential decrease in the fair value of the derivative interest swap
instrument at September 30, 1998March 31, 1999 and December 31, 19971998 does not have a
material effect on the financial position or results of operations of
the Company.
Capital Expenditures, Liquidity and Dividends

During the first nine months of 1998, Anadarko's capital spending
(including capitalized interest and overhead) was $672.4 million
compared to $496.4 million in the same period of 1997.

The Company believes cash flows, including proceeds from divestitures,
issuances of additional debt or securities, and existing credit
facilities will be sufficient to meet capital and operating
requirements, including any contingencies, during 1998.

In January 1998, Anadarko issued $100 million principal amount of
6.625% Debentures due 2028. The proceeds were used to fund capital
spending projects in core operating areas.

In March 1998, Anadarko filed a shelf registration statement with the
Securities and Exchange Commission (SEC) that permits the issuance of
up to $500 million in debt and equity securities. Net proceeds, terms
and pricing of offerings of securities issued under the shelf
registration statement will be determined at the time of the offerings.

-18-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

In April 1998, the Company's Revolving Credit and 364-Day Credit
Agreements were amended. The Revolving Credit Agreement was amended to
increase the number of commercial banks in the group from eight to
nine. The 364-Day Credit Agreement was amended as follows: the
principal amount of the Agreement was increased from $125 million to
$175 million; the number of commercial banks in the group was changed
from eight to nine; and the expiration date of the Agreement was
extended for 10 months.

In April 1998, the Board of Directors approved a two-for-one stock
split. The stock split was effected by way of a stock dividend. The
distribution date was July 1, 1998 to stockholders of record on
June 15, 1998.

In May 1998, Anadarko issued $200 million of 5.46% Series B Cumulative
Preferred Stock in the form of two million depositary shares, each
depositary share representing 1/10th of a share of the 5.46% Series B
Cumulative Preferred Stock. The preferred stock has no stated maturity
and is not subject to a sinking fund or mandatory redemption. The
shares are not convertible into other securities of the Company.

In October 1998, the Company filed a registration statement with the
SEC that permits the issuance of Anadarko common stock under the
Anadarko Dividend Reinvestment and Stock Purchase Plan (DRIP). The DRIP
offers the opportunity to reinvest dividends and provides an
alternative to traditional methods of buying, holding and selling
Anadarko common stock. The DRIP will provide the Company with a means
of raising additional capital for general corporate purposes through
the sale of common stock under the DRIP.

In October 1998, the Board of Directors adopted a Stockholders Rights
Plan, which replaced the Rights Plan that expired on October 20, 1998.
Under the Rights Plan, the Rights will be distributed as a dividend at
a rate of one Preferred Stock Purchase Right for each share of the
Company's common stock held of record on November 10, 1998. Each Right
will entitle stockholders to purchase from the Company one one-
thousandth of a share of a new series of junior participating preferred
stock at an exercise price of $175. The Right will be exercisable only
if a person or group acquires 15% or more of common stock or announces
a tender offer or exchange offer the consummation of which would result
in ownership by a person or group of 15% or more of the common stock.
The Rights distribution is not taxable to stockholders. The Rights
will expire on November 10, 2008.

-19-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Anadarko's Board of Directors declared quarterly dividends on two
classes of the Company's stock. A dividend of $13.65 per share
(equivalent to $1.365 per depositary share) was declared on the
Company's 5.46% Series B Cumulative Preferred Stock, payable on
December 31, 1998, to stockholders of record at the close of business
on December 15, 1998. A dividend of $0.05 cents per share was declared
on the Company's common stock outstanding, payable on December 23,
1998, to stockholders of record at the close of business on December 9,
1998.

Under the most restrictive provisions of the Company's credit
agreements, which limit the payment of dividends, retained earnings of
$667,806,000 were not restricted as to the payment of dividends at
September 30, 1998. The amount of future dividend payments for
Anadarko common stock will depend on the Company's earnings, financial
condition, capital requirements and other factors and will be
determined by the Board on a quarterly basis.

Exploration and Development Activities

In October 1998, Anadarko updated its production growth targets for
the next five years. The Company expects production to grow at an
average rate of 18% a year over the five-year period. Production in
1998 is expected to be 48 million energy equivalent barrels (EEBs),
increasing to 92 million EEBs in 2002. The increases in production
volumes are primarily from discoveries in Alaska, development of
Algeria fields and recent sub-salt discoveries in the Gulf of Mexico,
Tanzanite and Hickory. The production forecast assumes capital
spending of about $700 million a year and no new exploration success.

During the third quarter of 1998, Anadarko participated in a total of
116 wells, including 58 oil wells, 47 gas wells and 11 dry holes.
This compares to a total of 172 wells, including 110 oil wells, 43 gas
wells and 19 dry holes during the third quarter of 1997. For the
first nine months of 1998, Anadarko participated in a total of 320
wells, including 173 oil wells, 113 gas wells and 34 dry holes. This
compares to a total of 447 wells, including 276 oil wells, 125 gas
wells and 46 dry holes during the first nine months of 1997.
Following is a description of activity during the first nine months of
1998.

Gulf of Mexico Third quarter highlights included the release of
test results from the Tanzanite sub-salt discovery. The well tested
21,917 barrels of oil per day (BOPD) of 21.9-degree API gravity oil
and 29.7 MMcf/d of gas with flowing tubing pressure of 2,679 psi.
The flow rate is the highest ever for an Anadarko-operated well and
one of the highest rates ever recorded in the shallow waters of the
Gulf of Mexico. The discovery well encountered 450 feet of continuous

-20-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

hydrocarbon pay. Design work is now underway on a production
platform for Tanzanite and the Company is negotiating a construction
contract. The project is expected to be completed in about 22 months
with first production scheduled for the third quarter of 2000. The
first offset development well at Tanzanite is currently drilling.
Anadarko owns a 100-percent working interest in the discovery which is
located on Eugene Island 346 about 75 miles offshore Louisiana in 314
feet of water.

On October 20, the Company announced its second major sub-salt
discovery. The Hickory well, located at Grand Isle 116 about 75 miles
offshore Louisiana, encountered 300 feet of hydrocarbon pay after being
drilled to a total depth of 21,600 feet. The well penetrated a salt
section approximately 8,000 feet thick, which the Company believes to
be the thickest section of salt ever drilled in the Gulf of Mexico. The
Global Baltic I jack-up rig has been contracted by Anadarko and
partners to immediately begin drilling a field delineation well from
the same surface location to develop proved reserves and explore for
other pay horizons. First production is expected in the year 2000.
Anadarko (operator) owns a 50-percent working interest in Grand Isle
Blocks 110, 111 and 116 along with partners Shell Oil Company (37.5
percent) and Ocean Energy (12.5 percent).

Production from another sub-salt discovery - Agate - began during
1998's third quarter. During testing, the well, located on Ship Shoal
Block 361, flowed 13.0 MMcf/d of gas and 1,788 barrels of condensate
per day (BCPD) from a 17/64-inch choke with flowing tubing pressure of
7,195 psi. Production through a sub-sea completion increased during the
third quarter to 2,500 BCPD and 19.5 MMcf/d of gas. The Company has a
50-percent working interest in the Phillips-operated Block.

Additional highlights from Anadarko's offshore activities during the
first three quarters of 1998 include the completion of two wells at
East Cameron 157. The A-7 well tested 25.4 MMcf/d of gas and 557 BCPD
and the A-3 well produced 4.9 MMcf/d of gas and 245 BCPD. Anadarko is
operator of the platform with a 100-percent working interest.

During the third quarter, construction of a pipeline from the Matagorda
Island 623 platform to the El Paso Energy-operated Tomcat system was
completed. The seven-mile tie-in reduces pressures at the platform,
increasing production to approximately 310 MMcf/d of gas. Anadarko owns
a 37.5-percent working interest in the Amoco-operated field.
-21-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

The B-5 well at the High Island Block A-376, an extended reach well,
was placed on production earlier in the year averaging 2.0 MMcf/d of
gas. The construction of a compressor package is nearing completion,
which is expected to double the Company's output from the B-5 well and
another well on the platform. Anadarko owns a 100-percent working
interest in the B-5 well and a 33.8-percent working interest in the
remaining wells in the Field.

Hugoton Embayment Activity in Anadarko's deep drilling program
continued strong in the third quarter, with successes in two fields
where 3-D seismic has played an important role in identifying
prospects. In the Lorena East Field of Beaver County, Oklahoma, three
wells were completed, resulting in combined production of 36 MMcf/d of
gas and confirmation of the discovery of a new reservoir in the Chester
formation. The first confirmed oil well in the Basal Chester sand, the
Smith AE-1, flowed 501 BOPD and 500 thousand cubic feet per day (Mcf/d)
of gas. Drilling targets were identified using information obtained
from the 32 square-mile Turpin seismic survey shot in late 1997.
Anadarko owns a 100-percent working interest in these Lorena Field
wells.

In the Archer Field of Seward County, Kansas, Anadarko has completed 14
successful wells in 1998 as part of its delineation program in the St.
Louis formation. The Headrick A-2 well was recompleted during the third
quarter and flowed 323 BOPD and 276 Mcf/d of gas. The St. Louis
formation, while prolific, has traditionally been difficult to image.
Again, the use of 3-D seismic technology has been a very valuable tool.
Through the first nine months of 1998, production from the Archer Field
has averaged 719 BOPD and 1.1 MMcf/d of gas. Other significant
completions in the Hugoton Embayment during the third quarter include:
Charity A-2, Panoma Council Grove Field (590 Mcf/d of gas)
KU Endowment G-1, Wildcat Field (1.4 MMcf/d of gas).

Noteworthy completions in the Hugoton Embayment during the first nine
months of 1998 include:
Lemon Trust B-2, Condit Field (2.0 MMcf/d of gas)
Box A-1, Condit Field (1.5 MMcf/d of gas)
Schneider Alley A-1, Liberal SE Field (1.0 MMcf/d of gas)
Malin B-1, Fedder Southwest Field (1.0 MMcf/d of gas)
Milhon B-1, Fedder Southwest Field (1.6 MMcf/d of gas)
USA Barker A-3, Berryman Richfield Field (2.5 MMcf/d of gas)
Trader A-1, Light Field (2.2 MMcf/d of gas)
Smith AD-3, Price Field (4.0 MMcf/d of gas, 231 BOPD).

-22-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Central Oklahoma Golden Trend activity during the third quarter
included test results from four significant completions in the SW
Antioch Field of Garvin County, Oklahoma:
Paul "A" 2-34 (980 Mcf/d of gas, 147 BOPD)
Sanford D-2 (340 Mcf/d of gas, 68 BOPD)
Layton State No. 2 (710 Mcf/d of gas, 152 BOPD)
Annie Cole No. 5-36 (362 Mcf/d of gas, 44 BOPD).

Another Golden Trend completion during the third quarter was the Mowdy
"A" No. 1-32 well, located in the Laflin Creek West Field of Grady
County, Oklahoma. The well was completed in four separate intervals
with comingled production of 507 Mcf/d of gas and 80 BOPD. Anadarko
has a 69-percent working interest in the well. Additional completions
during the first three quarters of 1998 include:
Lance "A" No. 3-33, Bradley Field (1.7 MMcf/d of gas, 339
BOPD)
Jack Hammer No. 2-31, Bradley Field (1.2 MMcf/d of gas, 110
BOPD)
Manatt A-2, SW Antioch Field (1.1 MMcf/d of gas, 160 BOPD)
EXPH 2-31, SW Antioch Field (736 Mcf/d of gas, 83 BOPD)
Tomlinson "A" No. 4-26, SW Antioch Field (1.2 MMcf/d of gas,
109 BOPD).

East Texas' Bossier Sand Play The brisk pace that has marked
activity in the Dew Field of Freestone County this year continued in
the third quarter with six rigs in operation. The Company has completed
20 wells during the first nine months of 1998, bringing Field
production to over 50 MMcf/d of gas. Production volumes from the Field
have increased five-fold since the beginning of the year. The Bossier
Sand Play is now the Company's third largest onshore gas field.
Significant completions in the third quarter include:
Henderson No. 2 (4.8 MMcf/d of gas)
Henderson No. 3 (2.5 MMcf/d of gas)
Henderson No. 4 (3.5 MMcf/d of gas)
B.K. Johnson "A" No. 1 (3.3 MMcf/d of gas)
J.H. Moore No. 2 (3.0 MMcf/d of gas)
Eubanks Trust No. 2 (2.7 MMcf/d of gas)
Lancaster A-1 (1.2 MMcf/d of gas)
H.E.White No. 2 (3.1 MMcf/d of gas)
J.H. Moore No. 3 (1.2 MMcf/d of gas)
English No. 4 (1.3 MMcf/d of gas).

-23-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Permian Basin In response to lower oil prices, Anadarko has
deferred some Permian Basin drilling projects until oil prices recover.
Activity throughout 1998 has been focused on infill drilling and
waterflood projects at the Company's TXL North and TXL South Units
where 45 wells have been drilled during the first nine months.
Combined gross production from both units at the end of the third
quarter was 5,270 BOPD and 14.4 MMcf/d of gas.

This year, efforts have also been concentrated on continuing
development of the Ketchum Mountain (Clearfork) Field, located in
Irion County, Texas. Anadarko has drilled 94 wells in the Permian
Basin through the first nine months of 1998.

Alaska During the third quarter, Anadarko completed its first
Company-operated well in the Cook Inlet. The Lone Creek No. 1 on the
Moquawkie Prospect flowed 10.6 MMcf/d of gas through a 33/64-inch choke
with 925 psi flowing tubing pressure from 53 feet of perforations at
about 2,400 feet. This represents one of the best shallow gas tests in
the vicinity for a reservoir of this age and type. The well, which is
located about 40 miles west of Anchorage on lands leased from Cook
Inlet Region, Inc., also encountered several other possibly productive
gas zones totaling about 180 feet that were not flow tested. Anadarko
and ARCO Alaska each hold a 50-percent working interest in the
discovery. Additionally, the partners hold approximately 56,000
leasehold acres in the Moquawkie area and 178,000 acres in the Cook
Inlet area of south central Alaska. The partners are preparing plans to
develop this new discovery, which may lead to additional drilling and
installation of facilities necessary to produce this and subsequent
wells.

Work on development facilities in the Alpine Field continues to
progress. North Slope activity has been suspended waiting on winter
weather to allow completion of the gravel drilling pads and airstrip.
Once completed, drilling and development operations will be able to
continue year-round. Elsewhere (primarily Anchorage and Kenai),
significant construction activity on the production facility modules is
underway. These prefabricated modules are scheduled to be transported
to the North Slope for installation at the Alpine Field site during the
1999-2000 winter season. The project is about 20 percent complete.

-24-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

In August 1998, the Company announced a major exploration agreement
with Alaska's Arctic Slope Regional Corporation (ASRC) that gives
Anadarko exclusive access to more lands for exploration than any other
oil company operating in the state. The agreement provides Anadarko
with exploration rights to 2.3 million acres that ASRC has under title
currently. The Company also has exploration rights to an additional one
million acres now held by the Bureau of Land Management. ASRC will
eventually claim title to about 240,000 acres in this area as part of
its land selection rights under the Alaska Native Claims Settlement
Act.

In Alaska's State Lease Sale 87, Anadarko was the third most active
bidder, investing $8.1 million (net) to acquire 26 tracts. Of those, 20
tracts are held by the Company alone, with the other six held in
partnership with Fina, Inc. The area covered by the lease sale, called
the Foothills, is located in the North Slope area and is intermingled
with and adjacent to some of the state lands acquired by Anadarko as
part of an agreement with ASRC.

Algeria In the third quarter, Anadarko lifted its first cargo of
Algerian crude oil. The 663,000-barrel shipment came from the HBNS
Field via the Central Production Facility and was bound for a customer
with operations along the Mediterranean. Gross production at the end
of the third quarter was 30,000 BOPD. At the end of the third quarter,
Anadarko was drilling the HBNS-13 development well on Block 404 and
the EKT-4 delineation well on Block 208. A third rig was being moved
to the QB-1 development well.

Eritrea Drilling has been completed at the Bulissar prospect on the
Zula Block in the Red Sea. While declared a dry hole, the joint venture
is encouraged by the results of its drilling program. The well
encountered source rocks at multiple levels, good seals, and reservoir
quality sands. In addition, traces of oil were recovered from sidewall
cores. These results add to the understanding of this largely
unexplored portion of the Red Sea.

Anadarko and its partners plan to drill two additional wells offshore
Eritrea. Drilling activity now moves to the Du Rig-Rig Prospect, 90
miles northwest of Bulissar, with a well that was spud in early
November 1998. Anadarko is operator for its Eritrean program and has a
50 percent interest with 30 percent owned by Agip Eritrea B.V. and 20
percent owned by Burlington Resources.

-25-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Year 2000

Overview The Year 2000 issue relates to the inability of certain
computers and software applications to correctly recognize and process
date sensitive information for the Year 2000 and beyond. Without
correction, the computers and software applications could fail or
create erroneous information. The Company has established a Year 2000
Compliance Program focused on minimizing disruptions of the Company's
operations as a result of the millennium change. Since this problem
could affect the Company's systems, as well as the systems of its
business partners, the Program focuses on the internal systems and
external services considered most critical to Anadarko's continuing
operations.

Since 1993, the Company has enhanced its scientific processing
capabilities, implemented new business systems and upgraded its network
infrastructure. These information systems were purchased from leading
suppliers of technology, most of whom are representing their products
to be Year 2000 compliant. The Company is in the process of testing
third-party hardware and software for compliance, which should be
completed by mid-year 1999. Any necessary replacements of non-compliant
computer equipment and software are underway and should also be
completed by mid-year 1999.

Inventories of process control and field automation equipment (embedded
systems) are anticipated to be completed by year-end 1998. External
field instrumentation specialists will help assess equipment for Year
2000 compliance and develop test plans. This activity is scheduled to
begin in December 1998. All embedded systems are expected to be in
compliance by the end of the third quarter of 1999.

Contingency Planning The Company will develop contingency plans to
provide business continuity and to address operations, safety and
environmental concerns. This effort is expected to begin in January
1999 and should be completed by the end of the third quarter of 1999.

-26-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Estimated Cost The total cost of testing, remediation and
contingency planning is expected to be approximately $5 million, which
will be funded by operating cash flows. This estimate does not include
the Company's share of potential Year 2000 costs as a result of
participation in partnerships in which Anadarko is not the operator. As
of September 30, 1998, the Company had spent less than $500,000 for
planning, systems inventories and business partner and supplier
notification. The Company expects to spend $3 million to test internal
systems, replace and upgrade equipment, and complete field automation
testing. The remaining $1.5 million is for replacement of any non-
compliant field automation equipment discovered during testing,
instrumentation consulting services and contingency planning.
Anadarko's Year 2000 Program is an on-going process that may result in
changes to cost estimates and schedules as testing and business partner
assessment progress.

Risks The Company expects to have all internal systems and computer
equipment Year 2000 compliant prior to the millennium change. The
Company is relying on its business partners and suppliers to be Year
2000 ready as well. Failure of significant third parties to complete
their Year 2000 compliance projects could interrupt the supply of
materials and contract services needed for oil and gas operations.
Disruptions to oil and gas transportation networks controlled by third-
party carriers could result in reduced production volumes delivered to
market. Risk associated with foreign operations may increase with the
uncertainty of Year 2000 compliance by foreign governments and their
supporting infrastructures. Such occurrences could have a material
adverse effect on the Company's business, results of operations and
financial condition. However, the Year 2000 Program is expected to
significantly reduce the Company's level of uncertainty about the Year
2000 issue.

Forward looking statements contained in the Year 2000 discussion above
should be read in conjunction with Additional Factors Affecting
Business in the Management's Discussion and Analysis of Financial
Condition and Results of Operations in the Company's 1997 Annual Report
on Form 10-K.

-27-

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)

Changes in Accounting Principles

Pensions and Other Postretirement Benefits Reporting Statement of
Financial Accounting Standards (SFAS) No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits", amends the
disclosure requirements with respect to pensions and other post-
retirement benefits in annual financial statements. SFAS No. 132 does
not change any of the current guidance on expense measurement or
recognition related to these areas. The Company will adopt SFAS No.
132 for the year ended December 31, 1998.

Accounting for Derivatives SFAS No. 133, "Accounting for Derivative
Instruments and for Hedging Activities", provides guidance for account-
ing for derivative instruments and hedging activities. SFAS No. 133
is effective for fiscal years beginning after June 15, 1999. The
Company has not yet completed an evaluation of the impact of the
provisions of SFAS No. 133.

-28-
18

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Kansas Ad Valorem Tax See Note 98 of the Notes to Consolidated
Financial Statements under Part I,I. Financial Information of this Form 10-Q.

-29-

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibits not incorporated by reference to a prior filing are
designated by an asterisk (*) and are filed herewith; all exhibits
not so designated are incorporated herein by reference to a prior
filing as indicated.

Exhibit Original Filed File
Number Description Exhibit Number

3(a) Restated Certificate of Incorporation of Anadarko 19(a)(i) to Form 10-Q 1-8968
Incorporation of Anadarko for the quarter ended
Petroleum Corporation, for quarter ended
DatedSeptember 30, 1986
dated August 28, 1986

September 30, 1986

(b)*(b) Amendment to the Restated
Certificate of Incorporation
of Anadarko Petroleum
Corporation, dated
April 29, 1999

*10(a)(i)*4(a) Amendment to Revolving
Credit Agreement, Concerning the
Methoddated
as of ApplicationApril 15, 1999

*(b) 364-Day Credit Agreement,
dated as of the
Contract signed on 23 October
1989 between Sonatrach and
Anadarko Algeria Corporation

*(ii) Amendment No. 1 to the
Agreement for the Exploration
and Exploitation of Liquid
Hydrocarbons between Sonatrach
and Anadarko Algeria Corporation
signed October 23, 1989April 15, 1999

*12 Computation of Ratios of
Earnings to Fixed Charges
and Earnings to Combined
Fixed Charges and Preferred
Stock Dividends

*27 Financial Data Schedule

(b) Reports on Form 8-K

There were no reports filed on Form 8-K for the three months
ended September 30, 1998.

-30-
March 31, 1999.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned duly authorized officer and principal financial
officer.

ANADARKO PETROLEUM CORPORATION
(Registrant)

NovemberMay 13, 1998 [Michael1999 [MICHAEL E. Rose]ROSE]
Michael E. Rose - Senior Vice President,
Finance and Chief Financial Officer