EXHIBIT 99.1
Anadarko Announces Record 2004 Results
HOUSTON--(BUSINESS WIRE)--Jan. 28, 2005--Anadarko Petroleum
Corporation (NYSE:APC) President and CEO Jim Hackett said: "Anadarko
performed exceptionally well in 2004 -- a period in which we have
reshaped the entire company and changed the way we think and work in
order to focus on improving returns for shareholders and positioning
ourselves for sustainable, profitable growth.
"We achieved record 2004 net income, with outstanding
contributions from our Texas, Louisiana and other core onshore
properties. In addition, we made discoveries and advanced development
projects in the deepwater Gulf of Mexico and made progress on our
international growth strategy. I believe Anadarko is well prepared for
the future."
FOURTH-QUARTER 2004 FINANCIAL RESULTS
Fourth-quarter net income available to common shareholders was
$405 million, or $1.64 per share (diluted), on revenues of $1.6
billion. Net income included an impairment in Qatar, certain legal
settlements and charges related to the implementation of the refocused
strategy, such as the repurchase of debt and the sale of non-core
properties, offset partly by a change in Canadian tax rates. These
items amounted to a net decrease of $96 million after taxes, or 39
cents per share (diluted). Net income included no gains or losses from
the oil and gas asset sales, as proceeds were recognized as an
adjustment of capitalized costs under full-cost accounting rules.
Earnings for the fourth quarter of 2003 were $294 million, or $1.17
per share (diluted), on revenues of $1.28 billion. Fourth quarter 2003
net income included a net increase of $32 million after taxes, or 13
cents per share (diluted), related to a decrease in Canadian tax rates
offset partly by impairments and restructuring costs.
Cash flow from operating activities totaled $456 million in the
fourth quarter, compared with $744 million for the fourth quarter of
2003. Cash flow from operations before changes in assets and
liabilities for the fourth quarter of 2004 totaled $1.03 billion,
which includes a reduction of $93 million for current income taxes
related to the 2004 asset divestitures. The changes in assets and
liabilities, as well as other items, were primarily a result of U.S.
tax payments and Canadian deferred taxes in the fourth quarter, both
of which were in connection with the asset divestitures.
Fourth-quarter 2003 cash flow was $728 million.(1)
Fourth-quarter sales volumes totaled 46 million barrels of oil
equivalent (BOE), compared to 49 million BOE in 2003. Property
divestitures prior to the end of the year reduced Anadarko's
fourth-quarter 2004 production by about 5 million BOE.
FULL YEAR 2004 FINANCIAL RESULTS
Anadarko reported full-year 2004 net income available to common
shareholders of $1.6 billion, or $6.36 per share (diluted), on
revenues of $6.07 billion. Net income included international property
impairments, certain litigation and other settlements, and costs
associated with the refocused strategy, offset partly by a change in
Canadian tax rates. These items totaled a net decrease of $226 million
after taxes, or 90 cents per share (diluted). Net income in 2003 was
$1.29 billion, or $5.09 per share (diluted), on revenues of $5.12
billion, which included a net decrease of $26 million after taxes, or
10 cents per share (diluted), for impairments and restructuring costs,
partly offset by a decrease in Canadian tax rates and a change in
accounting principle.
Cash flow from operating activities totaled $3.21 billion in 2004,
up from $3.04 billion in 2003. Cash flow from 2004 operations before
changes in assets and liabilities totaled $3.48 billion, which
includes a reduction of $440 million for current income taxes related
to the 2004 asset divestitures. This compares to $3.16 billion in
2003.(1)
Sales volumes of natural gas, crude oil and natural gas liquids
for 2004 totaled 190 million BOE, compared to 2003 volumes of 192
million BOE. Assuming the divested properties were owned by Anadarko
for the entire year, the company believes 2004 volumes would have been
approximately 196 million BOE.
"This year, we made some tough decisions to implement a new
strategy for Anadarko. We completed over $3 billion in pre-tax asset
sales and refocused our efforts into areas where we have a competitive
advantage: exploration and unconventional resource exploitation on a
global basis," Hackett said. "The divested assets represent about 11
percent of 2003 year-end reserves and about 20 percent of 2004 annual
production. The proceeds were used primarily to repurchase $1.3
billion, or 20.3 million shares, of outstanding common stock and to
retire approximately $1.2 billion in debt. In addition, we ended the
year with nearly $900 million of cash. Altogether, our greatly
enhanced net debt to proved developed reserves and lower
debt-to-capitalization ratios reflect our stronger and more flexible
balance sheet."
PROVED RESERVES & OIL AND GAS CAPITAL EXPENDITURES
Anadarko added 335 million BOE in proved reserves during 2004,
ending the year with a total of 2.37 billion BOE. This is the 23rd
consecutive year that Anadarko has more than replaced annual
production with new proved reserves. Oil and gas capital expenditures
totaled $2.99 billion in 2004.
Anadarko sold properties accounting for 288 million BOE of 2003
year-end reserves, which contributed to a year-over-year reduction.
Reserve additions in 2004 came primarily from fields in the North
Louisiana Vernon, East Texas Bossier, West Texas Haley, Wyoming Salt
Creek and Canadian Wild River areas, as well as the K2, K2 North,
Spiderman and Jubilee deepwater discoveries in the Gulf of Mexico.
Anadarko's proved reserves remain nearly balanced between natural
gas (53 percent) and liquids (crude oil, condensate and natural gas
liquids) (47 percent). Proved reserves of oil and other liquids
totaled 1.11 billion barrels at year-end 2004. Proved natural gas
reserves at year-end 2004 totaled 7.5 trillion cubic feet.
FINANCIAL & SUPPLEMENTAL DATA ENCLOSED IN THIS REPORT
-- Reconciliation of GAAP to Non-GAAP Measures
-- Summary Financial Information
-- Volumes and Prices
-- Oil and Gas Reserves
-- Costs Incurred and Capital Expenditures - Oil and Gas
Producing Activities
-- Hedging Position for 2005 & 2006
-- Guidance
EARNINGS CONFERENCE CALL TODAY, JAN. 28, AT 9:00 A.M. CST (10:00
A.M. EST)
Anadarko will host an analyst conference call today, Jan. 28, at
9:00 a.m. Central Standard Time (10:00 a.m. Eastern Standard Time) to
discuss fourth-quarter and full-year 2004 results. To actively
participate and ask questions during the conference call, please call
913-981-4900. The confirmation number is 950295.
Those who wish to listen only to the live audio web cast may do so
via the Internet at www.anadarko.com. The accompanying presentation
will also be available on the company's Web site. For complete
instructions on how to participate or to access the replay after the
call, visit our Web site at www.anadarko.com.
ANADARKO OPERATIONS REPORT
A comprehensive fourth-quarter 2004 operations report will be
posted today on the company's Web site: www.anadarko.com.
Anadarko Petroleum Corporation's mission is to deliver a
competitive and sustainable rate of return to shareholders by
developing, acquiring and exploring for oil and gas resources vital to
the world's health and welfare. As of year-end 2004, the company had
2.37 billion BOE of proved reserves, making it one of the world's
largest independent exploration and production companies. Anadarko's
operational focus extends from the deepwater Gulf of Mexico, up
through Texas, Louisiana, the Mid-Continent, western U.S. and Canadian
Rockies and onto the North Slope of Alaska. Anadarko also has
significant production in Algeria, Venezuela and Qatar, and
exploration or production positions in several other countries. For
more information about how Anadarko is bringing excellence to the
surface, please visit: www.anadarko.com.
(1) See accompanying table for a reconciliation of GAAP to
non-GAAP financial measures and statements indicating why management
believes the non-GAAP measures are useful information for investors.
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 its goals will be achieved. A number of
factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in
this release. While Anadarko makes these forward-looking statements in
good faith, neither Anadarko nor its management can guarantee that the
anticipated future results will be achieved. See Regulatory Matters
and Additional Factors Affecting Business in the Management's
Discussion and Analysis included in the company's 2003 Annual Report
on Form 10-K.
Anadarko Petroleum Corporation
Reconciliation of GAAP to Non-GAAP Measures
Below is a reconciliation of net income available to common
stockholders (GAAP) to net income available to common stockholders
before the effect of implementation costs of the company's refocused
strategy, certain litigation and other settlements, oil and gas
impairments, restructuring costs, Canadian tax rate change and change
in accounting principle, net of taxes, (non-GAAP) as required under
Regulation G of the Securities Exchange Act of 1934. The company uses
net income excluding the effect of these items to evaluate the
company's results for comparability between periods.
Quarter Ended Year Ended
December 31 December 31
--------------- ---------------
millions except per share amounts 2004 2003 2004 2003
- ----------------------------------------------------------------------
Net Income
- ----------------------------------------------------------------------
Net income available to common
stockholders $405 $294 $1,601 $1,287
Add back:
Implementation costs of refocused
strategy, net of taxes 11 - 90 -
Certain litigation and other
settlements, net of taxes 24 - 78 -
Impairments related to oil and gas
properties, net of taxes 63 9 72 93
Restructuring costs, net of taxes - 5 - 26
Canadian tax rate change (2) (46) (14) (46)
Change in accounting principle, net
of taxes - - - (47)
- ----------------------------------------------------------------------
Net income available to common
stockholders excluding
implementation costs of refocused
strategy, certain litigation and
other settlements, impairments,
restructuring costs, Canadian tax
rate change and change in
accounting principle $501 $262 $1,827 $1,313
- ----------------------------------------------------------------------
Per Common Share
- ----------------------------------------------------------------------
Net income available to common
stockholders - diluted $1.64 $1.17 $6.36 $5.09
Net income available to common
stockholders excluding implementation
costs of refocused strategy, certain
litigation and other settlements,
impairments, restructuring costs,
Canadian tax rate change and change
in accounting principle - diluted $2.04 $1.04 $7.26 $5.19
- ----------------------------------------------------------------------
Below is a reconciliation of cash provided by operating activities
(GAAP) to cash flow from operations before changes in assets and
liabilities (non-GAAP) as required under Regulation G of the
Securities Exchange Act of 1934. The company uses cash flow from
operations before changes in assets and liabilities to demonstrate the
company's ability to internally fund capital expenditures and to
service or incur additional debt. It is useful in comparisons of oil
and gas exploration and production companies because it excludes
fluctuations in assets and liabilities.
Quarter Ended Year Ended
December 31 December 31
--------------- ---------------
millions 2004 2003 2004 2003
- ----------------------------------------------------------------------
Cash Flow
- ----------------------------------------------------------------------
Cash flow from operating activities $456 $744 $3,213 $3,043
Add back:
Change in accounts receivable 7 (17) 239 (46)
Change in accounts payable and
accrued expenses 388 (24) (270) 68
Change in other items - net 174 25 293 99
- ----------------------------------------------------------------------
Cash flow from operations before
changes in assets and liabilities $1,025 $728 $3,475 $3,164
- ----------------------------------------------------------------------
Detail of Implementation Costs of Refocused Strategy
Quarter Ended Year Ended
December 31 December 31
--------------- ---------------
Before After Before After
millions Tax Tax Tax Tax
- ----------------------------------------------------------------------
Implementation costs of refocused
strategy
- ----------------------------------------------------------------------
Revenues - Hedge (gains) losses and
other gains related to properties
sold $(16) $(11) $14 $9
Costs and Expenses - Severance,
retention and other costs 2 1 29 19
Interest Expense - Debt repurchase
costs 41 26 104 67
Other (Income) Expense (8) (5) (8) (5)
Income Tax Expense - Current - 93 - 440
Income Tax Expense - Deferred - (93) - (440)
- ----------------------------------------------------------------------
Implementation costs of refocused
strategy $19 $11 $139 $90
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year Ended
Summary Financial Information Dec. 31 Dec. 31
-------------- ----------------
$ and shares in millions 2004 2003 2004 2003
- ----------------------------------------------------------------------
Revenues
- ----------------------------------------------------------------------
Gas sales $841 $686 $3,279 $2,851
Oil and condensate sales 576 450 2,219 1,787
Natural gas liquids sales 141 110 460 365
Other sales 44 32 109 119
- ----------------------------------------------------------------------
Total 1,602 1,278 6,067 5,122
- ----------------------------------------------------------------------
Costs and Expenses
- ----------------------------------------------------------------------
Direct operating 184 185 682 630
Transportation and cost of product 67 56 250 198
General and administrative 154 110 423 392
Depreciation, depletion and
amortization 355 343 1,447 1,297
Other taxes 60 78 312 294
Impairments related to oil and gas
properties 63 11 72 103
- ----------------------------------------------------------------------
Total 883 783 3,186 2,914
- ----------------------------------------------------------------------
Operating Income 719 495 2,881 2,208
- ----------------------------------------------------------------------
Interest Expense and Other (Income)
Expense
- ----------------------------------------------------------------------
Interest expense 92 66 352 253
Other (income) expense (20) 6 52 (19)
- ----------------------------------------------------------------------
Total 72 72 404 234
- ----------------------------------------------------------------------
Income Before Income Taxes 647 423 2,477 1,974
- ----------------------------------------------------------------------
Income Tax Expense 241 128 871 729
- ----------------------------------------------------------------------
Net Income Before Cumulative Effect of
Change in Accounting Principle $406 $295 $1,606 $1,245
- ----------------------------------------------------------------------
Preferred Stock Dividends 1 1 5 5
- ----------------------------------------------------------------------
Net Income Available to Common
Stockholders Before Cumulative
Effect of Change in Accounting
Principle $405 $294 $1,601 $1,240
- ----------------------------------------------------------------------
Cumulative Effect of Change in
Accounting Principle - - - 47
- ----------------------------------------------------------------------
Net Income Available to Common
Stockholders $405 $294 $1,601 $1,287
- ----------------------------------------------------------------------
Per Common Share
- ----------------------------------------------------------------------
Net income - before change in
accounting principle - basic $1.66 $1.18 $6.41 $4.97
Net income - before change in
accounting principle - diluted $1.64 $1.17 $6.36 $4.91
Change in accounting principle - basic $- $- $- $0.19
Change in accounting principle -
diluted $- $- $- $0.18
Net income - basic $1.66 $1.18 $6.41 $5.16
Net income - diluted $1.64 $1.17 $6.36 $5.09
- ----------------------------------------------------------------------
Average Number of Common Shares
Outstanding - Basic 244 250 250 250
- ----------------------------------------------------------------------
Average Number of Common Shares
Outstanding - Diluted 246 252 252 253
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year Ended
Summary Financial Information Dec. 31 Dec. 31
--------------- ------------------
$ in millions 2004 2003 2004 2003
- ---------------------------------------------------------------------
Cash Flow from Operating Activities
- ---------------------------------------------------------------------
Net income before cumulative effect
of change in accounting principle $406 $295 $1,606 $1,245
Depreciation, depletion and
amortization 355 343 1,447 1,297
Deferred income taxes 205 86 276 505
Impairments related to oil and gas
properties 63 11 72 103
Other noncash items (4) (7) 74 14
- ----------------------------------------------------------------------
1,025 728 3,475 3,164
(Increase) decrease in accounts
receivable (7) 17 (239) 46
Increase (decrease) in accounts
payable and accrued expenses (388) 24 270 (68)
Other items - net (174) (25) (293) (99)
- ---------------------------------------------------------------------
Net Cash Provided by Operating
Activities $456 $744 $3,213 $3,043
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Capital Expenditures
- ---------------------------------------------------------------------
Capital spending $770 $555 $2,830 $2,484
Capitalized interest 19 27 86 121
Capitalized overhead 47 45 174 187
- ---------------------------------------------------------------------
Total $836 $627 $3,090 $2,792
- ---------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2004 2004 2003
- ---------------------------------------------------------------------
Condensed Balance Sheet
- ---------------------------------------------------------------------
Cash and cash equivalents $874 $154 $62
Other current assets 1,529 1,516 1,262
Net properties and equipment 15,913 18,034 17,396
Other assets 468 440 437
Goodwill 1,309 1,395 1,389
- ---------------------------------------------------------------------
Total Assets $20,093 $21,539 $20,546
- ---------------------------------------------------------------------
Current liabilities $1,993 $2,794 $1,715
Long-term debt 3,671 4,120 5,058
Other long-term liabilities 5,144 5,180 5,174
Stockholders' equity 9,285 9,445 8,599
- ---------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity $20,093 $21,539 $20,546
- ---------------------------------------------------------------------
Capitalization
- ---------------------------------------------------------------------
Total debt $3,840 $4,484 $5,058
Stockholders' equity 9,285 9,445 8,599
- ---------------------------------------------------------------------
Total $13,125 $13,929 $13,657
- ---------------------------------------------------------------------
Capitalization Ratios
- ---------------------------------------------------------------------
Total debt 29% 32% 37%
Stockholders' equity 71% 68% 63%
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year Ended
Volumes and Prices Dec. 31 Dec. 31
--------------- ---------------
2004 2003 2004 2003
- ---------------------------------------------------------------------
Natural Gas
- ---------------------------------------------------------------------
United States
- ---------------------------------------------------------------------
Volumes, billion cubic feet 120 125 499 503
Average daily volumes, million cubic
feet per day 1,306 1,365 1,363 1,379
Price per thousand cubic feet $5.56 $4.19 $5.14 $4.36
- ---------------------------------------------------------------------
Canada
- ---------------------------------------------------------------------
Volumes, billion cubic feet 31 37 138 140
Average daily volumes, million cubic
feet per day 335 397 378 383
Price per thousand cubic feet $5.62 $4.37 $5.17 $4.71
- ---------------------------------------------------------------------
Total
- ---------------------------------------------------------------------
Volumes, billion cubic feet 151 162 637 643
Average daily volumes, million cubic
feet per day 1,641 1,762 1,741 1,762
Price per thousand cubic feet $5.58 $4.23 $5.15 $4.43
- ---------------------------------------------------------------------
Crude Oil and Condensate
- ---------------------------------------------------------------------
United States
- ---------------------------------------------------------------------
Volumes, million barrels 10 8 32 34
Average daily volumes, thousand
barrels per day 92 89 88 93
Price per barrel $34.48 $25.28 $31.87 $26.16
- ---------------------------------------------------------------------
Canada
- ---------------------------------------------------------------------
Volumes, million barrels 1 1 5 6
Average daily volumes, thousand
barrels per day 12 16 14 17
Price per barrel $43.45 $26.59 $37.37 $27.33
- ---------------------------------------------------------------------
Algeria
- ---------------------------------------------------------------------
Volumes, million barrels 4 5 22 19
Average daily volumes, thousand
barrels per day 49 52 61 52
Price per barrel $37.03 $29.53 $34.78 $28.43
- ---------------------------------------------------------------------
Other International
- ---------------------------------------------------------------------
Volumes, million barrels 2 3 8 8
Average daily volumes, thousand
barrels per day 24 29 22 22
Price per barrel $30.18 $23.58 $27.91 $23.15
- ---------------------------------------------------------------------
Total
- ---------------------------------------------------------------------
Volumes, million barrels 17 17 67 67
Average daily volumes, thousand
barrels per day 177 186 185 184
Price per barrel $35.22 $26.31 $32.76 $26.55
- ---------------------------------------------------------------------
Natural Gas Liquids
- ---------------------------------------------------------------------
Total
- ---------------------------------------------------------------------
Volumes, million barrels 4 5 17 17
Average daily volumes, thousand
barrels per day 46 56 45 47
Price per barrel $33.15 $21.36 $27.76 $21.18
- ---------------------------------------------------------------------
Total Barrels of Oil Equivalent (BOE)
- ---------------------------------------------------------------------
Volumes, million BOE 46 49 190 192
Average daily volumes, thousand BOE
per day 497 535 520 525
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Oil and Gas Reserves
Other
U.S. Canada Algeria Int'l Total
- ----------------------------------------------------------------------
Total (MMBOE)
- ----------------------------------------------------------------------
Proved Reserves
- ----------------------------------------------------------------------
December 31, 2003 1,704 314 361 134 2,513
Revisions of prior estimates (48) (10) 7 (8) (59)
Extensions, discoveries and
other additions 302 43 4 - 349
Improved recovery 42 (1) - - 41
Purchases in place 3 1 - - 4
Sales in place (226) (64) - - (290)
Production (131) (29) (22) (9) (191)
- ----------------------------------------------------------------------
December 31, 2004 1,646 254 350 117 2,367
- ----------------------------------------------------------------------
Proved Developed Reserves
- ----------------------------------------------------------------------
December 31, 2003 1,238 242 182 65 1,727
December 31, 2004 1,095 195 176 51 1,517
- ----------------------------------------------------------------------
Natural Gas (Bcf)
- ----------------------------------------------------------------------
Proved Reserves
- ----------------------------------------------------------------------
December 31, 2003 6,087 1,493 - 144 7,724
Revisions of prior estimates (276) (35) - 9 (302)
Extensions, discoveries and
other additions 1,414 227 - - 1,641
Improved recovery - (1) - - (1)
Purchases in place 10 3 - - 13
Sales in place (643) (267) - - (910)
Production (499) (138) - - (637)
- ----------------------------------------------------------------------
December 31, 2004 6,093 1,282 - 153 7,528
- ----------------------------------------------------------------------
Proved Developed Reserves
- ----------------------------------------------------------------------
December 31, 2003 4,725 1,164 - - 5,889
December 31, 2004 4,469 997 - - 5,466
- ----------------------------------------------------------------------
Oil, Condensate and NGLs
(MMBbls)
- ----------------------------------------------------------------------
Proved Reserves
- ----------------------------------------------------------------------
December 31, 2003 691 65 361 109 1,226
Revisions of prior estimates (2)(4) 7 (9) (8)
Extensions, discoveries and
other additions 67 5 4 - 76
Improved recovery 42 (1) - - 41
Purchases in place 1 - - - 1
Sales in place (119) (19) - - (138)
Production (48) (6) (22) (9) (85)
- ----------------------------------------------------------------------
December 31, 2004 632 40 350 91 1,113
- ----------------------------------------------------------------------
Proved Developed Reserves
- ----------------------------------------------------------------------
December 31, 2003 451 48 182 65 746
December 31, 2004 350 29 176 51 606
- ----------------------------------------------------------------------
Anadarko Petroleum Corporation
Costs Incurred and Capital Expenditures - Oil and Gas Producing
Activities
millions 2004
- ---------------------------------------------------------------------
United States
Property acquisition
Exploration $123
Development (1)
Exploration 339
Development 1,809
- ---------------------------------------------------------------------
Total United States - Costs Incurred 2,270
- ---------------------------------------------------------------------
Less: Asset retirement costs (46)
Plus: Asset retirement expenditures 24
- ---------------------------------------------------------------------
Total United States - Oil & Gas Capital Expenditures 2,248
- ---------------------------------------------------------------------
Canada
Property acquisition
Exploration 20
Development 4
Exploration 126
Development 429
- ---------------------------------------------------------------------
Total Canada - Costs Incurred 579
- ---------------------------------------------------------------------
Less: Asset retirement costs (5)
Plus: Asset retirement expenditures 2
- ---------------------------------------------------------------------
Total Canada - Oil & Gas Capital Expenditures 576
- ---------------------------------------------------------------------
Algeria
Exploration 20
Development 40
- ---------------------------------------------------------------------
Total Algeria - Costs Incurred 60
- ---------------------------------------------------------------------
Less: Asset retirement costs (1)
Plus: Asset retirement expenditures -
- ---------------------------------------------------------------------
Total Algeria - Oil & Gas Capital Expenditures 59
- ---------------------------------------------------------------------
Other International
Property acquisition
Exploration 12
Exploration 28
Development 70
- ---------------------------------------------------------------------
Total Other International - Costs Incurred 110
- ---------------------------------------------------------------------
Less: Asset retirement costs -
Plus: Asset retirement expenditures -
- ---------------------------------------------------------------------
Total Other International - Oil & Gas Capital Expenditures 110
- ---------------------------------------------------------------------
Total
Property acquisition
Exploration 155
Development 3
Exploration 513
Development 2,348
- ---------------------------------------------------------------------
Total - Costs Incurred 3,019
- ---------------------------------------------------------------------
Less: Asset retirement costs (52)
Plus: Asset retirement expenditures 26
- ---------------------------------------------------------------------
Total - Oil & Gas Capital Expenditures $2,993
- ---------------------------------------------------------------------
Anadarko Petroleum Corporation
Hedge Position for 2005 & 2006
As of December 31, 2004
2- Way Collars 3- Way Collars
------------------------ ---------------------------------
Natural Sold Purchased
Gas Volume Floor Ceiling Volume Floor Floor Ceiling
MMMBtu/d $/MMBtu $/MMBtu MMMBtu/d $/MMBtu $/MMBtu $/MMBtu
------------------------ ---------------------------------
United
States
1st Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
2nd Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
3rd Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
4th Qtr
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
------------------------ ---------------------------------
Total Year
2005 26.3 $3.76 $5.65 268.8 $4.01 $5.00 $9.37
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2006 10.0 $4.00 $5.88 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
There are no Fixed Price hedges for the United States.
Fixed and
Physical
Contracts
----------------
NYMEX
Volume Price
MMMBtu/d $/MMBtu
----------------
Canada
1st Qtr
2005 21.7 $2.98
2nd Qtr
2005 21.7 $2.98
3rd Qtr
2005 21.7 $2.98
4th Qtr
2005 18.0 $2.95
----------------
Total Year
2005 20.8 $2.97
----------------
----------------
Total Year
2006 10.9 $2.87
----------------
----------------
There are no Collar hedges for Canada.
- ----------------------------------------------------------------------
------------------------ ---------------------------------
Crude Oil 2- Way Collars 3- Way Collars
------------------------ ---------------------------------
Sold Purchased
Volume Floor Ceiling Volume Floor Floor Ceiling
Bbl/day $/Bbl $/Bbl Bbl/day $/Bbl $/Bbl $/Bbl
------------------------ ---------------------------------
United
States
1st Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
2nd Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
3rd Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
4th Qtr
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
------------------------ ---------------------------------
Total Year
2005 1,986 $22.00 $26.32 43,000 $27.28 $32.28 $46.89
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2006 822 $22.00 $26.32 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
There are no crude oil hedges for production outside of the United
States.
Anadarko Petroleum Corporation
As of January 28, 2005
1st Quarter Total Year
Financial and Operating 2005 Forecast 2005 Forecast
Guidance
-------------------- --------------------
Units Units
-------------------- --------------------
Total Sales (MM BOE) 38 - 40 159 - 164
Crude Oil (MBbl/d): 155 - 175 164 - 174
United States 66 - 68 74 - 77
Canada 6 - 7 5 - 6
Algeria 65 - 75 58 - 63
Other International 20 - 24 25 - 29
Natural Gas (MMcf/d): 1,420 - 1,450 1,460 - 1,500
United States 1,140 - 1,170 1,175 - 1,210
Canada 270 - 290 275 - 300
Natural Gas Liquids (MBbl/d): 29 - 33 28 - 31
United States 27 - 30 26 - 28
Canada 2 - 3 2 - 3
- ----------------------------------------------------------------------
$/ Unit $/ Unit
-------------------- --------------------
Price Differentials vs NYMEX
(w/o hedges)
Crude Oil ($/Bbl): (4.45) - (6.50) (4.40) - (6.00)
United States (3.55) - (5.00) (3.25) - (4.50)
Canada (11.00) - (13.00) (11.00) - (13.00)
Algeria (2.00) - (4.50) (2.00) - (4.00)
Other International (13.00) - (19.00) (11.50) - (18.00)
Natural Gas ($/Mcf): (0.40) - (0.85) (0.35) - (0.75)
United States (0.35) - (0.90) (0.30) - (0.75)
Canada (0.55) - (0.80) (0.50) - (0.75)
- ----------------------------------------------------------------------
$MM $MM
-------------------- --------------------
Other Revenues:
Marketing 15 - 18 50 - 70
Minerals and Other 9 - 11 30 - 40
- ----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
-------------------- --------------------
Direct Operating 3.10 - 3.30 3.05 - 3.35
Transportation and Cost of
Product 1.45 - 1.60 1.40 - 1.55
Depreciation, Depletion and
Amortization 7.40 - 7.65 7.35 - 7.60
Production Taxes (% of
Revenue) 5.5% - 6.0% 5.6% - 5.8%
$MM $MM
-------------------- --------------------
General and Administrative 95 - 105 380 - 410
Impairments Related to Oil
and Gas Properties - - 20 - - 40
Interest Expense 50 - 52 190 - 210
Other (Income) Expense (5) - 5 - - 10
Federal Tax Rate 35% - 37% 35% - 36%
Deferred Taxes (% of Total
Taxes) 40% - 45% 40% - 45%
- ----------------------------------------------------------------------
Avg. Shares Outstanding (MM)
Basic 235 - 237 234 - 236
Diluted 237 - 239 236 - 238
$MM $MM
-------------------- --------------------
Capital Investment 750 - 800 2,700 - 3,000
Capital Projects 692 - 736 2,465 - 2,745
Capitalized Direct Expenses 42 - 46 170 - 180
Capitalized Interest 16 - 18 65 - 75
CONTACT: Anadarko Petroleum Corporation, Houston
Media Contacts:
Teresa Wong, 832-636-1203
teresa_wong@anadarko.com
or
Lee Warren, 832-636-3321
lee_warren@anadarko.com
or
Investor Contacts:
David Larson, 832-636-3265
david_larson@anadarko.com
or
Stewart Lawrence, 832-636-3326
stewart_lawrence@anadarko.com