Exhibit 99.2
Anadarko Announces 2006 Budget
HOUSTON--(BUSINESS WIRE)--February 6, 2006--Anadarko Petroleum Corporation
(NYSE:APC) today announced a 2006 capital budget of approximately $4 billion.
The program is expected to deliver 4 to 8 percent production volume growth
in 2006, or 165 million to 171 million barrels of oil equivalent (BOE), over
2005 volumes of 158 million BOE. It also includes substantial investments in
exploration and development activities expected to sustain volume growth beyond
2006. Anadarko expects to more than replace annual production for the 25th
consecutive year.
"Anadarko's exploration-oriented program is designed to deliver
differentiating volume growth over time," said Jim Hackett, Anadarko Chairman,
President and CEO. "We will continue to invest substantial capital in 2006 to
gradually bring major existing discoveries on line through 2008, while also
investing about a fifth of our budget in exploration programs. Although project
delays experienced due to unusual weather patterns and mechanical issues in the
Gulf of Mexico have deferred a small portion of the full-year volume growth
targeted for 2006, daily production volumes are expected to increase 15 to 20
percent from January through December 2006. As a result, we will be positioned
to grow more than 9 percent in 2007."
Approximately 70 percent of the total budget is planned for development
activities, 20 percent will go to exploration and the remainder is set aside for
capitalized interest, overhead and other items.
2006 CAPITAL BUDGET BY AREA
U.S. Onshore 51%
Deepwater GOM 23%
Canada 11%
International 7%
Capitalized Items and Other 8%
The largest single portion of the 2006 budget will focus on Anadarko's
continued success in unconventional tight gas plays onshore North America,
primarily in North Louisiana, West Texas, East Texas and Alberta, Canada.
In the Gulf of Mexico, two focus areas will combine to represent about
one-fifth of total spending. Eastern Gulf of Mexico activity will require more
than 10 percent of the budget to install facilities that will link seven
Anadarko-operated natural gas discoveries with the Independence Hub development
project, which is expected to start up in the second half of 2007. Another 10
percent of the budget is dedicated to the foldbelt area, where Anadarko expects
to bring six incremental high-volume wells on line at the K2, K2 North and
Genghis Khan discoveries through the Marco Polo hub facility, in addition to
participation in 7 to 9 exploration and delineation wells targeting similar
Miocene objectives.
Outside North America, the largest area of budgeted expenditures is
Algeria, where the company expects to make significant progress on the
development of Block 208 discoveries, with new production facilities scheduled
to come on-line in 2008.
The international program also includes exploration activity in Algeria,
Qatar, Indonesia, Tunisia and West Africa, as well as activities within other
potential new venture areas.
"Nearly 60 percent of the 2006 budget is targeting projects that are
expected to provide little or no volume growth this year but should contribute
to strong growth in 2007 and beyond," Hackett said. "Much of the spending is on
major development projects where production is gradually escalating through
2008, and on long-term exploration efforts that, again, target future reserves
and production growth. We are confident that shareholders will recognize the
value as we execute on the strategy."
DETAILED FINANCIAL INFORMATION ON 2006 GUIDANCE FOLLOWS
CONFERENCE CALL TOMORROW AT 9 A.M. CST, 10 A.M. EST
Anadarko will host a conference call on Tuesday, Feb. 7, at 9 a.m. Central
Standard Time (10 a.m. Eastern Standard Time) to discuss 2005 results and the
company's outlook for 2006. The dial-in number is 913-981-4900, and the
confirmation number is 3986947. For complete instructions on how to actively
participate in the conference call, or to listen to the live audio webcast or a
replay, please refer to www.anadarko.com.
Anadarko Petroleum Corporation's mission is to deliver a competitive and
sustainable rate of return to shareholders by exploring for, acquiring and
developing oil and natural gas resources vital to the world's health and
welfare. As of year-end 2005, the company had 2.45 billion barrels-equivalent of
proved reserves, making it one of the world's largest independent exploration
and production companies. Anadarko's operational focus in North America extends
from the deepwater Gulf of Mexico, up through the western U.S. and Canadian
regions and onto the North Slope of Alaska. Anadarko's international activities
are focused on its major positions in North Africa, the Middle East, Indonesia
and exploration or production operations in several other countries. For more
information about how Anadarko is bringing excellence to the surface, please
visit: www.anadarko.com.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Anadarko believes that its expectations are based on
reasonable assumptions. No assurance, however, can be given that such
expectations will prove to have been correct. A number of factors could cause
actual results to differ materially from the projections, anticipated results or
other expectations expressed in this news release. See "Regulatory Matters and
Additional Factors Affecting Business" in the Management's Discussion and
Analysis (MD&A) included in the company's 2004 Annual Report on Form 10-K and
other public filings, press releases and discussions with company management.
Anadarko undertakes no obligation to publicly update or revise any
forward-looking statements.
Anadarko Petroleum Corporation
Financial and Operating Guidance
As of February 6, 2006
1st Quarter Total Year
2006 Forecast 2006 Forecast
-------------------- --------------------
Units Units
-------------------- --------------------
Total Sales (MM BOE) 38 - 40 165 - 171
Crude Oil (MBbl/d): 157 - 167 180 - 192
United States 72 - 74 91 - 94
Canada 5 - 6 6 - 7
Algeria 60 - 68 62 - 70
Other International 19 - 21 20 - 23
Natural Gas (MMcf/d): 1,325 - 1,360 1,390 - 1,450
United States 1,050 - 1,075 1,115 - 1,150
Canada 270 - 290 275 - 300
Natural Gas Liquids
(MBbl/d): 33 - 36 36 - 39
United States 31 - 33 34 - 36
Canada 2 - 3 2 - 3
- ----------------------------------------------------------------------
$/ Unit $/ Unit
-------------------- --------------------
Price Differentials vs NYMEX
(w/o hedges)
Crude Oil ($/Bbl): (5.00) - (7.00) (5.50) - (7.00)
United States (4.50) - (6.00) (5.50) - (6.50)
Canada (7.50) - (9.50) (7.00) - (9.00)
Algeria (2.50) - (4.50) (2.50) - (4.50)
Other International (16.00) - (20.00) (15.50) - (19.50)
Natural Gas ($/Mcf): (0.70) - (2.00) (0.50) - (1.50)
United States (0.75) - (2.00) (0.50) - (1.50)
Canada (0.70) - (2.00) (0.50) - (1.50)
- ----------------------------------------------------------------------
$MM $MM
-------------------- --------------------
Other Revenues:
Marketing 50 - 60 100 - 130
Minerals and Other 15 - 20 60 - 70
- ----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
-------------------- --------------------
Direct Operating 3.60 - 4.00 3.75 - 4.05
Transportation and Cost of
Product 1.90 - 2.05 1.80 - 2.00
Depreciation, Depletion and
Amortization 8.70 - 8.85 8.90 - 9.20
Production Taxes (% of
Revenue) 5.7% - 6.2% 5.7% - 6.2%
$MM $MM
-------------------- --------------------
General and Administrative 115 - 125 465 - 495
Impairments Related to Oil
and Gas Properties - - 20 - - 100
Interest Expense 50 - 52 195 - 205
Other (Income) Expense (5) - 5 (10) - 10
Federal Tax Rate 34% - 36% 34% - 36%
Deferred Taxes (% of Total
Taxes) 30% - 40% 35% - 40%
- ----------------------------------------------------------------------
Avg. Shares Outstanding
(MM) (a)
Basic 229 - 231 230 - 232
Diluted 231 - 233 232 - 234
$MM $MM
-------------------- --------------------
Capital Investment 1,050 - 1,150 3,800 - 4,100
Capital Projects 985 - 1,075 3,530 - 3,815
Capitalized Direct Expenses 50 - 55 210 - 220
Capitalized Interest 15 - 20 60 - 65
(a) Does not include effects of the proposed two-for-one stock split.
Anadarko Petroleum Corporation
Commodity Hedge Position
As of December 31, 2005
- ----------------------------------------------------------------------
Natural Gas
------------------------ ---------------------------------
2-Way Collars 3-Way Collars
------------------------ ---------------------------------
Sold Purchased
United Volume Floor Ceiling Volume Floor Floor Ceiling
States MMMBtu/d $/MMBtu $/MMBtu MMMBtu/d $/MMBtu $/MMBtu $/MMBtu
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2006 10.0 $4.00 $5.88 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2007 6.0 $4.00 $6.02 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
----------------
Fixed and
Physical
Contracts
----------------
NYMEX
Volume Price
Canada MMMBtu/d $/MMBtu
----------------
----------------
Total Year
2006 10.9 $2.87
----------------
----------------
Total Year
2007 4.5 $2.83
----------------
----------------
The underlier for all prices is Nymex Henry Hub
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Crude Oil
------------------------ ---------------------------------
2-Way Collars 3-Way Collars
------------------------ ---------------------------------
Sold Purchased
United Volume Floor Ceiling Volume Floor Floor Ceiling
States Bbl/day $/Bbl $/Bbl Bbl/day $/Bbl $/Bbl $/Bbl
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2006 822 $22.00 $26.32 - $- $- $-
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2007 542 $22.00 $26.32 7,000 $35.00 $50.00 $88.08
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2008 - $- $- 7,000 $35.00 $50.00 $86.26
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2009 - $- $- 5,000 $35.00 $50.00 $85.58
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2010 - $- $- 6,000 $35.00 $50.00 $85.65
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2011 - $- $- 3,000 $35.00 $50.00 $86.00
------------------------ ---------------------------------
Algeria
------------------------ ---------------------------------
Total Year
2008 - $- $- 7,000 $33.54 $48.54 $83.83
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2009 - $- $- 7,000 $33.54 $48.54 $83.53
------------------------ ---------------------------------
------------------------ ---------------------------------
Total Year
2010 - $- $- 3,000 $33.75 $48.78 $84.20
------------------------ ---------------------------------
------------------------ ---------------------------------
The underlier for United States prices is Nymex WTI Cushing. The
underlier for Algerian prices is Brent Dated.
CONTACT: Anadarko Petroleum Corporation, Houston
Media Contact:
Teresa Wong, 832-636-1203
teresa_wong@anadarko.com
or
Investor Contacts:
Stewart Lawrence, 832-636-3326
stewart_lawrence@anadarko.com
or
John Colglazier, 832-636-2306
john_colglazier@anadarko.com