Anadarko Announces Third Quarter 2004 Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Anadarko Petroleum Corporation Anadarko Petroleum Corporation (NYSE: APC) is one of the world’s largest independent oil and gas exploration and production companies, with 2.37 billion barrels of oil equivalent (BOE) of proved reserves and a production of 190 million BOE in 2004. Ranked No. (NYSE NYSE See: New York Stock Exchange :APC (1) (American Power Conversion Corporation, West Kingston, RI, www.apcc.com) The leading manufacturer of UPS systems and surge suppressors, founded in 1981 by Rodger Dowdell, Neil Rasmussen and Emanual Landsman, three electronic power engineers who had worked at MIT. ): --EARNINGS AND CASH FLOW STRONG --DIVESTITURES OF NON-CORE ASSETS EXCEED TARGETS --$1.2 BILLION OF DEBT REPURCHASES COMPLETED --9 MILLION COMMON SHARES REPURCHASED Anadarko Petroleum Corporation (NYSE:APC) today announced third quarter 2004 net income available to common shareholders of $399 million, or $1.58 per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ). Net income includes costs associated with the implementation of its refocused strategy, primarily the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of debt and the sale of non-core properties, which amounted to $74 million, or $0.29 per share (diluted). For the same period in 2003, net income was $274 million, or $1.09 per share (diluted). Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2004 net income is $1.2 billion, or $4.72 per share (diluted). Cash flow from operating activities totaled $992 million in the third quarter 2004, compared to $884 million for the third quarter 2003. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses before changes in assets and liabilities for the third quarter 2004 totaled $617 million, which includes a reduction of $347 million for current taxes related to the divestitures. This compares to $868 million for the third quarter 2003.(1) Year-to-date 2004 cash flow from operating activities totaled $2.76 billion. "Anadarko is rapidly executing the strategy we announced in June June: see month. , divesting non-core properties and refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus the company to deliver sustainable, profitable growth," said Jim Hackett Hackett may refer to: In places:
Consistent with its strategy announced in June, Anadarko has agreements in place to sell approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.5 billion of assets and has additional agreements pending on about $800 million of assets. Together, these divestitures represent year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2003 proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. of approximately 285 million barrels of oil equivalent (BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip ) and production of about 120,000 BOE per day. Net income was not directly affected by the sales, as proceeds were recognized as an adjustment of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs under full-cost accounting rules. In September September: see month. , the company repurchased $750 million aggregate principal amount of debt securities, which resulted in $63 million associated with premiums and other costs recorded to interest expense in the third quarter. The company's $1.2 billion cash tender offer was completed in early October October: see month. with the repurchase of another $455 million of debt securities. The company anticipates costs associated with this repurchase to be about $40 million, which will be recorded in the fourth quarter. Total debt at the end of the quarter has been reduced by about $575 million since the first of the year. Since initiating a $2 billion stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program in June, the company has repurchased 9 million outstanding common shares at a cost of approximately $550 million to date. VOLUMES AND PRICES During the third quarter 2004, sales volumes totaled 49 million BOE, or 534,000 BOE per day, up more than 4 percent from the second quarter due to the start-up Start-up The earliest stage of a new business venture. of Anadarko's Marco Polo Marco Polo: see Polo, Marco. field in the deepwater Deepwater or Deep Water may refer to:
Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , continued drilling success in East Texas and North Louisiana North Louisiana, also known as Sportsman's Paradise, is a region in the U.S. state of Louisiana. The region has two metropolitan areas: Monroe and Shreveport-Bossier City. tight gas plays and the timing of sales in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. . However, sales volumes were down relative to the prior-year third quarter due primarily to high natural decline rates on properties that are currently being divested. Third quarter 2004 volumes also were reduced an estimated 200,000 BOE by hurricane-related shut-downs in the Gulf of Mexico. Third quarter 2003 sales volumes were 50 million BOE, or 541,000 BOE per day. The company's average realized oil price in the third quarter 2004 was $34.42 per barrel barrel: see English units of measurement. , up 31 percent from the 2003 third quarter price of $26.36 per barrel. Anadarko's average realized natural gas price was $4.93 per thousand cubic feet (Mcf), up 9 percent from the $4.51 per Mcf received in the same period in 2003. Realized prices include the effect of hedges, including approximately $30 million of hedge losses related to properties being sold. "Strong prices continue to give us the necessary cash flow to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our capital programs, strengthen the balance sheet, and return value directly to shareholders through our regular dividend program and stock repurchases," Hackett said. "Our strategic realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. is proceeding ahead of plan, and our core assets -- our foundation and growth platforms This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. -- are creating value for the future. For example, our foundation assets in Anadarko's North Louisiana Vernon field Vernon Field is a fictional character in the Batman maxi-series . History Vernon appears to be meek and unassuming. In reality, however, he is cunning and extremely corrupt, a tool of Gotham City's gangsters. and our Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Wild River play in Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. continue to set record production levels. We brought the Marco Polo field in the Gulf of Mexico on-line this quarter. And we've we've Contraction of we have. we've have also positioned ourselves well with a new growth opportunity through our planned LNG LNG (liquefied natural gas): see under natural gas. terminal in Nova Scotia Nova Scotia (nō`və skō`shə) [Lat.,=new Scotland], province (2001 pop. 908,007), 21,425 sq mi (55,491 sq km), E Canada. Geography where we held a ceremonial ground breaking yesterday and expect to have the facility on-line in late 2007." GUIDANCE The attached guidance for the fourth quarter and full year reflects the impact of asset sales, with adjustments based on anticipated closing dates. The adjustments result in lowered sales volume guidance. Absent the divestitures, estimated volumes would have been toward the higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of previous guidance. EARNINGS CONFERENCE CALL TODAY AT 9:30 A.M. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , 10:30 A.M. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT Anadarko will host an earnings conference call today at 9:30 a.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time (10:30 a.m. Eastern Daylight Time) to discuss third quarter 2004 results and the company's outlook for the remainder of the year. The dial-in number is 913-981-4910, and the confirmation number is 799234. 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 OPERATIONS REPORT For more details on Anadarko's operations, please refer to the comprehensive report on third quarter activity. The report will be available today at www.anadarko.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page. FINANCIAL DATA Several pages of information on the following topics are attached. --Reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to Non-GAAP Measures --Summary financial information --Volumes and prices --Hedge position as of Oct. 22, 2004 --Financial and operating guidance 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 2003, the company had 2.5 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 Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , the Mid-Continent, western U.S. and
Canadian Rockies The Canadian Rockies comprise the Canadian segment of the North American Rocky Mountains range. The southern end in Alberta and British Columbia borders Idaho and Montana of the USA. The northern end is at the Liard Plain in British Columbia. and onto the North Slope North Slope, Alaska: see Alaska North Slope. of Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States . Anadarko also has
significant production in Algeria, Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. and Qatar Qatar or Katar (both: kŭ`tər, gŭ–, kətär`), officially State of Qatar, independent emirate (2005 est. pop. 863,000), c. , 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 ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables for a reconciliation of GAAP to non-GAAP financial measures and statements indicating why management believes these non-GAAP measures are useful information for investors. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. Matters and Additional Factors Affecting Business in the Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial included in the company's 2003 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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, oil and gas impairments and restructuring costs, 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 implementation costs of the company's refocused strategy, oil and
gas impairments and restructuring costs to evaluate the company's
results for comparability between periods.
Quarter Ended
September 30
--------------------
millions except per share amounts 2004 2003
----------------------------------------------------------------------
Net Income
----------------------------------------------------------------------
Net income available to common stockholders $399 $274
Add back:
Implementation costs of refocused strategy,
net of taxes 74 -
Impairments related to oil and gas properties,
net of taxes - 72
Restructuring costs, net of taxes - 21
----------------------------------------------------------------------
Net income available to common stockholders
excluding implementation costs of refocused
strategy, impairments and restructuring costs $473 $367
----------------------------------------------------------------------
Per Common Share
----------------------------------------------------------------------
Net income available to common stockholders -
diluted $1.58 $1.09
Net income available to common stockholders
excluding implementation costs of refocused
strategy, impairments and restructuring
costs - diluted $1.87 $1.46
----------------------------------------------------------------------
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
September 30
--------------------
millions 2004 2003
----------------------------------------------------------------------
Cash Flow
----------------------------------------------------------------------
Cash flow from operating activities $992 $884
Add back:
Change in accounts receivable 74 (93)
Change in accounts payable and accrued
expenses (500) 88
Change in other items - net 51 (11)
----------------------------------------------------------------------
Cash flow from operations before changes in
assets and liabilities $617 $868
----------------------------------------------------------------------
Detail of Implementation Costs of Refocused Strategy
Quarter Ended
September 30, 2004
--------------------
millions Before Tax After Tax
----------------------------------------------------------------------
Implementation costs of refocused strategy
----------------------------------------------------------------------
Revenues - Hedge losses related to properties
being sold $30 $20
Costs and Expenses - Severance, retention and
other costs 21 13
Interest Expense - Debt repurchase costs 63 41
Income Tax Expenses - Current - 347
Income Tax Expenses - Deferred - (347)
----------------------------------------------------------------------
Implementation costs of refocused strategy $114 $74
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
------------- ---------------
$ and shares in millions 2004 2003 2004 2003
----------------------------------------------------------------------
Revenues
----------------------------------------------------------------------
Gas sales $823 $762 $2,438 $2,165
Oil and condensate sales 589 458 1,643 1,337
Natural gas liquids sales 123 85 319 255
Other sales 27 35 65 87
----------------------------------------------------------------------
Total 1,562 1,340 4,465 3,844
----------------------------------------------------------------------
Costs and Expenses
----------------------------------------------------------------------
Direct operating 177 158 498 445
Transportation and cost of product 67 49 183 142
Administrative and general 98 108 269 282
Depreciation, depletion and amortization 387 341 1,092 954
Other taxes 86 70 252 216
Impairments related to oil and gas
properties - 74 9 92
----------------------------------------------------------------------
Total 815 800 2,303 2,131
----------------------------------------------------------------------
Operating Income 747 540 2,162 1,713
----------------------------------------------------------------------
Interest Expense and Other (Income)
Expense
----------------------------------------------------------------------
Interest expense 131 59 260 187
Other (income) expense 16 2 72 (25)
----------------------------------------------------------------------
Total 147 61 332 162
----------------------------------------------------------------------
Income before Income Taxes 600 479 1,830 1,551
----------------------------------------------------------------------
Income Tax Expense 199 203 630 601
----------------------------------------------------------------------
Net Income Before Cumulative Effect of
Change in Accounting Principle $401 $276 $1,200 $950
----------------------------------------------------------------------
Preferred Stock Dividends 2 2 4 4
----------------------------------------------------------------------
Net Income Available to Common
Stockholders Before Cumulative Effect of
Change in Accounting Principle $399 $274 $1,196 $946
----------------------------------------------------------------------
Cumulative Effect of Change in Accounting
Principle - - - 47
----------------------------------------------------------------------
Net Income Available to Common
Stockholders $399 $274 $1,196 $993
----------------------------------------------------------------------
Per Common Share
----------------------------------------------------------------------
Net income - before change in accounting
principle - basic $1.59 $1.09 $4.76 $3.79
Net income - before change in accounting
principle - diluted $1.58 $1.09 $4.72 $3.74
Change in accounting principle - basic $- $- $- $0.19
Change in accounting principle - diluted $- $- $- $0.18
Net income - basic $1.59 $1.09 $4.76 $3.98
Net income - diluted $1.58 $1.09 $4.72 $3.92
----------------------------------------------------------------------
Average Number of Common Shares
Outstanding - Basic 250 250 252 249
----------------------------------------------------------------------
Average Number of Common Shares
Outstanding - Diluted 253 251 254 254
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Summary Financial Information September 30 September 30
------------------- ------------------
$ in millions 2004 2003 2004 2003
----------------------------------------------------------------------
Cash Flow from Operating
Activities
----------------------------------------------------------------------
Net income before cumulative
effect of change in accounting
principle $401 $276 $1,200 $950
Depreciation, depletion and
amortization 387 341 1,092 954
Deferred income taxes (177) 156 71 419
Impairments related to oil and
gas properties - 74 9 92
Other noncash items 6 21 78 21
----------------------------------------------------------------------
617 868 2,450 2,436
(Increase) decrease in accounts
receivable (74) 93 (232) 29
Increase (decrease) in accounts
payable and accrued expenses 500 (88) 658 (92)
Other items - net (51) 11 (119) (74)
----------------------------------------------------------------------
Net Cash Provided by Operating
Activities $992 $884 $2,757 $2,299
----------------------------------------------------------------------
----------------------------------------------------------------------
Capital Expenditures
----------------------------------------------------------------------
Capital spending $710 $566 $2,060 $1,929
Capitalized interest 20 30 67 94
Capitalized overhead 41 45 127 142
----------------------------------------------------------------------
Total $771 $641 $2,254 $2,165
----------------------------------------------------------------------
Sept. 30, June 30, Dec. 31,
2004 2004 2003
----------------------------------------------------------------------
Condensed Balance Sheet
----------------------------------------------------------------------
Cash and cash equivalents $154 $309 $62
Other current assets 1,516 1,407 1,262
Net properties and equipment 18,034 18,066 17,396
Other assets 440 443 437
Goodwill 1,395 1,378 1,389
----------------------------------------------------------------------
Total Assets $21,539 $21,603 $20,546
----------------------------------------------------------------------
Current liabilities $2,794 $2,044 $1,715
Long-term debt 4,120 4,895 5,058
Other long-term liabilities 5,180 5,513 5,174
Stockholders' equity 9,445 9,151 8,599
----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $21,539 $21,603 $20,546
----------------------------------------------------------------------
Capitalization
----------------------------------------------------------------------
Total debt $4,484 $5,063 $5,058
Stockholders' equity 9,445 9,151 8,599
----------------------------------------------------------------------
Total $13,929 $14,214 $13,657
----------------------------------------------------------------------
Capitalization Ratios
----------------------------------------------------------------------
Total debt 32% 36% 37%
Stockholders' equity 68% 64% 63%
----------------------------------------------------------------------
Anadarko Petroleum Corporation
Quarter Ended Year to Date
Volumes and Prices September 30 September 30
--------------- ---------------
2004 2003 2004 2003
---------------------------------------------------------------------
Natural Gas
---------------------------------------------------------------------
United States
---------------------------------------------------------------------
Volumes, billion cubic feet 132 136 378 378
Average daily volumes, million cubic
feet per day 1,428 1,481 1,382 1,383
Price per thousand cubic feet $4.96 $4.48 $5.01 $4.41
---------------------------------------------------------------------
Canada
---------------------------------------------------------------------
Volumes, billion cubic feet 35 33 108 103
Average daily volumes, million cubic
feet per day 385 357 392 379
Price per thousand cubic feet $4.81 $4.65 $5.03 $4.83
---------------------------------------------------------------------
Total
---------------------------------------------------------------------
Volumes, billion cubic feet 167 169 486 481
Average daily volumes, million cubic
feet per day 1,813 1,838 1,774 1,762
Price per thousand cubic feet $4.93 $4.51 $5.01 $4.50
---------------------------------------------------------------------
Crude Oil and Condensate
---------------------------------------------------------------------
United States
---------------------------------------------------------------------
Volumes, million barrels 8 8 24 26
Average daily volumes, thousand
barrels per day 92 97 88 96
Price per barrel $31.83 $26.34 $30.94 $26.45
---------------------------------------------------------------------
Canada
---------------------------------------------------------------------
Volumes, million barrels 1 2 4 5
Average daily volumes, thousand
barrels per day 14 17 14 17
Price per barrel $38.86 $26.43 $35.63 $27.56
---------------------------------------------------------------------
Algeria
---------------------------------------------------------------------
Volumes, million barrels 6 5 18 14
Average daily volumes, thousand
barrels per day 63 51 64 52
Price per barrel $38.37 $27.66 $34.21 $28.06
---------------------------------------------------------------------
Other International
---------------------------------------------------------------------
Volumes, million barrels 2 2 6 5
Average daily volumes, thousand
barrels per day 17 24 21 19
Price per barrel $30.20 $23.68 $27.06 $22.94
---------------------------------------------------------------------
Total
---------------------------------------------------------------------
Volumes, million barrels 17 17 52 50
Average daily volumes, thousand
barrels per day 186 189 187 184
Price per barrel $34.42 $26.36 $31.98 $26.64
---------------------------------------------------------------------
Natural Gas Liquids
---------------------------------------------------------------------
Total
---------------------------------------------------------------------
Volumes, million barrels 4 4 12 12
Average daily volumes, thousand
barrels per day 46 46 45 44
Price per barrel $29.16 $20.36 $25.90 $21.10
---------------------------------------------------------------------
Total Barrels of Oil Equivalent (BOE)
---------------------------------------------------------------------
Volumes, million BOE 49 50 145 142
Average daily volumes, thousand BOE
per day 534 541 528 522
---------------------------------------------------------------------
Anadarko Petroleum Corporation
Crude Oil Hedge Position for 2004 & 2005
As of October 22, 2004
Fixed and Physical Contracts 2- Way Collars
Volume NYMEX Price Volume Floor Ceiling
Crude Oil Bbl/day $/Bbl Bbl/day $/Bbl $/Bbl
United States
---------------------------- --------------------------
4th Qtr 2004 26,000 $27.22 3,260 $22.00 $26.32
============================ ==========================
Total Year
2005 - $- 1,986 $22.00 $26.32
============================ ==========================
Algeria
---------------------------- --------------------------
4th Qtr 2004 - $- - $- $-
============================ ==========================
---------------------------- --------------------------
Total Year
2005 - $- - $- $-
============================ ==========================
Total Crude Oil,
All Locations
-------------------------------------------------------
4th Qtr 2004 26,000 $27.22 3,260 $22.00 $26.32
============================ ==========================
Total Year
2005 - $- 1,986 $22.00 $26.32
============================ ==========================
3- Way Collars
Purchased
Volume Sold Floor Floor Ceiling
Bbl/day $/Bbl $/Bbl $/Bbl
United States
------------------------------------------------------
4th Qtr 2004 18,000 $22.50 $27.50 $32.14
======================================================
Total Year 2005 43,000 $27.28 $32.28 $46.89
======================================================
Algeria
------------------------------------------------------
4th Qtr 2004 20,000 $18.00 $22.00 $28.07
======================================================
Total Year 2005 - $- $- $-
======================================================
Total Crude Oil,
All Locations
------------------------------------------------------
4th Qtr 2004 38,000 $20.13 $24.61 $30.00
======================================================
Total Year 2005 43,000 $27.28 $32.28 $46.89
======================================================
Anadarko Petroleum Corporation
Natural Gas Hedge Position for 2004 & 2005
As of October 22, 2004
Fixed and Physical
Contracts 2- Way Collars
Volume NYMEX Price Volume Floor Ceiling
Natural Gas MMMBtu/d $/MMBtu MMMBtu/d $/MMBtu $/MMBtu
United States
----------------------- -------------------------
4th Qtr 2004 200.0 $3.88 44.3 $4.29 $6.43
======================= =========================
Total Year 2005 - $- 26.3 $3.76 $5.65
======================= =========================
Canada
----------------------- -------------------------
4th Qtr 2004 45.2 $3.63 - $- $-
======================= =========================
Total Year 2005 32.6 $3.46 - $- $-
======================= =========================
Total Natural Gas,
All Locations
----------------------- -------------------------
4th Qtr 2004 245.2 $3.83 44.3 $4.29 $6.43
======================= =========================
Total Year 2005 32.6 $3.46 26.3 $3.76 $5.65
======================= =========================
3- Way Collars
Purchased
Volume Sold Floor Floor Ceiling
MMMBtu/d $/MMBtu $/MMBtu $/MMBtu
United States
-----------------------------------------
4th Qtr 2004 268.8 $2.67 $3.65 $5.30
=========================================
Total Year 2005 268.8 $4.01 $5.00 $9.37
=========================================
Canada
-----------------------------------------
4th Qtr 2004 - $- $- $-
=========================================
Total Year 2005 - $- $- $-
=========================================
Total Natural Gas,
All Locations
-----------------------------------------
4th Qtr 2004 268.8 $2.67 $3.65 $5.30
=========================================
Total Year 2005 268.8 $4.01 $5.00 $9.37
=========================================
Anadarko Petroleum Corporation
As of October 29, 2004
4th Qtr Total Year
Financial and Operating Guidance Forecast Forecast
------------------ ------------------
Units Units
------------------ ------------------
Total Sales (MM BOE) 45 - 47 189 - 192
Crude Oil (MBbl/d): 169 - 185 183 - 187
United States 88 - 90 87 - 88
Canada 10 - 12 13 - 14
Algeria 50 - 60 61 - 63
Other International 21 - 25 21 - 23
Natural Gas (MMcf/d): 1,655 - 1,685 1,745 - 1,754
United States 1,255 - 1,295 1,350 - 1,360
Canada 390 - 410 392 - 397
Natural Gas Liquids (MBbl/d): 36 - 41 43 - 44
United States 34 - 38 40 - 42
Canada 2 - 3 2 - 3
----------------------------------------------------------------------
$/ Unit $/ Unit
------------------ ------------------
Price Differentials vs NYMEX
(w/o hedges)
Crude Oil ($/Bbl): (4.00) - (4.75) (3.40) - (3.55)
United States (3.00) - (3.25) (2.35) - (2.40)
Canada (4.50) - (5.00) (3.60) - (3.60)
Algeria (3.50) - (3.75) (2.25) - (2.30)
Other International (12.00) - (12.50) (11.50) - (11.65)
Natural Gas ($/Mcf): (0.65) - (0.75) (0.48) - (0.52)
United States (0.55) - (0.65) (0.40) - (0.45)
Canada (0.90) - (1.00) (0.70) - (0.75)
----------------------------------------------------------------------
$MM $MM
------------------ ------------------
Other Revenues:
Marketing 12 - 15 50 - 53
Minerals and Other 10 - 12 38 - 40
----------------------------------------------------------------------
Costs and Expenses:
$ / Boe $ / Boe
------------------ ------------------
Direct Operating Costs 3.25 - 3.45 3.40 - 3.45
Transportation and Cost of
Product 1.20 - 1.35 1.25 - 1.30
Depreciation, Depletion and
Amortization 7.50 - 7.75 7.50 - 7.60
Production Taxes (% of Revenue) 5.5% - 6.0% 5.7% - 5.8%
$MM $MM
------------------ ------------------
Administrative and General 85 - 95 355 - 365
Impairments of Oil and Gas
Assets - - 20 10 - 30
Interest Expense 80 - 90 340 - 350
Other (Income) Expense (5) - 15 67 - 87
Federal Tax Rate 36% - 40% 35% - 37%
Deferred Taxes (% of Total
Taxes) -5% - 0% 5% - 10%
----------------------------------------------------------------------
Avg. Shares Outstanding (MM)
Basic 243 - 245 249 - 251
Diluted 245 - 247 251 - 253
$MM $MM
------------------ ------------------
Capital Investment 725 - 775 2,980 - 3,030
E&P (Cost Incurred) 663 - 705 2,725 - 2,767
Capitalized Direct Expenses 46 - 50 172 - 176
Capitalized Interest 16 - 20 83 - 87
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