Anadarko Announces Third Quarter Results.

HOUSTON -- Anadarko Petroleum Corporation (NYSE:APC) today announced third quarter 2006 net income available to common shareholders of $1.46 billion, or $3.15 per share (diluted), and income from continuing operations of $1.38 billion, or $2.98 per share (diluted). These results included $873 million ($567 million after tax) or $1.23 per share (diluted) of unrealized gains on derivatives. The third quarter performance includes the results of Kerr-McGee Corporation and Western Gas Resources beginning on their respective Aug. 10 and Aug. 23, 2006, acquisition dates, while continuing operations results exclude Anadarko's divested Canadian subsidiary.

In the 2005 third quarter, net income available to common shareholders was $596 million, or $1.25 per share (diluted) on a split-adjusted basis, and income from continuing operations was $532 million, or $1.12 per share (diluted). Third quarter 2005 results from continuing operations included $99 million ($64 million after tax) or $.13 per share (diluted) of unrealized losses on derivatives.

Cash flow from operating activities of continuing operations was $1.57 billion in the third quarter 2006, and discretionary cash flow totaled $1.11 billion.(1)

"The third quarter was very significant for Anadarko as we completed two major acquisitions and began repositioning our company for the future, including the divestiture of our Canadian subsidiary and certain deepwater properties, which will help us de-lever the balance sheet," Anadarko Chairman, President and CEO Jim Hackett said. "Financial and operating results continued to be strong, assisted by partial-quarter contributions from Kerr-McGee and Western Gas. In addition, we are already beginning to achieve operating synergies within our expanded core Gulf of Mexico deepwater and Rockies unconventional resource plays, providing further conviction that the combined portfolio can deliver competitive growth and returns."

Third quarter sales volumes of natural gas, crude oil and natural gas liquids totaled 54 million barrels of oil equivalent (BOE), or 585,000 BOE per day. Sales volumes from continuing operations totaled 49 million BOE, or 530,000 BOE per day, as natural gas sales averaged 1.69 billion cubic feet per day, oil sales averaged 203,000 barrels per day, and natural gas liquids sales averaged 45,000 barrels per day.

EARNINGS CONFERENCE CALL TOMORROW AT 9:00 A.M. CST, 10:00 A.M. EST 

Anadarko will host an earnings conference call tomorrow at 9:00 a.m. Central Standard Time (10:00 a.m. Eastern Standard Time) to discuss third quarter 2006 results and the company's outlook for the remainder of the year. The dial-in number is 913-981-5591 and the confirmation number is 5964619. 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 at www.anadarko.com on the Investor Relations page.

FINANCIAL DATA

Eight pages of summary financial data follow, including current hedge positions and guidance.

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. In August 2006, Anadarko acquired Kerr-McGee Corporation and Western Gas Resources, Inc. in separate transactions.

(1) See accompanying table for a reconciliation of GAAP to non-GAAP financial measures and statement 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 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 "Risk Factors" in the company's 2005 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.

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