Anadarko Announces Third-Quarter Results.Reaffirms Strong Liquidity Position, Provides Update on Pre-Salt Discovery Offshore Brazil and Successful Appraisal in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico 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 HOUSTON -- 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. ) today announced third-quarter 2008 net income available to common stockholders totaled $2.165 billion, or $4.62 per share (diluted). Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $2.164 billion, or $4.62 per share (diluted). The net income results include certain items affecting comparability that are typically excluded by the investment community in published estimates. In total, these items increased net income by approximately $1.399 billion, or $3.00 per share (diluted), on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. .(1)Cash flow from continuing operations in the third quarter of 2008 was $3.520 billion, and discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. totaled $1.132 billion.(2) OPERATIONAL HIGHLIGHTS * Increased reported sales volumes 9 percent over third-quarter 2007 from retained properties * Achieved production milestone of 600,000 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 ) per day * Set new daily production records in the Greater Natural Buttes Buttes is a municipality in the district of Val-de-Travers in the canton of Neuchâtel in Switzerland. and Powder River Basin The Powder River Basin is a region in southeast Montana and northeast Wyoming about 120 miles east to west and 200 miles north to south known for its coal deposits. It is both a topographic drainage and geologic structural basin. "As illustrated by the highlights above, our third-quarter performance was very strong," Anadarko Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jim Hackett said. "At one point during the quarter, we achieved a daily record for sales volumes of 600,000 BOE. Following major back-to-back hurricanes, our employees and contractors throughout our operating regions performed in an extraordinary fashion to safely overcome the impacts of the storms - enabling us to achieve a 9-percent increase in overall reported sales volumes over third-quarter 2007 and, for the seventh consecutive quarter, meet or exceed our volume guidance." At Independence Hub, the company's largest producing platform in the Gulf of Mexico, production was restored within three days of Hurricane Ike. Anadarko also demonstrated notable growth in the Rockies with new daily production records in both the Greater Natural Buttes area of Utah, where sales volumes increased nearly 40 percent for the quarter compared to the previous year, and the Powder River Basin of Wyoming, where sales volumes for the quarter were up about 55 percent year-over-year. Third-quarter 2008 sales volumes of natural gas, crude oil and natural gas liquids totaled 51 million BOE, or 552,000 BOE per day. Third-quarter 2008 natural gas sales volumes averaged 1.994 billion cubic feet per day. Oil sales volumes in the third quarter averaged 182,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. , and natural gas liquids sales volumes averaged 38,000 barrels per day. EXPLORATION HIGHLIGHTS * Announced substantial pre-salt discovery offshore Brazil at the Wahoo prospect * Encountered more than 700 feet of net pay in Tonga West appraisal well in Gulf of Mexico * Continued U.S. onshore exploration program with encouraging results Anadarko continues to build upon its successful international and deepwater Gulf of Mexico exploration and appraisal programs. During the third quarter, the company announced a substantial pre-salt discovery at the deepwater Wahoo prospect on block BM-C-30 in the Campos Basin Campos Basin is a petroleum rich area located offshore of Rio de Janeiro, Brazil. It has a total area of 100,000 km², with 40 fields discovered and operated by Petrobras. Two major oil fields are Marlim and Albacora. offshore Brazil. Extensive logging, fluid and pressure sampling has now confirmed more than 200 feet of net pay consisting of high-quality, high-gravity crude oil in an upper zone, with additional hydrocarbon-bearing zones encountered deeper in the well. Casing is currently being run to total depth to prepare for drillstem testing in 2009 to further evaluate the multiple hydrocarbon-bearing zones. The partnership also is planning further exploration and appraisal drilling on the block in 2009. Anadarko, through a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , operates the block with a 30-percent working interest. "Since announcing the Wahoo pre-salt discovery in September, we have successfully reached total depth of approximately 20,000 feet, encountered an additional oil accumulation in the deeper objective and confirmed the quality of the previously announced reservoir," Anadarko Sr. Vice President, Worldwide Exploration, Bob Daniels said. "We are very encouraged by this discovery and its similarities to the giant Jubarte field, and we look forward to working with the Brazilian government and our partners to further delineate the area's potential." Anadarko plans to now move the Transocean Deepwater Millennium Deepwater Millennium is a 5th generation, dynamic positioned (DP), drillship owned by Transocean. History Built originally for R&B Falcon, she was completed in 1999 by Samsung Heavy Industries in South Korea. In 2001 R&B Falcon merged with Transocean Sedco-Forex. drillship to the Espirito Santo Basin to continue its pre-salt exploration program, which includes re-entering the Serpa prospect and drilling at least five additional pre-salt tests. Anadarko and its partners also continue an active program offshore Ghana, where the partnership recently spud the Hyedua-2 appraisal well on the Deepwater Tano license. Prior to year end, the partnership also plans to spud the nearby Tweneboa prospect, which has similar size and seismic characteristics to the giant Jubilee field. The partners expect Jubilee to be sanctioned prior to year end. In the Gulf of Mexico, Anadarko recently completed a successful appraisal well, located 3,000 feet to the south and up dip from the original Tonga West discovery well. The appraisal well encountered more than 700 feet of net pay in dipping formations. Anadarko is the operator with a 33.75-percent working interest. "The Tonga West confirmation well encountered subsalt Miocene sands with much greater quality and thickness than we had anticipated," Anadarko Sr. Vice President, Worldwide Operations, Chuck Meloy said. "This well is a tremendous success that affirms this world-class reservoir and solidifies our previous estimated resource range of 200 million to 400 million BOE. Anadarko expects to sanction the Caesar/Tonga complex this year, with first significant volumes as early as 2011." Anadarko's U.S. onshore exploration programs in the Maverick Basin, and Haynesville and Marcellus Shale plays are ongoing with encouraging results. Additional details regarding Anadarko's U.S. onshore exploration programs and other activities are available in the third-quarter 2008 Operations Report at www.anadarko.com. FINANCIAL HIGHLIGHTS * Completed $600 million worth of share repurchases * Retired approximately $350 million of debt * Held strong liquidity position with a cash balance of nearly $2 billion at quarter end "We believe we have a strong capital structure and liquidity position," Hackett said. "We closed the quarter with a cash balance of nearly $2 billion, after completing the repurchase of $600 million worth of shares and retiring approximately $350 million of debt. Our $1.3 billion revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility remains undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely , and we anticipate closing the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of Peregrino during the fourth quarter, with net cash proceeds in excess of $1 billion. We expect to deliver upon our commitment to achieve our debt-to-cap target of between 25 percent to 35 percent by year end." CONFERENCE CALL TOMORROW AT 9 A.M. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , 10 A.M. EST EST electroshock therapy. EST abbr. electroshock therapy Anadarko will host a conference call on Tuesday, Nov. 4, at 9 a.m. Central Standard Time (10 a.m. Eastern Standard Time) to discuss third-quarter results and the company's outlook for the remainder of 2008. The dial-in number is 888.680.0878 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or 617.213.4855 internationally. The confirmation number is 79021387. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will also be available on the Web site for approximately 30 days following the conference call. ANADARKO OPERATIONS REPORT For more details on Anadarko's operations, please refer to the comprehensive report on third-quarter 2008 activity. The report will be available at www.anadarko.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page. FINANCIAL DATA Nine pages of summary financial data follow, including current hedge positions, financial guidance and supplemental production 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 2007, Anadarko had 2.4 billion barrels of oil equivalent of 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. , making it one of the world's largest independent oil and natural gas exploration and production companies. For more information about Anadarko, please visit www.anadarko.com. (1)See the accompanying table for details of certain items affecting comparability. (2)See the accompanying table for a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to non-GAAP financial measures and a 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, including Anadarko's ability to successfully meet its production guidance, complete its announced asset divestitures, achieve debt-reduction goals and complete and commercially operate the drilling prospects identified in this news release. See "Risk Factors" in the company's 2007 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. and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements. Cautionary Note to U.S. Investors: The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Anadarko uses certain terms in this news release, such as "estimated resource range," and similar terms that the SEC's guidelines strictly prohibit Anadarko from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in Anadarko's Form 10-K for the year ended December 31, 2007, File No. 001-08968, available from Anadarko at www.anadarko.com or by writing Anadarko at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 1-800-SEC-0330. 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