Anadarko Expects Improved 2003 Finding & Development Costs; Capital Program Delivering Results; Overhead Cost Cuts Freeing Funds for Drilling.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Sept. 3, 2003

Anadarko Petroleum Corporation (NYSE:APC) today announced its 2003 finding and development (F&D) costs are expected to be at the low end of its previous guidance of $7.50 - $8.50 per barrel of oil equivalent (BOE), a significant improvement over 2002 results.

"Anadarko's capital program is delivering results," Robert J. Allison, Jr., Anadarko chairman, president and CEO said. "So far this year, we've had discoveries and development successes in each of our core areas: the Gulf of Mexico, U.S. onshore, Canada and Algeria. We're seeing better than expected success in our Bossier and Vernon plays in East Texas and North Louisiana, and in our enhanced oil recovery properties in Wyoming.

"As a result, I'm pleased to report that, while there are still a lot of moving parts, I fully expect our F&D costs for 2003 to end up near the low end of our $7.50 to $8.50 guidance range," Allison added. "With more success during the remaining part of this year, we may achieve even better numbers.

"We're also making progress in lowering overhead costs," Allison said. "In July, we launched an effort to cut more than $100 million off our annual cost structure. That means we're freeing up more money to invest in exploration and development that will add reserves and long-term value for shareholders."

Allison noted that the company has intensified its focus on doing what Anadarko has done historically -- finding and producing oil and gas at low cost.

Anadarko Petroleum Corporation is one of the world's largest independent oil and gas exploration and production companies. Houston-based Anadarko is active in the U.S., Canada, Algeria and Qatar and is executing strategic exploration programs in several other countries. More information is available at 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 and 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. Anadarko discloses proved reserves that comply with the Securities and Exchange Commission's (SEC) definitions. Additionally, Anadarko may disclose estimated recoverable reserves, which the SEC guidelines do not allow us to include in filings with the SEC. See Additional Factors Affecting Business in the Management's Discussion and Analysis included in the company's 2002 Annual Report on Form 10-K.