Anadarko Petroleum Offers Insight On 2002 Spending Plan and 2001 Financial & Operating Results.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--Jan. 14, 2002

Anadarko Petroleum Corporation (NYSE:APC) outlined today its expectations for capital spending for 2002 and offered guidance on 2001 financial and operating results.

"Overall, 2001 was a great year for Anadarko," said John N. Seitz, President and Chief Executive Officer of Anadarko. "However, fourth-quarter results will clearly reflect the downturn in the industry. In reaction to these changing market conditions, in July of 2001, we began slowing our drilling program -- which impacted fourth-quarter volumes and will affect 2002 financial and operating results. But the strategies we have in place should also grow shareholder value and enhance the company's ability to achieve double-digit growth in production and reserves in the future.

"It's simply the wrong time in the commodity price cycle to build organic production growth. Instead, now is the time to buy back stock, build reserves and build our inventory of drilling locations to take advantage of the next up-turn in oil and gas prices. Anadarko has always acted with a view towards the long-term interest of our shareholders, and these actions are in line with that strategy," Seitz said.

2001 PRELIMINARY RESULTS

-- Record annual earnings. Fourth-quarter earnings per share of about 25 cents
diluted. Full-year earnings of about $3.25 per share, or about $5.05 per share
excluding the third-quarter ceiling test write-down.

-- Annual production volumes up more than 75 percent, from 112 million barrels
of oil equivalent (BOE) to 199 million BOE in 2001. On a per-share basis,
production rose about 30 percent.

-- Increased proved reserves about 10 percent with a reserve replacement ratio
of better than 2-to-1.

-- Finding costs of slightly over $9 per BOE, largely due to reserve revisions
and higher service costs.

2002 PRELIMINARY OUTLOOK

Anadarko expects to recommend to the Board of Directors a capital spending budget for 2002 of approximately $2 billion, down about 50 percent from 2001 levels. The company expects that actual spending levels could vary considerably depending on commodity prices. The proposed budget would include $500 million for domestic and international exploration.

"Flexibility is the common theme for our 2002 strategic plan. We have a proven record of success with exploration, and we have a great inventory of ready-to-drill locations," Seitz added. "We've shown that we can add value through acquisitions, and we'll continue to buy back APC stock. We could go shopping for oil and gas reserves among the billions of dollars of announced property sales on the market, but right now the best acquisition we see in the market is APC stock. We will continue to buy back our stock at current levels," Seitz said.

THE FOLLOWING ITEMS HIGHLIGHT THE 2002 STRATEGY

-- Focus on reserve growth: 2002 exploratory drilling program

gives exposure to potential net reserves of more than 2

billion barrels (unrisked).

-- High-grade the portfolio.

-- Buy back Anadarko stock.

-- Carefully manage the balance sheet.

-- Be flexible.

Anadarko Petroleum Corporation is one of the largest independent exploration and production companies in the world. The company reported daily production of 558,000 barrels of oil equivalent in third quarter of 2001. U.S. operations are in Texas, Louisiana, the Mid-Continent and Rocky Mountain regions, Alaska and the Gulf of Mexico. Internationally, it is active in Canada, Algeria, Qatar, Oman, Tunisia, Congo, Gabon, Venezuela, Australia and the North Atlantic. More information about the company, including recent investor presentations, is available at www.anadarko.com

President and CEO John Seitz will host investor meetings to discuss his views on the industry and Anadarko's preliminary capital spending plans for 2002. Copies of the presentation will be available on www.anadarko.com

Meetings will be held in the following locations.

    --  New York City, January 14, 10:00 a.m.
        The St. Regis Hotel
        Two East 55th Street at 5th Ave
        The Versailles Room, 2nd floor

    --  Boston, January 14, 3:00 p.m.
        Bay Tower Club
        60 State Street
        33rd floor, Harbor View Suite

    --  Denver, January 15, 2:00 p.m.
        Pinnacle Club
        555 17th Street
        Pioneer Room

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. See Additional Factors Affecting Business in the Management's Discussion and Analysis (MD&A) included in the company's 2000 Annual Report on Form 10-K.