Anadarko Provides Guidance for Second Quarter, Full Year; Quarterly Modeling Call Details Key Assumptions Behind Company Estimates.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--May 3, 2002 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. ) at its quarterly modeling call today announced it expects to earn about 80 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. (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. ) for the second quarter of 2002, with cash flow of $2.15 per share (diluted). For the full year, Anadarko expects to earn about $3.20 per share (diluted), with cash flow of more than $8.45 per share (diluted). In the first quarter of 2002, Anadarko had 34 cents per share (diluted) of net income and $1.51 per share (diluted) of cash flow. The company's earnings guidance is largely based on key assumptions related to commodity prices and volumes as discussed below. Price Assumptions -- Anadarko's estimates assume average NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil prices of $26 for the second quarter and $24.75 for the year and NYMEX natural gas prices of $3.35 for the second quarter and $3.30 for the year. For its estimates, Anadarko used NYMEX prices, plus or minus an expected price "differential" for each of the company's major producing areas, and any adjustment from hedge positions; actual price data is shown on the attached financial table. Anadarko has hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. 25 percent of its oil and natural gas production for the second quarter and about 15 percent of its oil and 4 percent of its gas volumes for the second half of the year. The hedge positions are under both fixed-price and "collared col·lar n. 1. The part of a garment that encircles the neck. 2. A necklace. 3. a. A restraining or identifying band of leather, metal, or plastic put around the neck of an animal. b. " transactions, which use price ceilings and floors to help ensure revenues within a determined range. Volume Assumptions -- Oil and gas sales volumes are expected to total 49 million barrels of oil equivalent (MMBOE MMBOE Million Barrels of Oil Equivalent (energy and petroleum industry) ) in the second quarter, down 2 percent from the 50 MMBOE in the first quarter and down 6 percent from the 52 MMBOE in the second quarter of 2001. Full-year 2002 sales volumes are expected to total 199 MMBOE, flat compared with 2001 sales volumes. However, in line with Anadarko's stated expectations, crude oil will account for a larger portion of total volumes. For the full year, crude oil volumes are expected to be 76 million barrels, up 12 percent from 2001. Total company natural gas volumes are expected to be 642 billion cubic feet (Bcf), down almost 8 percent from 695 Bcf in 2001. Anadarko's U.S. natural gas volumes are expected to be 509 Bcf in 2002, compared with 573 Bcf in 2001, a decrease of 11 percent from last year. The attached financial tables detail other key assumptions behind Anadarko's estimates. Anadarko Petroleum Corporation is one of the largest independent oil and gas exploration and production companies in the world. Anadarko reported average daily production of 553,000 barrels of oil equivalent in the first quarter of 2002. U.S. operations are in 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 and Western states, 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 and 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 MexicoGolfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . Internationally, Anadarko has significant production in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. , 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 it is exploring in several other countries. More information about the company, including recent investor presentations, is available at www.anadarko.com 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 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 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 (MD&A) included in the company's 2001 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
Second Quarter 2002
Financial Model - Guidance
As of May 3, 2002
1st Quarter 2nd Quarter Total Year
Actual Forecast Forecast
---------------- ---------------- ----------------
$MM $/Share $MM $/Share $MM $/Share
------- ------- ------- ------- ------- -------
Net Income $88 $0.34 $206 $0.80 $820 $3.19
Cash Flow from
Operations $399 $1.51 $556 $2.15 $2,200 $8.46
---------------------------------------------------------------------
Price Deck
(NYMEX) ($/Unit) ($/Unit) ($/Unit)
Crude Oil
($/Bbl) $21.67 $26.00 $24.75
Natural Gas
($/Mcf) $2.32 $3.35 $3.30
Natural Gas
Liquids
(% of NYMEX
Oil Price) 54% 55% 55%
---------------------------------------------------------------------
Price Price Price
Differ- Differ- Differ-
ential ential ential
Volumes ($/Unit) Volumes ($/Unit) Volumes ($/Unit)
------- ------- ------- ------- ------- -------
Total Sales
(MMBoe) 50 49 199
Crude Oil
(MBbl/d): 212 $(3.31) 199 $(3.75) 209 $(3.60)
United States 91 $(2.67) 84 $(3.75) 83 $(3.25)
Canada 38 $(5.74) 36 $(5.50) 37 $(6.25)
Algeria 59 $(1.55) 59 $(1.75) 64 $(1.50)
Other
Inter-
national 24 $(6.29) 21 $(6.25) 25 $(6.25)
Natural Gas
(MMcf/d): 1,805 $(0.15) 1,766 $(0.35) 1,758 $(0.30)
United States 1,458 $(0.19) 1,397 $(0.35) 1,395 $(0.30)
Canada 347 $0.02 369 $(0.40) 363 $(0.25)
Natural Gas
Liquids
(MBbl/d): 40 42 42
United States 38 40 40
Canada 3 2 2
---------------------------------------------------------------------
$MM $MM $MM
------- ------- -------
Other Revenues:
Marketing
Margin
(Sales -
Costs) $11 $22 $82
Minerals and
Other $21 $18 $73
$MM $/Boe $MM $/Boe $MM $/Boe
------- ------- ------- ------- ------- -------
Costs and
Expenses:
Operating
Costs $170 $3.41 $180 $3.70 $716 $3.60
Admini-
strative
and General $72 $70 $278
Depr., Depl.
and Amort. $267 $5.36 $268 $5.50 $1,084 $5.45
Impairments
of Oil and
Gas Assets $8 $ -- $8
Goodwill
Production
and Other
Taxes
(% of Rev) $57 7.7% 7.0% 7.0%
---------------------------------------------------------------------
$MM $MM $MM
------- ------- -------
Other Items:
Interest
Expense $49 $52 $203
Other
(Income)
Expense $23 $14 $69
---------------------------------------------------------------------
Federal Tax
Rate 32% 37% 36%
Deferred
Taxes (% of
Total Taxes) 27% 65% 55%
---------------------------------------------------------------------
Average Shares
Outstanding (MM)
Basic 248 248 249
Fully Diluted 264 259 260
---------------------------------------------------------------------
$MM $MM $MM
------- ------- -------
Capital
Investment $813 $502 $2,017
Capital
Expenditures $732 $406 $1,652
Capitalized
Direct
Expenses $43 $54 $200
Capitalized
Interest $38 $42 $165
Anadarko Petroleum Corporation
Hedge Position
As of May 3, 2002
Fixed and
Physical Contracts Collars
------------------ -----------------------------
NYMEX NYMEX Price
Volume Price Volume Floor Ceiling
------- ------- ------- ------------------
Crude Oil Bbl/d $/Bbl Bbl/d $/Bbl $/Bbl
--------- ------- ------- ------- ------- -------
United States
2nd Quarter 21,000 $24.67 20,000 $22.25 $28.23
3rd Quarter -- $ -- 18,000 $21.95 $28.03
4th Quarter -- $ -- 18,000 $21.95 $28.04
Average 7,000 $24.67 18,667 $22.06 $28.10
Canada
2nd Quarter 2,326 $24.47 10,000 $22.50 $24.61
3rd Quarter 3,000 $24.32 10,000 $22.50 $24.61
4th Quarter 3,000 $24.32 10,000 $22.50 $24.61
Average 2,775 $24.36 10,000 $22.50 $24.61
Total
2nd Quarter 23,326 $24.65 30,000 $22.33 $27.02
3rd Quarter 3,000 $24.32 28,000 $22.15 $26.81
4th Quarter 3,000 $24.32 28,000 $22.15 $26.82
Average 9,775 $24.58 28,667 $22.21 $26.89
Natural Gas MMcf/d $/Mcf MMcf/d $/Mcf $/Mcf
----------- ------- ------- ------- ------- -------
United States
2nd Quarter 336.0 $3.09 25 $3.00 $4.87
3rd Quarter -- $ -- 25 $3.00 $4.87
4th Quarter -- $ -- 25 $3.00 $4.87
Average 112.0 $3.09 25 $3.00 $4.87
Canada
2nd Quarter 39.9 $3.43 9.5 $1.65 $4.21
3rd Quarter 39.9 $3.43 9.5 $1.66 $4.23
4th Quarter 58.7 $3.48 3.2 $1.66 $4.23
Average 46.2 $3.45 7.4 $1.66 $4.22
Total
2nd Quarter 376 $3.13 35 $2.63 $4.69
3rd Quarter 40 $3.43 35 $2.63 $4.69
4th Quarter 59 $3.48 28 $2.85 $4.80
Average 158 $3.20 32 $2.69 $4.72
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