Anadarko to Divest Canadian LNG Terminal Project; Retains Value with Throughput Option at Bear Head.

HOUSTON -- Anadarko Petroleum Corporation (NYSE:APC) today announced it has agreed to sell Bear Head LNG Corporation, a wholly owned subsidiary that is developing a liquefied natural gas (LNG) receiving terminal at Point Tupper, Nova Scotia.

Under the agreement with U.S. Venture Energy, a private equity firm, Anadarko will receive $125 million, as well as an 18-month option to secure up to 350 million cubic feet per day of throughput capacity at competitive rates. The option period begins once the transaction closes.

"With the sale, we are recovering our investment and a reasonable premium, while retaining the ability to supply LNG to the Canadian Maritimes and U.S. Northeast consuming regions," Anadarko Senior Vice President Karl Kurz said.

"From the beginning, Anadarko pursued Bear Head as a means to commercialize international natural gas resources. We committed to our investors that we would either secure an upstream supply source or would explore other options with our terminal within a two-year period. With this agreement, we retain the upstream opportunity in the near term without owning and operating the LNG terminal," Kurz said.

"This decision also is consistent with our recent announcement of plans to divest our Anadarko Canada subsidiary, with proceeds to be used to retire debt associated with the pending acquisitions of Kerr-McGee and Western Gas Resources," he said.

The sale to U.S. Venture Energy includes all assets, rights and obligations associated with the Bear Head project, excluding long-term pipeline transportation agreements, and is expected to close within a few weeks, subject to normal and customary conditions. Anadarko plans to work closely with U.S. Venture Energy during the transition.

ABOUT ANADARKO

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. Anadarko's operational focus in North America extends from the deepwater Gulf of Mexico, up through the western U.S. and Canadian regions and onto the North Slope of Alaska. Anadarko's international activities are focused on major positions in North Africa, the Middle East and Indonesia, as well as exploration or production operations in several other countries. In June, Anadarko agreed to acquire Kerr-McGee Corporation (NYSE: KMG) and Western Gas Resources, Inc. (NYSE: WGR) in separate all-cash transactions totaling $21.1 billion, plus the assumption of debt estimated at $2.2 billion. For more information about how Anadarko is bringing excellence to the surface, please visit: 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 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, or that the transactions described above will occur. 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.