-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S8pRnscROZ+fcCrtK8i8GwpL7hcyQTAJqBdJRqGwTyGuC7D2nNNpoxPLYOFp64C3 g+IewEuLm0vJGmh57t2zWA== 0001157523-04-010081.txt : 20041029 0001157523-04-010081.hdr.sgml : 20041029 20041029073630 ACCESSION NUMBER: 0001157523-04-010081 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041029 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041029 DATE AS OF CHANGE: 20041029 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANADARKO PETROLEUM CORP CENTRAL INDEX KEY: 0000773910 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760146568 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08968 FILM NUMBER: 041104216 BUSINESS ADDRESS: STREET 1: 1201 LAKE ROBBINS DRIVE CITY: THE WOODLANDS STATE: TX ZIP: 77380-1046 BUSINESS PHONE: 832-636-1000 MAIL ADDRESS: STREET 1: P.O BOX 1330 CITY: HOUSTON STATE: TX ZIP: 77251-1330 8-K 1 a4753726.txt ANADARKO PETROLEUM CORP. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Earliest Event Reported: October 29, 2004 Commission File No. 1-8968 ANADARKO PETROLEUM CORPORATION 1201 Lake Robbins Drive, The Woodlands, Texas 77380-1046 (832) 636-1000 Incorporated in the Employer Identification State of Delaware No. 76-0146568 Item 2.02 Results of Operations and Financial Condition On October 29, 2004, Anadarko Petroleum Corporation announced third quarter 2004 earnings. The press release is included in this report as Exhibit 99. Item 7.01 Regulation FD Disclosure On October 29, 2004, Anadarko provided guidance for the remainder of 2004. This information is contained in the press release included in this report as Exhibit 99. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99 Anadarko Press Release, dated October 29, 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized officer. ANADARKO PETROLEUM CORPORATION (Registrant) October 29, 2004 By: /s/ Diane L. Dickey ----------------------------------------------- Diane L. Dickey - Vice President and Controller EX-99 2 a4753726ex99.txt PRESS RELEASE Exhibit 99 Anadarko Announces Third Quarter 2004 Results HOUSTON--(BUSINESS WIRE)--October 29, 2004--Anadarko Petroleum Corporation (NYSE:APC) -- EARNINGS AND CASH FLOW STRONG -- DIVESTITURES OF NON-CORE ASSETS EXCEED TARGETS -- $1.2 BILLION OF DEBT REPURCHASES COMPLETED -- 9 MILLION COMMON SHARES REPURCHASED Anadarko Petroleum Corporation (NYSE:APC) today announced third quarter 2004 net income available to common shareholders of $399 million, or $1.58 per share (diluted). Net income includes costs associated with the implementation of its refocused strategy, primarily the repurchase of debt and the sale of non-core properties, which amounted to $74 million, or $0.29 per share (diluted). For the same period in 2003, net income was $274 million, or $1.09 per share (diluted). Year-to-date 2004 net income is $1.2 billion, or $4.72 per share (diluted). Cash flow from operating activities totaled $992 million in the third quarter 2004, compared to $884 million for the third quarter 2003. Cash flow from operations before changes in assets and liabilities for the third quarter 2004 totaled $617 million, which includes a reduction of $347 million for current taxes related to the divestitures. This compares to $868 million for the third quarter 2003.(1) Year-to-date 2004 cash flow from operating activities totaled $2.76 billion. "Anadarko is rapidly executing the strategy we announced in June, divesting non-core properties and refocusing the company to deliver sustainable, profitable growth," said Jim Hackett, Anadarko President and CEO. "Using proceeds from asset sales, along with substantial cash flow from operations resulting from strong oil and natural gas prices, we are delivering on our commitment to repurchase both debt and common stock." Consistent with its strategy announced in June, Anadarko has agreements in place to sell approximately $2.5 billion of assets and has additional agreements pending on about $800 million of assets. Together, these divestitures represent year-end 2003 proved reserves of approximately 285 million barrels of oil equivalent (BOE) and production of about 120,000 BOE per day. Net income was not directly affected by the sales, as proceeds were recognized as an adjustment of capitalized costs under full-cost accounting rules. In September, the company repurchased $750 million aggregate principal amount of debt securities, which resulted in $63 million associated with premiums and other costs recorded to interest expense in the third quarter. The company's $1.2 billion cash tender offer was completed in early October with the repurchase of another $455 million of debt securities. The company anticipates costs associated with this repurchase to be about $40 million, which will be recorded in the fourth quarter. Total debt at the end of the quarter has been reduced by about $575 million since the first of the year. Since initiating a $2 billion stock repurchase program in June, the company has repurchased 9 million outstanding common shares at a cost of approximately $550 million to date. VOLUMES AND PRICES During the third quarter 2004, sales volumes totaled 49 million BOE, or 534,000 BOE per day, up more than 4 percent from the second quarter due to the start-up of Anadarko's Marco Polo field in the deepwater Gulf of Mexico, continued drilling success in East Texas and North Louisiana tight gas plays and the timing of sales in Algeria. However, sales volumes were down relative to the prior-year third quarter due primarily to high natural decline rates on properties that are currently being divested. Third quarter 2004 volumes also were reduced an estimated 200,000 BOE by hurricane-related shut-downs in the Gulf of Mexico. Third quarter 2003 sales volumes were 50 million BOE, or 541,000 BOE per day. The company's average realized oil price in the third quarter 2004 was $34.42 per barrel, up 31 percent from the 2003 third quarter price of $26.36 per barrel. Anadarko's average realized natural gas price was $4.93 per thousand cubic feet (Mcf), up 9 percent from the $4.51 per Mcf received in the same period in 2003. Realized prices include the effect of hedges, including approximately $30 million of hedge losses related to properties being sold. "Strong prices continue to give us the necessary cash flow to execute our capital programs, strengthen the balance sheet, and return value directly to shareholders through our regular dividend program and stock repurchases," Hackett said. "Our strategic realignment is proceeding ahead of plan, and our core assets -- our foundation and growth platforms -- are creating value for the future. For example, our foundation assets in Anadarko's North Louisiana Vernon field and our Canadian Wild River play in Alberta continue to set record production levels. We brought the Marco Polo field in the Gulf of Mexico on-line this quarter. And we've also positioned ourselves well with a new growth opportunity through our planned LNG terminal in Nova Scotia where we held a ceremonial ground breaking yesterday and expect to have the facility on-line in late 2007." GUIDANCE The attached guidance for the fourth quarter and full year reflects the impact of asset sales, with adjustments based on anticipated closing dates. The adjustments result in lowered sales volume guidance. Absent the divestitures, estimated volumes would have been toward the higher end of previous guidance. EARNINGS CONFERENCE CALL TODAY AT 9:30 A.M. CDT, 10:30 A.M. EDT Anadarko will host an earnings conference call today at 9:30 a.m. Central Daylight Time (10:30 a.m. Eastern Daylight Time) to discuss third quarter 2004 results and the company's outlook for the remainder of the year. The dial-in number is 913-981-4910, and the confirmation number is 799234. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.anadarko.com. ANADARKO OPERATIONS REPORT For more details on Anadarko's operations, please refer to the comprehensive report on third quarter activity. The report will be available today at www.anadarko.com on the Investor Relations page. FINANCIAL DATA Several pages of information on the following topics are attached. -- Reconciliation of GAAP to Non-GAAP Measures -- Summary financial information -- Volumes and prices -- Hedge position as of Oct. 22, 2004 -- Financial and operating guidance Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by developing, acquiring and exploring for oil and gas resources vital to the world's health and welfare. As of year-end 2003, the company had 2.5 billion BOE of proved reserves, making it one of the world's largest independent exploration and production companies. Anadarko's operational focus extends from the deepwater Gulf of Mexico, up through Texas, Louisiana, the Mid-Continent, western U.S. and Canadian Rockies and onto the North Slope of Alaska. Anadarko also has significant production in Algeria, Venezuela and Qatar, and exploration or production positions in several other countries. For more information about how Anadarko is bringing excellence to the surface, please visit: www.anadarko.com. (1) See accompanying tables for a reconciliation of GAAP to non-GAAP financial measures and statements indicating why management believes these 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 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. See Regulatory Matters and Additional Factors Affecting Business in the Management's Discussion and Analysis included in the company's 2003 Annual Report on Form 10-K. Anadarko Petroleum Corporation Reconciliation of GAAP to Non-GAAP Measures Below is a reconciliation of net income available to common stockholders (GAAP) to net income available to common stockholders before the effect of implementation costs of the company's refocused strategy, oil and gas impairments and restructuring costs, net of taxes, (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. The company uses net income excluding the effect of implementation costs of the company's refocused strategy, oil and gas impairments and restructuring costs to evaluate the company's results for comparability between periods. Quarter Ended September 30 -------------------- millions except per share amounts 2004 2003 - ---------------------------------------------------------------------- Net Income - ---------------------------------------------------------------------- Net income available to common stockholders $399 $274 Add back: Implementation costs of refocused strategy, net of taxes 74 - Impairments related to oil and gas properties, net of taxes - 72 Restructuring costs, net of taxes - 21 - ---------------------------------------------------------------------- Net income available to common stockholders excluding implementation costs of refocused strategy, impairments and restructuring costs $473 $367 - ---------------------------------------------------------------------- Per Common Share - ---------------------------------------------------------------------- Net income available to common stockholders - diluted $1.58 $1.09 Net income available to common stockholders excluding implementation costs of refocused strategy, impairments and restructuring costs - diluted $1.87 $1.46 - ---------------------------------------------------------------------- Below is a reconciliation of cash provided by operating activities (GAAP) to cash flow from operations before changes in assets and liabilities (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. The company uses cash flow from operations before changes in assets and liabilities to demonstrate the company's ability to internally fund capital expenditures and to service or incur additional debt. It is useful in comparisons of oil and gas exploration and production companies because it excludes fluctuations in assets and liabilities. Quarter Ended September 30 -------------------- millions 2004 2003 - ---------------------------------------------------------------------- Cash Flow - ---------------------------------------------------------------------- Cash flow from operating activities $992 $884 Add back: Change in accounts receivable 74 (93) Change in accounts payable and accrued expenses (500) 88 Change in other items - net 51 (11) - ---------------------------------------------------------------------- Cash flow from operations before changes in assets and liabilities $617 $868 - ---------------------------------------------------------------------- Detail of Implementation Costs of Refocused Strategy Quarter Ended September 30, 2004 -------------------- millions Before Tax After Tax - ---------------------------------------------------------------------- Implementation costs of refocused strategy - ---------------------------------------------------------------------- Revenues - Hedge losses related to properties being sold $30 $20 Costs and Expenses - Severance, retention and other costs 21 13 Interest Expense - Debt repurchase costs 63 41 Income Tax Expenses - Current - 347 Income Tax Expenses - Deferred - (347) - ---------------------------------------------------------------------- Implementation costs of refocused strategy $114 $74 - ---------------------------------------------------------------------- Anadarko Petroleum Corporation Quarter Ended Year to Date Summary Financial Information September 30 September 30 ------------- --------------- $ and shares in millions 2004 2003 2004 2003 - ---------------------------------------------------------------------- Revenues - ---------------------------------------------------------------------- Gas sales $823 $762 $2,438 $2,165 Oil and condensate sales 589 458 1,643 1,337 Natural gas liquids sales 123 85 319 255 Other sales 27 35 65 87 - ---------------------------------------------------------------------- Total 1,562 1,340 4,465 3,844 - ---------------------------------------------------------------------- Costs and Expenses - ---------------------------------------------------------------------- Direct operating 177 158 498 445 Transportation and cost of product 67 49 183 142 Administrative and general 98 108 269 282 Depreciation, depletion and amortization 387 341 1,092 954 Other taxes 86 70 252 216 Impairments related to oil and gas properties - 74 9 92 - ---------------------------------------------------------------------- Total 815 800 2,303 2,131 - ---------------------------------------------------------------------- Operating Income 747 540 2,162 1,713 - ---------------------------------------------------------------------- Interest Expense and Other (Income) Expense - ---------------------------------------------------------------------- Interest expense 131 59 260 187 Other (income) expense 16 2 72 (25) - ---------------------------------------------------------------------- Total 147 61 332 162 - ---------------------------------------------------------------------- Income before Income Taxes 600 479 1,830 1,551 - ---------------------------------------------------------------------- Income Tax Expense 199 203 630 601 - ---------------------------------------------------------------------- Net Income Before Cumulative Effect of Change in Accounting Principle $401 $276 $1,200 $950 - ---------------------------------------------------------------------- Preferred Stock Dividends 2 2 4 4 - ---------------------------------------------------------------------- Net Income Available to Common Stockholders Before Cumulative Effect of Change in Accounting Principle $399 $274 $1,196 $946 - ---------------------------------------------------------------------- Cumulative Effect of Change in Accounting Principle - - - 47 - ---------------------------------------------------------------------- Net Income Available to Common Stockholders $399 $274 $1,196 $993 - ---------------------------------------------------------------------- Per Common Share - ---------------------------------------------------------------------- Net income - before change in accounting principle - basic $1.59 $1.09 $4.76 $3.79 Net income - before change in accounting principle - diluted $1.58 $1.09 $4.72 $3.74 Change in accounting principle - basic $- $- $- $0.19 Change in accounting principle - diluted $- $- $- $0.18 Net income - basic $1.59 $1.09 $4.76 $3.98 Net income - diluted $1.58 $1.09 $4.72 $3.92 - ---------------------------------------------------------------------- Average Number of Common Shares Outstanding - Basic 250 250 252 249 - ---------------------------------------------------------------------- Average Number of Common Shares Outstanding - Diluted 253 251 254 254 - ---------------------------------------------------------------------- Anadarko Petroleum Corporation Quarter Ended Year to Date Summary Financial Information September 30 September 30 ------------------- ------------------ $ in millions 2004 2003 2004 2003 - ---------------------------------------------------------------------- Cash Flow from Operating Activities - ---------------------------------------------------------------------- Net income before cumulative effect of change in accounting principle $401 $276 $1,200 $950 Depreciation, depletion and amortization 387 341 1,092 954 Deferred income taxes (177) 156 71 419 Impairments related to oil and gas properties - 74 9 92 Other noncash items 6 21 78 21 - ---------------------------------------------------------------------- 617 868 2,450 2,436 (Increase) decrease in accounts receivable (74) 93 (232) 29 Increase (decrease) in accounts payable and accrued expenses 500 (88) 658 (92) Other items - net (51) 11 (119) (74) - ---------------------------------------------------------------------- Net Cash Provided by Operating Activities $992 $884 $2,757 $2,299 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Capital Expenditures - ---------------------------------------------------------------------- Capital spending $710 $566 $2,060 $1,929 Capitalized interest 20 30 67 94 Capitalized overhead 41 45 127 142 - ---------------------------------------------------------------------- Total $771 $641 $2,254 $2,165 - ---------------------------------------------------------------------- Sept. 30, June 30, Dec. 31, 2004 2004 2003 - ---------------------------------------------------------------------- Condensed Balance Sheet - ---------------------------------------------------------------------- Cash and cash equivalents $154 $309 $62 Other current assets 1,516 1,407 1,262 Net properties and equipment 18,034 18,066 17,396 Other assets 440 443 437 Goodwill 1,395 1,378 1,389 - ---------------------------------------------------------------------- Total Assets $21,539 $21,603 $20,546 - ---------------------------------------------------------------------- Current liabilities $2,794 $2,044 $1,715 Long-term debt 4,120 4,895 5,058 Other long-term liabilities 5,180 5,513 5,174 Stockholders' equity 9,445 9,151 8,599 - ---------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $21,539 $21,603 $20,546 - ---------------------------------------------------------------------- Capitalization - ---------------------------------------------------------------------- Total debt $4,484 $5,063 $5,058 Stockholders' equity 9,445 9,151 8,599 - ---------------------------------------------------------------------- Total $13,929 $14,214 $13,657 - ---------------------------------------------------------------------- Capitalization Ratios - ---------------------------------------------------------------------- Total debt 32% 36% 37% Stockholders' equity 68% 64% 63% - ---------------------------------------------------------------------- Anadarko Petroleum Corporation Quarter Ended Year to Date Volumes and Prices September 30 September 30 --------------- --------------- 2004 2003 2004 2003 - --------------------------------------------------------------------- Natural Gas - --------------------------------------------------------------------- United States - --------------------------------------------------------------------- Volumes, billion cubic feet 132 136 378 378 Average daily volumes, million cubic feet per day 1,428 1,481 1,382 1,383 Price per thousand cubic feet $4.96 $4.48 $5.01 $4.41 - --------------------------------------------------------------------- Canada - --------------------------------------------------------------------- Volumes, billion cubic feet 35 33 108 103 Average daily volumes, million cubic feet per day 385 357 392 379 Price per thousand cubic feet $4.81 $4.65 $5.03 $4.83 - --------------------------------------------------------------------- Total - --------------------------------------------------------------------- Volumes, billion cubic feet 167 169 486 481 Average daily volumes, million cubic feet per day 1,813 1,838 1,774 1,762 Price per thousand cubic feet $4.93 $4.51 $5.01 $4.50 - --------------------------------------------------------------------- Crude Oil and Condensate - --------------------------------------------------------------------- United States - --------------------------------------------------------------------- Volumes, million barrels 8 8 24 26 Average daily volumes, thousand barrels per day 92 97 88 96 Price per barrel $31.83 $26.34 $30.94 $26.45 - --------------------------------------------------------------------- Canada - --------------------------------------------------------------------- Volumes, million barrels 1 2 4 5 Average daily volumes, thousand barrels per day 14 17 14 17 Price per barrel $38.86 $26.43 $35.63 $27.56 - --------------------------------------------------------------------- Algeria - --------------------------------------------------------------------- Volumes, million barrels 6 5 18 14 Average daily volumes, thousand barrels per day 63 51 64 52 Price per barrel $38.37 $27.66 $34.21 $28.06 - --------------------------------------------------------------------- Other International - --------------------------------------------------------------------- Volumes, million barrels 2 2 6 5 Average daily volumes, thousand barrels per day 17 24 21 19 Price per barrel $30.20 $23.68 $27.06 $22.94 - --------------------------------------------------------------------- Total - --------------------------------------------------------------------- Volumes, million barrels 17 17 52 50 Average daily volumes, thousand barrels per day 186 189 187 184 Price per barrel $34.42 $26.36 $31.98 $26.64 - --------------------------------------------------------------------- Natural Gas Liquids - --------------------------------------------------------------------- Total - --------------------------------------------------------------------- Volumes, million barrels 4 4 12 12 Average daily volumes, thousand barrels per day 46 46 45 44 Price per barrel $29.16 $20.36 $25.90 $21.10 - --------------------------------------------------------------------- Total Barrels of Oil Equivalent (BOE) - --------------------------------------------------------------------- Volumes, million BOE 49 50 145 142 Average daily volumes, thousand BOE per day 534 541 528 522 - --------------------------------------------------------------------- Anadarko Petroleum Corporation Crude Oil Hedge Position for 2004 & 2005 As of October 22, 2004 Fixed and Physical Contracts 2- Way Collars Volume NYMEX Price Volume Floor Ceiling Crude Oil Bbl/day $/Bbl Bbl/day $/Bbl $/Bbl United States ---------------------------- -------------------------- 4th Qtr 2004 26,000 $27.22 3,260 $22.00 $26.32 ============================ ========================== Total Year 2005 - $- 1,986 $22.00 $26.32 ============================ ========================== Algeria ---------------------------- -------------------------- 4th Qtr 2004 - $- - $- $- ============================ ========================== ---------------------------- -------------------------- Total Year 2005 - $- - $- $- ============================ ========================== Total Crude Oil, All Locations ------------------------------------------------------- 4th Qtr 2004 26,000 $27.22 3,260 $22.00 $26.32 ============================ ========================== Total Year 2005 - $- 1,986 $22.00 $26.32 ============================ ========================== 3- Way Collars Purchased Volume Sold Floor Floor Ceiling Bbl/day $/Bbl $/Bbl $/Bbl United States ------------------------------------------------------ 4th Qtr 2004 18,000 $22.50 $27.50 $32.14 ====================================================== Total Year 2005 43,000 $27.28 $32.28 $46.89 ====================================================== Algeria ------------------------------------------------------ 4th Qtr 2004 20,000 $18.00 $22.00 $28.07 ====================================================== Total Year 2005 - $- $- $- ====================================================== Total Crude Oil, All Locations ------------------------------------------------------ 4th Qtr 2004 38,000 $20.13 $24.61 $30.00 ====================================================== Total Year 2005 43,000 $27.28 $32.28 $46.89 ====================================================== Anadarko Petroleum Corporation Natural Gas Hedge Position for 2004 & 2005 As of October 22, 2004 Fixed and Physical Contracts 2- Way Collars Volume NYMEX Price Volume Floor Ceiling Natural Gas MMMBtu/d $/MMBtu MMMBtu/d $/MMBtu $/MMBtu United States ----------------------- ------------------------- 4th Qtr 2004 200.0 $3.88 44.3 $4.29 $6.43 ======================= ========================= Total Year 2005 - $- 26.3 $3.76 $5.65 ======================= ========================= Canada ----------------------- ------------------------- 4th Qtr 2004 45.2 $3.63 - $- $- ======================= ========================= Total Year 2005 32.6 $3.46 - $- $- ======================= ========================= Total Natural Gas, All Locations ----------------------- ------------------------- 4th Qtr 2004 245.2 $3.83 44.3 $4.29 $6.43 ======================= ========================= Total Year 2005 32.6 $3.46 26.3 $3.76 $5.65 ======================= ========================= 3- Way Collars Purchased Volume Sold Floor Floor Ceiling MMMBtu/d $/MMBtu $/MMBtu $/MMBtu United States ----------------------------------------- 4th Qtr 2004 268.8 $2.67 $3.65 $5.30 ========================================= Total Year 2005 268.8 $4.01 $5.00 $9.37 ========================================= Canada ----------------------------------------- 4th Qtr 2004 - $- $- $- ========================================= Total Year 2005 - $- $- $- ========================================= Total Natural Gas, All Locations ----------------------------------------- 4th Qtr 2004 268.8 $2.67 $3.65 $5.30 ========================================= Total Year 2005 268.8 $4.01 $5.00 $9.37 ========================================= Anadarko Petroleum Corporation As of October 29, 2004 4th Qtr Total Year Financial and Operating Guidance Forecast Forecast ------------------ ------------------ Units Units ------------------ ------------------ Total Sales (MM BOE) 45 - 47 189 - 192 Crude Oil (MBbl/d): 169 - 185 183 - 187 United States 88 - 90 87 - 88 Canada 10 - 12 13 - 14 Algeria 50 - 60 61 - 63 Other International 21 - 25 21 - 23 Natural Gas (MMcf/d): 1,655 - 1,685 1,745 - 1,754 United States 1,255 - 1,295 1,350 - 1,360 Canada 390 - 410 392 - 397 Natural Gas Liquids (MBbl/d): 36 - 41 43 - 44 United States 34 - 38 40 - 42 Canada 2 - 3 2 - 3 - ---------------------------------------------------------------------- $/ Unit $/ Unit ------------------ ------------------ Price Differentials vs NYMEX (w/o hedges) Crude Oil ($/Bbl): (4.00) - (4.75) (3.40) - (3.55) United States (3.00) - (3.25) (2.35) - (2.40) Canada (4.50) - (5.00) (3.60) - (3.60) Algeria (3.50) - (3.75) (2.25) - (2.30) Other International (12.00) - (12.50) (11.50) - (11.65) Natural Gas ($/Mcf): (0.65) - (0.75) (0.48) - (0.52) United States (0.55) - (0.65) (0.40) - (0.45) Canada (0.90) - (1.00) (0.70) - (0.75) - ---------------------------------------------------------------------- $MM $MM ------------------ ------------------ Other Revenues: Marketing 12 - 15 50 - 53 Minerals and Other 10 - 12 38 - 40 - ---------------------------------------------------------------------- Costs and Expenses: $ / Boe $ / Boe ------------------ ------------------ Direct Operating Costs 3.25 - 3.45 3.40 - 3.45 Transportation and Cost of Product 1.20 - 1.35 1.25 - 1.30 Depreciation, Depletion and Amortization 7.50 - 7.75 7.50 - 7.60 Production Taxes (% of Revenue) 5.5% - 6.0% 5.7% - 5.8% $MM $MM ------------------ ------------------ Administrative and General 85 - 95 355 - 365 Impairments of Oil and Gas Assets - - 20 10 - 30 Interest Expense 80 - 90 340 - 350 Other (Income) Expense (5) - 15 67 - 87 Federal Tax Rate 36% - 40% 35% - 37% Deferred Taxes (% of Total Taxes) -5% - 0% 5% - 10% - ---------------------------------------------------------------------- Avg. Shares Outstanding (MM) Basic 243 - 245 249 - 251 Diluted 245 - 247 251 - 253 $MM $MM ------------------ ------------------ Capital Investment 725 - 775 2,980 - 3,030 E&P (Cost Incurred) 663 - 705 2,725 - 2,767 Capitalized Direct Expenses 46 - 50 172 - 176 Capitalized Interest 16 - 20 83 - 87 CONTACT: Anadarko Petroleum Corporation, Houston Media Contacts: Teresa Wong, 832-636-1203 teresa_wong@anadarko.com or Lee Warren, 832-636-3321 lee_warren@anadarko.com or Margaret Cooper, 832-636-8355 margaret_cooper@anadarko.com or Investor Contacts: David Larson, 832-636-3265 david_larson@anadarko.com or Stewart Lawrence, 832-636-3326 stewart_lawrence@anadarko.com -----END PRIVACY-ENHANCED MESSAGE-----