Profile: Anadarko Petroleum Corporation (APC.N)

Anadarko Petroleum Corporation (Anadarko) is an independent oil and gas exploration and production company with 2.28 billion barrels of oil equivalent (BOE) of proved reserves as of December 31, 2008. The Company operates in three segments: oil and gas exploration and production, which explores for and produces natural gas, crude oil, condensate and natural gas liquids (NGLs); midstream, which is engaged in gathering, processing, treating and transporting Anadarko and third-party oil and gas production, and marketing, which sells most of Anadarko’s production, as well as commodities purchased from third parties. The Company’s major areas of operation are located onshore in the United States, the deepwater of the Gulf of Mexico and Algeria. Anadarko also has production in China and exploration programs in several other countries, including Ghana and Brazil. In December 2008, Anadarko completed the sale of its 50% interest in the Peregrino heavy-oil field offshore Brazil to StatoilHydro. In 2008, the Company divested certain oil and gas properties, primarily in Brazil, onshore in the United States and the Gulf of Mexico.

Oil and Gas Properties and Activities

As of December 31, 2008, Anadarko had proved reserves of 8.1 trillion cubic feet (Tcf) of natural gas and 0.9 billion barrels of crude oil, condensate and NGLs. Anadarko's active areas in the United States include the Lower 48 states, Alaska and the deepwater Gulf of Mexico. Reserves in the United States comprised 90% of Anadarko's total proved reserves during the year ended December 31, 2008. During 2008, the Company's drilling efforts in the United States resulted in 2,645 natural gas wells, 149 oil wells and 19 dry holes. In 2008, about 75% of the Company’s proved reserves were located onshore in the Lower 48 states. Anadarko’s properties in the Rockies are located in Colorado, Utah and Wyoming. In the Greater Natural Buttes field, located in the Uinta basin of northeast Utah, the Company is primarily focused on development of the Wasatch and Mesa Verde formations through infill drilling operations and drilling additional wells adjacent to existing producing wells. Anadarko operates approximately 1,500 wells in the Greater Natural Buttes field area and has an interest in approximately 900 non-operated wells. The Wattenberg natural gas and condensate field is located in the Denver-Julesburg basin in northeast Colorado. Anadarko operates approximately 4,200 wells and has an interest in approximately 300 non-operated wells in the Wattenberg field.

During 2008, the Company was active in the Wamsutter and Moxa tight gas fields, which are located in the Greater Green River basin (GGRB) area of southern Wyoming. Anadarko operates approximately 700 wells and has an interest in approximately 2,200 non-operated wells in the Wamsutter and Moxa fields. The Company’s non-operated Pinedale asset is located in the GGRB in southwest Wyoming. The gas produced at Pinedale is transported through Company-owned gathering systems that deliver gas to an Anadarko processing facility located on the Land Grant. Anadarko has an interest in approximately 900 producing wells in the Pinedale field. The Company’s CBM operations are primarily located in the Powder River basin in northeast Wyoming, but include activity on the Wyoming portion of the Land Grant at the Atlantic Rim in southern Wyoming, and in the Helper and Clawson fields in Utah. Anadarko operates approximately 4,600 shallow CBM wells and has an interest in approximately 5,200 outside-operated CBM wells in the Rockies.

Anadarko’s properties in the Southern Region are located primarily in Texas with a focus on natural gas plays. During 2008, production and development activities at the Company’s properties in the east Texas area were concentrated in the Bossier and Carthage areas with the Company drilling 22 wells in the Bossier area and 121 wells in the Carthage area. Other areas in the Southern Region include properties in South Texas and in the Hugoton field. In South Texas, the Company had an active drilling program in Starr and Hidalgo counties, during 2008. The Hugoton field in southern Kansas has over 1,200 producing gas wells.

Anadarko’s activity in Alaska is concentrated primarily on the North Slope. During 2008, approximately 2% of the Company’s proved reserves were in Alaska. In 2008, about 13% of the Company’s proved reserves were located offshore in the deepwater Gulf of Mexico where Anadarko owns an average 64% working interest in 596 blocks and has access to an additional 22 blocks through participation agreements.

The Company is engaged in exploration, development and production activities in Algeria’s Sahara Desert. During 2008, about 9% of the Company’s proved reserves were located in Algeria where a total of nine fields discovered by the Company were on production. In 2008, net sales volumes from the Company’s properties in Algeria represented 10% of the Company’s total sales volumes. During 2008, Anadarko participated in 11 development wells. Anadarko’s interest in the Production Sharing Agreement (PSA) for Blocks 404 and 208 is 50% before participation at the exploitation stage by Sonatrach, the national oil and gas company of Algeria. The Company has two partners, each with a 25% interest, also prior to participation by Sonatrach. At December 31, 2008, Anadarko had 83 million barrels of proved undeveloped reserves in Algeria.

Anadarko’s other international oil and gas production and/or development operations are located primarily in China. The Company has exploration acreage in China, Brazil, Ghana, Indonesia and other selected areas. About 1% of the Company’s proved reserves were located in these other international locations during 2008. During 2008, net sales volumes from the Company’s other international properties accounted for 3% of the Company’s total sales volumes. In 2008, Anadarko drilled 17 wells in other international areas.

During 2008, net production from China was approximately 14 million barrels of oil per day. Anadarko holds exploration interests in several blocks located offshore in the Campos and Espirito Santo basins. Anadarko drilled two wells in 2008 in these areas, Wahoo and Serpa. The Jubilee field lies partly in the West Cape Three Points block (non-operated, 31% interest) and partly in the Deep Tano block (non-operated, 18% interest). In 2008, the Company drilled three additional wells on the blocks. Anadarko has a participating interest in approximately 4.1 million exploration acres in Indonesia. Anadarko also has exploration projects in Mozambique, Liberia, Sierra Leone and several other countries in West Africa, as well as activities in other potential exploration and new venture areas overseas.

The Company’s 2008 drilling program focused on proven and emerging oil and natural gas basins in the United States (Lower 48 states, Alaska and Gulf of Mexico), Algeria and other countries where it holds acreage. Exploration activity consisted of 28 gross completed wells, including 21 wells in the Lower 48 states, two wells in Alaska, two wells offshore in the Gulf of Mexico, two wells in Algeria and one well in other international locations. Development activity consisted of 2,810 gross completed wells, which included 2,774 wells in the Lower 48 states, nine wells in Alaska, five wells offshore in the Gulf of Mexico, 11 wells in Algeria and 11 wells in other international locations.

Midstream Properties and Activities

Anadarko invests in midstream (gathering, treating and processing) facilities to complement its oil and gas operations in regions where the Company has natural gas production. Anadarko’s midstream business provides gathering, treating and processing services for third-party customers, including independent producers. Anadarko generates revenues in its gathering, treating and processing activities through various fee structures that include fixed-rate, percent of proceeds, or keep-whole agreements. The Company owns and operates natural gas gathering, treating and processing systems in the United States.

Marketing Activities

The Company’s marketing activities include managing the sales of its natural gas, crude oil and NGLs. The Company sells natural gas under a variety of contracts. The Company also engages in sales of greenhouse gas emission reduction credits (ERCs) derived from carbon dioxide injection operations in Wyoming. The Company markets natural gas, oil and NGLs in the United States, and markets oil from Algeria and China.