Anadarko Announces First-Quarter 2014 Results

Increases Midpoint of 2014 Sales-Volume Guidance by 3.5 Million BOE

HOUSTON, TX--(Marketwired - May 5, 2014) - Anadarko Petroleum Corp. (NYSE: APC) today announced its financial and operating results for the first quarter of 2014, including a first-quarter net loss attributable to common stockholders of $2.669 billion, or $5.30 per share (diluted). The net loss includes certain items typically excluded by the investment community in published estimates, which in aggregate decreased net income by $3.308 billion or $6.56 per share (diluted) on an after-tax basis,⁽¹⁾ including both a contingent loss of $4.018 billion associated with the Tronox Adversary Proceeding settlement agreement and a $946 million gain associated with the sale of a portion of Anadarko's interest in Offshore Area 1 in Mozambique. Cash flow from operating activities in the first quarter of 2014 was $1.729 billion, and discretionary cash flow totaled $2.523 billion.⁽²⁾

FIRST-QUARTER 2014 HIGHLIGHTS

• Delivered record daily sales volumes of 819,000 barrels of oil equivalent (BOE) per day, highlighted by a same-store-sales increase of approximately 69,000 BOE per day (12 percent) from the U.S. onshore relative to the first quarter of 2013⁽³⁾
• Achieved startup of the Lancaster cryogenic plant and Front Range pipeline, facilitating continued growth of Anadarko's Wattenberg field in Colorado
• Announced a $1.075 billion China divestiture and closed both the $2.64 billion sale of a portion of its interest in Mozambique's Offshore Area 1 and the $581 million Pinedale/Jonah divestiture
• Installed the topsides, umbilicals and export pipelines at the Lucius spar in the Gulf of Mexico

"Our operating performance during the first quarter was outstanding, delivering record sales volumes that were above the high end of the guidance," said Al Walker, Anadarko Chairman, President and CEO. "Our people and portfolio continue to demonstrate the ability to deliver sustained growth and, with the uncertainty associated with the Tronox litigation largely behind us, we have the confidence and flexibility to further accelerate growth. We are raising the midpoint of our full-year sales-volume guidance by 3.5 million BOE, with only a modest increase in our capital program. We also continue to actively manage our portfolio and evaluate other means to drive shareholder value."

OPERATIONS SUMMARY
During the first quarter, Anadarko's U.S. oil sales volumes were approximately 10,000 barrels per day above the midpoint of guidance, primarily driven by growth in the Wattenberg field, Eagleford Shale and Delaware Basin. Anadarko's first-quarter 2014 sales volumes of natural gas, crude oil and natural gas liquids (NGLs) totaled 74 million BOE, or an average of 819,000 BOE per day, including 17,000 BOE per day associated with the announced or closed divestitures of the company's interests in China's Bohai Bay and Wyoming's Pinedale/Jonah area.

The Wattenberg field achieved a 19,000-barrels-per-day increase in liquids volumes over the first quarter of 2013, representing a 30-percent year-over-year increase. The Eagleford Shale also contributed to the first-quarter growth with a 46-percent year-over-year increase in liquids sales volumes, more than half of which was oil. The Delaware Basin, which includes the company's increased activity in the Wolfcamp Shale, provided a 6,000-barrels-per-day increase in liquids sales volumes.

Anadarko also continued to advance its deepwater mega projects in the Gulf of Mexico, as it successfully installed the topsides at the Lucius spar and has nearly completed construction on the hull of the Heidelberg spar. Both projects remain on schedule and on budget with first oil anticipated in the second half of 2014 and in 2016, respectively.

In Mozambique, successful appraisal drilling activities in the Orca field increased the total estimated recoverable resources in Anadarko's Offshore Area 1 to a range of 50 to 70-plus trillion cubic feet of natural gas. In addition, Anadarko continued to advance the Mozambique LNG project by adding incremental non-binding LNG off-take agreements.

OPERATIONS REPORT
For details on Anadarko's operations and exploration program, including detailed tables illustrating same-store sales information, please refer to the comprehensive report on first-quarter 2014 activity. The report is available at www.anadarko.com.

FINANCIAL SUMMARY
Subsequent to quarter end, Anadarko announced a $5.15 billion settlement agreement in the Tronox Adversary Proceeding, representing a principal sum of approximately $3.98 billion plus interest. The settlement agreement is subject to recommendation by the Bankruptcy Court, approval by the District Court, and the issuance of an injunction barring similar claims from being asserted by third parties.

"During the quarter, we generated more than $2.5 billion of discretionary cash flow, closed the Mozambique and Pinedale/Jonah transactions and ended the quarter in a very strong financial position with approximately $6 billion of cash on hand, plus access to our $5 billion revolving credit facility," said Anadarko Executive Vice President, Finance and CFO, Bob Gwin. "The strength of our balance sheet, high-margin cash-generating capability and proceeds from asset monetizations provide the capability to fund the Tronox settlement, along with the flexibility to expand our robust 2014 capital program and support additional methods to enhance value."

CONFERENCE CALL TOMORROW AT 8 A.M. CDT, 9 A.M. EDT
Anadarko will host a conference call on Tuesday, May 6, 2014, at 8 a.m. Central Daylight Time (9 a.m. Eastern Daylight Time) to discuss first-quarter results, current operations and the company's outlook for the remainder of 2014. The dial-in number is 855.812.0464 in the United States or 970.300.2271 internationally. The confirmation number is 23315867. For complete instructions on how to participate in the conference call, or to listen to the live audio webcast and slide presentation, please visit www.anadarko.com. A replay of the call will be available on the website for approximately 30 days following the conference call.

FINANCIAL DATA
Nine pages of summary financial data follow, including current hedge positions and updated financial and production guidance.

⁽¹⁾ See the accompanying table for details of certain items affecting comparability.

⁽²⁾ See the accompanying table for a reconciliation of GAAP to non-GAAP financial measures and a statement indicating why management believes the non-GAAP financial measures provide useful information for investors.

⁽³⁾ See the accompanying table for a reconciliation of same-store sales. "Same-store" sales volumes are intended to present performance of Anadarko's continuing asset base, giving effect to recently announced or closed divestitures.

Anadarko Petroleum Corp.'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 2013, the company had approximately 2.79 billion barrels-equivalent of proved reserves, making it one of the world's largest independent exploration and production companies. For more information about Anadarko and APC Flash Feed updates, 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. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this news release, including court approval of the settlement agreement related to the Tronox Adversary Proceeding, issuance of the injunction and dismissal with prejudice of the claims asserted in the Adversary Proceeding, Anadarko's ability to consummate the transaction described in this news release, achieve its production targets, successfully manage its capital expenditures, achieve production and budget expectations on its mega projects, and to successfully plan, secure necessary government approvals, finance, build and operate the necessary infrastructure and LNG park. See "Risk Factors" in the company's 2013 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

Cautionary Note to Investors: The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms. Anadarko uses certain terms in this news release, such as "recoverable resources" and similar terms that the SEC's guidelines strictly prohibit Anadarko from including in filings with the SEC. Investors are urged to consider closely the disclosure in Anadarko's Form 10-K for the year ended Dec. 31, 2013, File No. 001-08968, available from Anadarko at www.anadarko.com or by writing Anadarko at: Anadarko Petroleum Corp., 1201 Lake Robbins Drive, The Woodlands, Texas 77380, Attn: Investor Relations. This form may also be obtained by contacting the SEC at 1-800-SEC-0330.

Reconciliation of GAAP to Non-GAAP Measures

Below are reconciliations of cash provided by operating activities (GAAP) to discretionary cash flow from operations (non-GAAP), free cash flow (non-GAAP), as well as net income (loss) attributable to common stockholders (GAAP) to adjusted net income (loss) (non-GAAP) as required under Regulation G of the Securities Exchange Act of 1934. Management uses discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes certain fluctuations in assets and liabilities and current taxes related to certain items affecting comparability. Management uses free cash flow to demonstrate the Company's ability to internally fund capital expenditures and to service or incur additional debt. Management uses adjusted net income (loss) to evaluate the Company's operational trends and performance.

Presented below is a reconciliation of total debt (GAAP) to net debt (non-GAAP). Management uses net debt as a measure of the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.