investor relations - s3. · pdf fileinvestor relations john colglazier senior vice president...

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INVESTOR RELATIONS

John Colglazier

Senior Vice President 832/636-2306

Jeremy Smith

Director 832/636-1544

Shandell Szabo

Director 832/636-3977

ANADARKO PETROLEUM CORPORATION

NYSE: APC | www.anadarko.com

4th Quarter 2015 and Full-Year Highlights ..... 2

Overview ......................................................... 3

Rockies ........................................................... 4

Southern & Appalachia .................................. 6

Gulf of Mexico ................................................ 8

International & Frontier ................................ 11

Deepwater Rig Schedule ............................. 14

Glossary of Abbreviations ............................ 15

Fourth-Quarter 2015

OPERATIONS REPORT February 1, 2016

HEIDELBERG, GULF OF MEXICO

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FOURTH-QUARTER 2015 |OPERATIONS REPORT

FOURTH-QUARTER 2015 AND FULL-YEAR HIGHLIGHTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This presentation 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. While Anadarko believes that its expectations are based on reasonable assumptions as and when made, no assurance 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 presentation, including Anadarko’s ability to finalize year-end reserves, timely complete and commercially operate the projects and drilling prospects identified in this presentation, successfully, plan, secure necessary government approvals, finance, build and operate the necessary infrastructure and LNG park in Mozambique and achieve its production and budget expectations on its mega projects. Other factors that could impact any forward-looking statements are described in “Risk Factors” in the company’s 2014 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings and press releases. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

PRESERVING VALUE WITH U.S.

ONSHORE In 2015, Anadarko’s U.S. onshore team focused on increasing capital efficiency, reducing costs and providing flexibility for 2016.

Anadarko grew its divesture-adjusted U.S. onshore volumes by 4% in 2015 while decreasing its operated U.S. onshore rig fleet from an average of 37 rigs in 2014 to an average of 25 rigs in 2015 and exiting the year with 16 rigs.

Anadarko enhanced its Wattenberg wellbore design, which along with other efficiencies, allowed the company to reduce its Wattenberg drilling costs per foot by 50% and completion costs per well by approximately 32% in 2015 from 2014. The increased efficiencies allowed Anadarko to reduce its average rig count by almost half in Wattenberg in 2015 from 2014, while still drilling approximately 90% of the type-well equivalents.

The company exited 2015 with an inventory of approximately 230 iDUCs, primarily in Wattenberg, Eagleford and the Delaware Basin. The iDUCs increase Anadarko’s capital flexibility for 2016.

ACCELERATING VALUE THROUGH

PORTFOLIO MANAGEMENT In 2015, the company generated $2 billion from monetizations. During the 4

th quarter, the company

closed on the previously announced divestiture of its Powder River Basin CBM gas gathering system.

CREATING OPTION VALUE WITH

EXPLORATION In 2015, Anadarko drilled a successful appraisal well at Shenandoah in the Gulf of Mexico. The well encountered more than 620 net feet of oil pay and continued to progress the giant oil discovery toward development.

Offshore Colombia, Anadarko announced the play-opening discovery at Kronos, which encountered between 130 - 230 net feet of natural-gas pay and proved the presence of a working petroleum system.

DELIVERING HIGH-MARGIN MEGA

PROJECTS Anadarko achieved first oil at its Lucius development in the 1

st quarter of 2015, just over three years after

sanction. The 80,000-BOPD facility is Anadarko’s largest truss spar completed to date. Production reached nameplate capacity during the 2

nd quarter.

Anadarko achieved first oil at its Heidelberg development in the 1

st quarter of 2016, less than

three years from sanction. Heidelberg is the sister spar to Lucius.

The 80,000-BOPD TEN development off the coast of Ghana was more than 80% complete at the end of 2015 and is on track for first oil in the 3

rd quarter

of 2016. The TEN FPSO departed Singapore in January 2016. Upon the FPSO’s arrival in Ghana in the 1st quarter, the vessel will begin connecting to the risers and subsea infrastructure.

*Except as otherwise noted, volumes discussed in this report exclude production associated with EOR, Bossier and CBM to provide a “divestiture-adjusted” or “same-store” sales comparison. “Divestiture-adjusted” or “same-store” sales volumes are intended to present performance of Anadarko’s continuing asset base, giving effect to recent divestitures.

Lucius, Gulf of Mexico

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OVERVIEW

CAPITAL INVESTMENTS

4Q15

$MM

Rockies1 85

Southern & Appalachia 343

Lower 48 428

Alaska 16

Gulf of Mexico 187

Total U.S. 631

International 231

Midstream1,2

405

Capitalized Items/Other 46

Total Company 1,313

SALES VOLUMES

4Q15 4Q15 4Q15 4Q15 4Q14 4Q14 4Q14 4Q14

Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MMBOE Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MMBOE

Rockies 104 57 1,031 31 95 59 1,012 30

Southern & Appalachia 62 49 927 24 57 54 1,076 26

Lower 48 166 106 1,958 55 152 113 2,088 56

Alaska 9 - - 1 8 - - 1

Gulf of Mexico 54 6 115 7 47 6 179 8

Total U.S. 229 112 2,073 63 207 119 2,267 65

International* 87 6 - 9 80 10 - 8

Same-Store Sales 316 118 2,073 72 287 129 2,267 73

EOR, Bossier and CBM** - - (5) (1) 13 - 282 6

Total Company 316 118 2,068 71 300 129 2,549 79

*Quarterly sales volumes are influenced by size, timing and scheduling of tanker liftings. **The EOR divestiture closed in 2Q15, and the Bossier and CBM divestitures closed in 3Q15.

1. Reflects the reclass of $243MM associated with

the Wattenberg COSF to Midstream. 2. Includes WES capital investments of ~$120MM.

SALES VOLUMES Sales volumes for the 4

th quarter totaled 72

MMBOE, or 780,000 BOE/d, which was within guidance. U.S. oil volumes increased by approximately 2% from the 3

rd quarter of 2015

primarily due to the performance of Wattenberg and the Delaware Basin.

Full-year divestiture-adjusted sales volumes averaged 805,000 BOE/d, a 4% increase over 2014.

CAPITAL INVESTMENTS Fourth-quarter capital investments of $1.2 billion, excluding WES capital investments, were at the low end of guidance.

For the full year, Anadarko reduced its capital investments from 2014 by 36% to $5.36 billion, excluding $0.5 billion of capital investments made by WES.

RESERVES Anadarko replaced more than 130% of its production in 2015 by organically adding 407 million BOE of proved reserves, before the effects of price revisions, at competitive costs.

The company ended the year with estimated proved reserves of 2.06 billion BOE, with 79% being proved developed and 52% comprising liquids.

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ROCKIES

Anadarko’s Rockies assets delivered sales volumes averaging 333,000 BOE/d during the 4

th quarter, a 3%

increase from the 3rd

quarter. Oil volumes increased 9% from the 4

th quarter of 2014. The company

continued to make the economic decision to reject ethane, which equated to a net sales volumes reduction of 3.9 MMBOE.

Anadarko averaged seven operated rigs and drilled 89 wells in the 4

th quarter, with the majority of the

activity taking place in the liquids-rich Wattenberg field. This denotes an 86% drilling-efficiency improvement versus the 4

th quarter of 2014 when

Anadarko drilled 82 wells with 12 operated rigs in the region.

The company closed the sale of its CBM midstream assets in the Powder River Basin in the 4

th quarter.

SALES VOLUMES

4Q15 4Q15 4Q15 4Q15 4Q14 4Q14 4Q14 4Q14

Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MBOE/d Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MBOE/d

Wattenberg 95 45 532 229 85 43 400 195

Greater Natural Buttes 2 8 290 58 3 11 380 77

Other 7 4 212 46 7 5 232 51

Same-Store Sales 104 57 1,034 333 95 59 1,012 323

EOR and CBM* - - (3) - 13 - 208 48

Total 104 57 1,031 333 108 59 1,220 371

*The EOR divestiture closed in 2Q15 and the CBM divestiture closed in 3Q15.

CAPITAL

INVESTMENTS AVERAGE

RIG ACTIVITY

4Q15 4Q15 3Q15

$MM Operated Operated

Wattenberg1 21 5 6

Greater Natural Buttes

26 1 1

Other 38 1 1

Total 85 7 8

1. Reflects the reclass of $243MM associated with the Wattenberg COSF.

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Wattenberg:

During the 4th quarter, the Wattenberg field net

sales volumes increased by approximately 9,000 BOE/d or 4% compared with the 3

rd quarter of 2015

to an average of approximately 229,000 BOE/d. Oil sales volumes increased 12% year over year.

Anadarko began production from its 1,000th

operated HZ well in Wattenberg during the quarter.

Anadarko operated an average of five rigs and drilled 75 wells (96 type-well equivalents) during the 4

th quarter and exited 2015 with five rigs.

The company completed 68 wells in the 4th quarter

of 2015, a 34 well increase over the 3rd quarter.

The COSF is currently in recycle mode as construction is being completed. Commissioning is expected to occur in the 1

st quarter of 2016. This

facility should increase oil recoveries, enhance efficiencies of tank batteries, lower operating expenses and reduce impacts on the environment.

During the quarter, Saddlehorn (APC 20% equity interest) combined with Grand Mesa to form a single pipeline project, which enhances economics. The 20-inch pipeline is planned to deliver crude from the DJ Basin to Cushing, Okla., and is expected to be operational by mid-2016 with Saddlehorn’s initial capacity set at 190,000 BOPD.

Greater Natural Buttes:

The company operated one rig and drilled 11 wells in the 4

th quarter. Net natural gas sales volumes

averaged 290 MMcf/d for the quarter, flat compared to the prior quarter.

ROCKIES

Lancaster Plant, Colorado

MINERAL-INTEREST OWNERSHIP

In 2015, the company recorded revenues totaling approximately $460 million from its mineral-interest ownership in the Rockies, Southern & Appalachia and the Gulf of Mexico. Oil and natural gas royalties decreased by approximately 50% from 2014 due to lower commodity prices, while the hard-minerals royalties increased almost 7% to approximately $90 million.

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SOUTHERN & APPALACHIA

During the 4th quarter, the Southern & Appalachia

region delivered sales volumes of approximately 265,000 BOE/d, a 1% increase from the 3

rd

quarter of 2015.

Oil volumes grew almost 5% from the 3rd

quarter of 2015 and approximately 9% over the 4

th

quarter of 2014 driven by continued development in the Wolfcamp Shale in the Delaware Basin and through carried investments in the Eaglebine.

SALES VOLUMES

4Q15 4Q15 4Q15 4Q15 4Q14 4Q14 4Q14 4Q14

Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MBOE/d Oil

MBOPD NGLs

MBbl/d Gas

MMcf/d

MBOE/d

Eagleford 32 24 145 80 33 25 143 82

Delaware Basin 18 7 65 36 14 5 49 27

E. Texas/N. Louisiana 2 14 238 56 2 17 240 60

Chalk/Eaglebine 8 3 25 15 6 3 21 12

Marcellus - - 386 64 - - 546 91

Other 2 1 68 14 2 4 77 18

Same-Store Sales 62 49 927 265 57 54 1,076 290

Bossier* - - (2) - - - 73 12

Total 62 49 925 265 57 54 1,149 302

CAPITAL

INVESTMENTS AVERAGE

RIG ACTIVITY

4Q15 4Q15 3Q15

$MM Operated Operated

Eagleford 75 1 3

Delaware Basin 189 7 7

E. Texas/N. Louisiana 64 3 4

Chalk/Eaglebine - 1 1

Marcellus 11 - -

Other 4 - -

Total 343 12 15

*The Bossier divestiture closed in 3Q15.

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Delaware Basin:

Anadarko’s net sales volumes for the quarter averaged approximately 36,000 BOE/d, an increase of almost 4% from the 3

rd quarter of 2015.

Total liquids volumes averaged approximately 25,000 Bbl/d, which is an increase of 31% compared to the 4

th quarter of 2014.

The company averaged seven operated rigs, spud 20 wells and brought 21 Wolfcamp Shale operated wells on line during the 4

th quarter of 2015.

The company continued to drive down costs and achieved an 18% reduction in completion costs from the 3

rd quarter due to efficiency gains.

Anadarko continues to replicate the Wattenberg infrastructure model by integrating and expanding gathering and processing infrastructure for long-term growth and operational flexibility.

The Avalon Express North Extension was commissioned and placed in service during the quarter. The extension lowers the line pressures in north Loving County and increases take-away capacity by 60 MMcf/d.

Eagleford:

Anadarko’s net sales volumes averaged 80,000 BOE/d during the quarter, a 4% decrease from the 3

rd quarter of 2015. The decrease was primarily due

to a reduction in drilling activity.

Anadarko spud 14 wells utilizing one operated rig in the 4

th quarter.

The company achieved a record low average cost-per-drilling foot of $72 and an 8% sequential reduction in completion costs from design changes and efficiency gains.

East Texas/North Louisiana:

Anadarko’s net sales volumes averaged approximately 56,000 BOE/d during the 4

th quarter,

which was an increase of 4% compared to the 3rd

quarter of 2015.

The company averaged three operated rigs, spud two wells and brought eight wells on line during the quarter.

Eaglebine:

Anadarko’s net sales volumes averaged more than 3,000 BOE/d during the quarter, which was essentially flat to the 3

rd quarter of 2015.

Anadarko continued to focus on reducing costs and achieved a new record low of $119 average cost-per-drilling foot. Completion costs were down almost 11% in the quarter versus the prior quarter due largely to design changes.

At the end of the 4th quarter, Anadarko had

$331 million remaining on a $442 million carried interest agreement which could be used to fund development activities in 2016.

Marcellus:

Anadarko’s net sales volumes averaged approximately 386 MMcf/d during the 4th quarter and were impacted by voluntary curtailments.

SOUTHERN & APPALACHIA

Carthage, East Texas

Delaware Basin, Texas

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SALES VOLUMES*

4Q15

Oil MBOPD

4Q15

NGLs MBbl/d

4Q15

Gas MMcf/d

4Q15

MBOE/d

4Q14

Oil MBOPD

4Q14

NGLs MBbl/d

4Q14

Gas MMcf/d

4Q14

MBOE/d

Total 54 6 115 80 47 6 179 83

*Includes the impact of weather-related downtime.

GULF OF MEXICO

During the 4th

quarter, Anadarko’s Gulf of Mexico region averaged sales volumes of approximately 80,000 BOE/d, down 4% from the same period in 2014. Oil sales volumes increased 15% from the prior year.

Anadarko is currently operating four rigs in the Gulf of Mexico.

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DEVELOPMENT

Heidelberg:

GREEN CANYON 859/860/903/904/948 (APC WI 31.5%)

First oil began in the 1st quarter of 2016 from the

initial three subsea wells.

The company plans to drill two additional wells later in 2016 to further increase field production.

At the end of the 4th quarter, Anadarko had $67

million remaining on an $860 million carried interest agreement which could be used to fund development activities in 2016.

Caesar/Tonga:

GREEN CANYON 683/726/727/770 (APC WI 33.75%)

The sixth Caesar/Tonga well is being flow tested and is on schedule to come on line in the 1st quarter of 2016.

The seventh Caesar/Tonga well was near target depth at year end.

The Phase 2 development project is moving ahead with first oil anticipated by the end of 2017.

Independence Hub:

Gross production averaged 40 MMcf/d (37 MMcf/d net) during the quarter. The last producing well went off line in December 2015.

Independence Hub produced 1.3 TCF gross in 8.5 years, exceeding initial production expectations by approximately 30%. The project hit payout within 1.5 years of first production.

GULF OF MEXICO

Heidelberg, Gulf of Mexico

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GULF OF MEXICO

EXPLORATION/APPRAISAL

Shenandoah Basin:

WALKER RIDGE 51/52/53 (APC WI 30%, OPERATOR)

Following the success of the Shenandoah-4 sidetrack, which encountered more than 620 net feet of high-quality oil pay, the partnership successfully acquired more than 550 feet of whole core from the hydrocarbon-bearing reservoir interval.

The partnership plans to spud the Shenandoah-5 appraisal well during the 1st

quarter of 2016. The well is designed to confirm and extend reservoir boundaries.

Yeti:

WALKER RIDGE 117/157/158/159/160 (APC WI 37.5%)

The Yeti-3 appraisal well finished drilling during the 4th quarter. The partnership

successfully acquired more than 320 feet of whole core across the primary Miocene-aged reservoir intervals encountered in the Yeti discovery well. The partnership is currently evaluating potential development options for the Yeti discovery.

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INTERNATIONAL & FRONTIER

During the 4th quarter, the International

and Frontier region sales volumes averaged 102,000 Bbl/d.

The El Merk facility reached a significant milestone of 100 MMBbl cumulative gross production only 2.5 years after first production.

El Merk, Algeria

SALES VOLUMES

4Q15

MBbl/d

4Q14

MBbl/d

Alaska 9 8

Algeria* 74 80

Brazil - -

Ghana/W. Africa* 19 10

Mozambique - -

Other - -

Total 102 98

CAPITAL INVESTMENTS

4Q15

$MM

Alaska 16

Algeria 12

Brazil 5

Ghana/W. Africa 141

Mozambique 21

Other 52

Total 247

*Quarterly sales volumes are influenced by size, timing and scheduling of tanker liftings.

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DEVELOPMENT

Alaska:

Gross production from the Colville River Unit increased approximately 24% from the 3

rd quarter

of 2015 to 52,000 BOPD as the Alpine West satellite project began production.

Algeria:

Gross production averaged approximately 384,000 Bbl/d during the quarter, which was an increase of 12,000 Bbl/d over the 3

rd quarter of 2015. The

production increase was due to new wells brought on line at the HBNS facility and El Merk production increases following repairs to the dehydration system.

Ghana:

Gross production at the Jubilee field averaged approximately 106,000 BOPD during the 4

th

quarter. Production was up approximately 13,000 BOPD from the 3

rd quarter after the gas

compression system maintenance was successfully completed.

The GJFFDP and UEA were submitted to the Government of Ghana for approval in December. When approved, the GJFFDP and UEA will allow further development of the Jubilee Field and the development of the Mahogany and Teak complexes in the Greater Jubilee area.

The TEN development was more than 80% complete at the close of 2015. The fifth

well was

being completed at year-end and the remaining five wells are scheduled for completion before startup. The 80,000-BOPD project remains on schedule for first oil in the 3rd quarter of 2016.

Mozambique LNG:

OFFSHORE AREA 1 (APC WI 26.5%, OPERATOR)

The partnership executed a UUOA for the joint development of the straddling reservoir between Offshore Area 1 and Offshore Area 4 operated by ENI. The UUOA is subject to final approval by the Government of Mozambique.

Jubilee FPSO, Ghana

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EXPLORATION/APPRAISAL

Colombia:

FUERTE NORTE, FUERTE SUR, PURPLE ANGEL, COL 5 AND URA 4 (APC WI 50%, OPERATOR)

The Calasu-1 well tested a large four-way structure located approximately 100 miles north of Anadarko’s Kronos discovery. The well finished drilling during the 4

th quarter and encountered non-commercial quantities of pay.

BLOCKS COL 1, COL 2, COL 6 AND COL 7 (APC WI 100%, OPERATOR)

Phase I of the Esmeralda 3D survey, which is approximately 16,300 km², was completed during the 4

th quarter. Acquisition of Phase II of the Esmeralda 3D

survey, approximately 13,000 km2, is anticipated to commence during the 1

st

quarter of 2016.

Côte d’Ivoire:

BLOCK CI-103 (APC WI 65%, OPERATOR)

A rig is on location to begin a drilling and interference testing program during the 1

st quarter of 2016 as part of the continuing appraisal of the Paon discovery. The

program will also include additional appraisal drilling. The data from these operations are expected to provide insight on reservoir connectivity, deliverability, fluid properties and reservoir size. Positive results should advance the discovery toward commerciality.


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DEEPWATER RIG SCHEDULE

Bolette Dolphin Drillship Ocean BlackHornet Drillship

2016 2017 2018 2019 2020

Noble Bob Douglas Rowan Resolute Bolette Dolphin

Ocean BlackHawk Ocean BlackHornet

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GLOSSARY OF ABBREVIATIONS

APC: Anadarko Petroleum Corporation

Bbl/d: Barrels of Liquids per Day

BOE: Barrels of Oil Equivalent

BOE/d: Barrels of Oil Equivalent per Day

BOPD: Barrels of Oil per Day

CBM: Coalbed Methane

COSF: Centralized Oil Stabilization Facility

EOR: Enhanced Oil Recovery

FPSO: Floating, Production, Storage and Offloading Unit

GJFFDP: Greater Jubilee Full Field Development Plan

HBNS: Hassi Berkine Sud (South)

HZ: Horizontal

iDUC: Intentionally Drilled, Uncompleted Wellbore

Km: Kilometer

LNG: Liquefied Natural Gas

MBbl/d: Thousand Barrels of Liquids per Day

MBOE/d: Thousand Barrels of Oil Equivalent per Day

MBOPD: Thousand Barrels of Oil per Day

MM: Million

MMBbl: Million Barrels of Liquids

MMBOE: Million Barrels of Oil Equivalent

MMcf/d: Million Cubic Feet per Day

NGL: Natural Gas Liquid

TCF: Trillion Cubic Feet

TEN: Tweneboa, Enyenra and Ntomme

UEA: Unit Expansion Agreement

UUOA: Unitization and Unit Operating Agreement

WES: Western Gas Partners, LP (NYSE: WES)

WI: Working Interest

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