2015 Anadarko Investor Conference Call NYSE: APC | www.anadarko.com INVESTOR RELATIONS John Colglazier Senior Vice President 832/636-2306 Robin Fielder Director 832/636-1462 Jeremy Smith Director 832/636-1544 WATTENBERG FIELD, COLORADO Preserving Value & Positioning for the Future John Colglazier March 3, 2015 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Agenda NYSE: APC | www.anadarko.com Presenter Title Strategic Overview Al Walker Chairman, President and CEO Financial Discipline Bob Gwin EVP, Finance and CFO U.S. Onshore Chuck Meloy EVP, U.S. Onshore Exploration and Production International & Deepwater Operations Jim Kleckner EVP, International and Deepwater Operations International & Deepwater Exploration Bob Daniels EVP, International and Deepwater Exploration Closing Remarks Al Walker Chairman, President and CEO Q&A All 2 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Cautionary Language NYSE: APC | www.anadarko.com Regarding Forward-Looking Statements and Other Matters 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. 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 presentation, including Anadarko’s ability to meet financial and operating guidance, achieve its production targets, successfully manage its capital expenditures, consummate the transaction described in this presentation, timely complete and commercially operate the projects and drilling prospects identified in this presentation, achieve production and budget expectations on its mega projects, and successfully plan, secure necessary government approvals, finance, build, and operate the necessary infrastructure and LNG park. See “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. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements. Please also see our website at www.anadarko.com under “Investor Relations” for reconciliations of the differences between any non-GAAP measure used in this presentation, the appendix slides or the most directly comparable GAAP financial measures. Also on our website at www.anadarko.com is a glossary of terms. Cautionary Note to Investors - The U.S. 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. We may use terms in this presentation, such as “resources,” “net resources,” “net discovered resources,” “gross resource,” “estimated recoverable resources,” “discovered resource opportunity,” “relative net resources,” “net resource potential,” and similar terms that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2014, File No. 001-08968, available from us at www.anadarko.com or by writing us at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 1-800-SEC-0330. 3 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
NYSE: APC | www.anadarko.com INVESTOR RELATIONS John Colglazier Senior Vice President 832/636-2306 Robin Fielder Director 832/636-1462 Jeremy Smith Director 832/636-1544 LUCIUS SPAR, GULF OF MEXICO Preserving Value & Positioning for the Future Al Walker A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating Performance NYSE: APC | www.anadarko.com Proven Successful Track Record Deep and Balanced Portfolio Best-in-Class Capital Allocation Distinct Competitive Advantages Active Portfolio Management Production Exploration 5 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating 5-Year Track Record NYSE: APC | www.anadarko.com Adjusted Divestiture-Adjusted 8+% $4.5+ Billion Free Sales-Volume Cash Flow Growth 160+% Reserve ~$15/BOE F&D Replacement Net Deepwater ~65% ~4 BBOE 160+% Reserve Discovered Exploration/Appraisal Replacement Resources Success ~$12.5 Billion Asset Monetizations Note: See appendix slides for definitions/reconciliations of non-GAAP financial measures 6 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating Depth & Quality NYSE: APC | www.anadarko.com 8+ BBOE Lower-Risk Top-Tier U.S. Onshore Activation Costs: ~$35,000 per Flowing Barrel Resources Provide Relative Net Resources Predictability Visible Pipeline of High-Impact Mega Projects Exploration Optionality Advantaged Maintenance Capital* Provides Portfolio Flexibility Shales Mozambique GNB Other U.S. Wattenberg GOM Other Int'l E&P CapitalAllocation (Billions) $8 $2.0 $2.1 $1.9 $2.9 ~$2.4 $1.6 $4 $1.8 $2.0 $1.3 $3.0 - 3.2 $1.1 Maintenance $0.5 Capital $2.9 $2.9 $2.5 $2.2 $2.0 $0 2010 2011 2012 2013 2014 2015E Maintenance Capital Short Cycle Growth Capital Mid & Long-Cycle Capital Liquids Mix 39% ~50% * Maintenance capital is defined as capital investments necessary to keep current-year sales volumes flat to previous year 7 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating Capital-Allocation Approach NYSE: APC | www.anadarko.com Align Capital Investments with Anticipated Cash Inflows Maintain Flexibility with Short-Cycle U.S. Onshore Opportunities Leverage Midstream Advantage Advance Mid-Cycle Mega Projects Continue to Invest in Long-Cycle Exploration Short Cash Cycle Mid Cash Cycle Long Cash Cycle <1 Year 1 - 3 Years 3+ Years 8 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating Advantages NYSE: APC | www.anadarko.com World-Class Exploration Provides Portfolio Option Value Industry-Leading Enhances Project Value Project Management Integrated Midstream Approach Maximizes Upstream Value Extensive Minerals-Interest Drives Value & Efficiencies Ownership Active Portfolio Management Accelerates Cash Cycle & Value 160+% Reserve Replacement 9 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Differentiating Portfolio Management NYSE: APC | www.anadarko.com Ongoing Commitment to Accelerate Value and Reduce Portfolio Complexity ~$12.5 Billion in Monetizations 2010 - 2014 ~$6 Billion Divestitures $5+ Billion Carried-Interest Agreements $1+ Billion Exploration Farm-Downs $3+ Billion Inflows from WES and WGP to Date $700+ Million Divestiture Already in 2015 $4.8 $5.0 Monetizations* (Billions) $2.6 $2.5 $1.8 $1.7 $1.4 Mozambique ~$2.6 China ~$1.1 Heidelberg JV ~$0.9 Vito ~$0.5 Lucius JV ~$0.6 Marcellus JV ~$1.4 Eagleford JV ~$1.6 Pinedale/Jonah ~$0.6 Eaglebine JV ~$0.4 Salt Creek JV ~$0.4 Other ~$0.3 Other ~$0.2 Other ~$0.7 Other ~$0.6 Other ~$0.4 $0.0 2010 2011 2012 2013 2014 *Does not include WES/WGP transactions 10 A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Preserving Value & Positioning for the Future NYSE: APC | www.anadarko.com Maintain Portfolio Flexibility to Accelerate as Returns Improve Focus on Driving Efficiencies and Cost Savings Exercise Financial Discipline Continue to be an Active Portfolio Manager LUCIUS SPAR, GULF OF MEXICO 11 A N A D A R K O P E T R O L E U M C O R P O R A T I O N A N A D A R K O P E T R O L E U M C O R P O R A T I O N
2015 Initial Expectations NYSE: APC | www.anadarko.com 2015 Expectations ~5% YOY Oil Sales-Volume Growth Sales Volumes (MMBOE)** 295 - 301 Minimal Incremental Cost Savings Assumed Capital (Billions) 1 $5.4 - $5.8 40% U.S. Onshore Rig Count Reduction Reserve Replacement 2 100+% ~125 Deferred U.S. Onshore Well Completions F&D ($/BOE) 2 ~ $20 1 Does not include WES capital investments 2 Does not include potential Mozambique reserve adds Preserving Value over Near-Term Growth 320 308 - 314 4 Sales Volumes 9 MMBOE 301 295 - 301 275,000 ~289,000 Daily Oil Daily Oil Sales Sales 280 2014 Divestiture 2015E** Ethane Rejection Anticipated Completion 2015 Budget Adjusted* Assumption Deferrals Productive Capacity** * See 2014 divestiture-adjusted table attached to 3/3/2015 capital and guidance release 12 ** Net of anticipated weather and facility downtime A N A D A R K O P E T R O L E U M C O R P O R A T I O N
Flexible Capital Allocation Preserves Value NYSE: APC | www.anadarko.com 2015 Capital Expectations: $5.4 - $5.8 Billion* Corporate ~3% Short Cash Cycle Mid Cash Cycle Long Cash Cycle ~55% ~30% ~12% <1 Year 1 - 3 Years 3+ Years Wattenberg Generates 30+% BTAX Build Foundation for Wolfcamp Progress Mozambique LNG ROR at Strip Prices Growth Advance Shenandoah to Eagleford Generates 20+% BTAX Add Incremental Oil at K2 and Development ROR at Strip Prices Caesar/Tonga Advance Paon Commerciality Leverage Midstream Advantage Advance Heidelberg and TEN Test Play-Opening Prospects in Mega Projects for 2016 Start Colombia, Kenya and GOM 13 * Does not include WES capital investments A N A D A R K O P E T R O L E U M C O R P O R A T I O N
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