anadarko petroleum 1q08 operations report

Investor Relations:

John ColglazierVice [email protected]

Chris Campbell, [email protected]

Operations Report2008 ANADARKO PETROLEUM CORPORATION

First Quarter

Forward Looking Statement . . . 2

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

Gulf of Mexico . . . . . . . . . . . . . . . . . . 4-8

Rockies. . . . . . . . . . . . . . . . . . . . . . . . 9-10

Southern . . . . . . . . . . . . . . . . . . . . . 11-12

International / Frontier . . . . . . 13-15

NYSE:APC www.anadarko.com

NYSE:APC www.anadarko.com 2

First Quarter 2008 ANADARKO PETROLEUM CORPORATION

Forward Looking Statement

This report 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. Anadarko cannot guarantee that it will successfully execute on its drilling and development plans or meet its production guidance. See “Risk Factors” in the company’s 2007 Annual Report on Form 10-K and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.



Overview

– RIG ACTIVITY –

– CAPITAL SPENDING –

– VOLUMES –

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The capital program totaled $1,056 million during the quarter, of which $782 million (74%) was dedicated to ongoing U.S. E&P activity. Full-year capital expenditures are expected to be between $4.9 and $5.1 billion with approximately 20% allocated to exploration.

stProduction volumes for the 1 Qtr were 53 MMBOE, which exceeded guidance (50-52 MMBOE).

Rockies

Southern

LOWER 48

Alaska

Gulf of Mexico

TOTAL U.S.

INTERNATIONAL

Midstream

Capitalized Items / Other

TOTAL COMPANY

1Q08

$ MM

307

189

496

31

255

782

102

135

37

1,056

4Q07

$ MM

Capital Spending

309

158

467

17

221

705

99

133

60

997

Rockies

Southern

LOWER 48

Alaska

Gulf of Mexico

TOTAL U.S.

INTERNATIONAL

TOTAL COMPANY

Total

75

32

107

4

8

119

8

127

Non-Operated

1Q08 Rig Activity

51

7

58

2

2

62

6

68

Operated

24

25

49

2

6

57

2

59

MMcf/d MBbl/d MMcf/d MBbl/d

GasGas

1Q08Net Volumes

Rockies

Southern

LOWER 48

Alaska

Gulf of Mexico

TOTAL U.S.

INTERNATIONAL

Midstream

Other

TOTAL COMPANY

909

589

1,498

0

522

2,020

0

-7

0

2,013

4Q07

Liquids Liquids

970

564

1,534

0

604

2,138

0

-4

3

2,137

41

23

64

22

68

154

83

3

0

240

45

24

69

20

70

159

68

2

0

229



Gulf of Mexico

T E X A S L O U I S I A N ANew Orleans

IndependenceHub

K2 Complex

Constitution

Baldpate

Nansen

APC acreage

APC facilitiesRed Hawk

Gunnison

Boomvang

Updip of HKO

HKO to LKO

Upside

Undrilled Potential

Anadarko WI

Flowlines

2008 Down-Dip Locations

K2 UnitAPC WI: 42%

MarcoPolo

Blind Faith

– PRODUCING PROPERTIES –

K2 Complex

Green Canyon 561/562/605/606/518/563/607 (APC 42% WI)Green Canyon 608 (Marco Polo Field - APC 100% WI Suprasalt)

At the K2 complex, we have completed drilling the Green Canyon 561 #2 development well. This down-dip appraisal well helped define the extent of the oil-bearing reservoirs that are present in the unit's six producing wells and also encountered new off-structure, oil-bearing sands. The well is currently being side-tracked to further evaluate the extent of these sands.

We continue to analyze our options for enhanced oil recovery (EOR) and anticipate making a recommendation to partners on the optimum technique for the field by year end.

Another down-dip well, GC 606 #1, is expected to commence drilling following activities on GC 561 #2.

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MMcf/d MBbls/dMMcf/d MBbls/d

4Q071Q08

Net Volumes

TOTAL 604 70 522 68



Gulf of Mexico

Jubilee

Vortex

Mondo NW Atlas NW

Atlas

Cheyenne

SpidermanSan Jacinto

Q

Merganser

Jubilee

Vortex

Mondo NW Atlas NW

Atlas

Cheyenne

SpidermanSan Jacinto

Q

Merganser

IndependenceHub

– PRODUCING PROPERTIES (CONT.) –

Independence Hub

Boomvang

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With 15 wells producing, the Anadarko-operated Independence Hub exceeded expectations with gross production averaging 841 MMcf/d

st(444 MMcf/d net to Anadarko) in the 1 Qtr.

The Cheyenne #3 well (LL 399 #3, APC 100% WI) was drilled to a sttotal depth of 19,344 feet and completed in the 1 Qtr. The well is being

tied back to the Independence Hub facility and is expected to begin ndproducing in the 2 Qtr.

Since early April, production on the hub has been shut-in due to a leak in the third-party-owned export pipeline. Estimated repairs are scheduled to be completed by mid-May, and we expect to ramp-up production shortly thereafter.

East Breaks 643/642/688 (APC 30% WI)East Breaks 598 (APC 100% WI)East Breaks599 (APC 33% WI)

stThe East Breaks 688 #6 ST well was drilled and completed in the 1 Qtr, encountering pay sands in the BS-27 and BS-30 sand intervals. The well is expected to be tied back to the Boomvang spar and begin

ndproduction in the 2 Qtr.



Gulf of Mexico

– PRODUCING PROPERTIES (CONT.) –

Nansen Gunnison

Conger

Ticonderoga

Red Hawk

East Breaks 558/602/646/689/690 (APC 50% WI) Garden Banks 667/668/669 (APC 50% WI)

stFour satellite wells at Northwest Nansen were hooked up to the During the 1 Qtr, Anadarko drilled and began completion operations th stNansen spar in the 4 Qtr of 2007 and began production in the 1 Qtr on a new development well, GB 677 #2, in the Gunnison field. The

of 2008. well encountered multiple pay horizons, and first production is ndexpected in the 2 Qtr.

A two-well recompletion program was initiated and is expected to be nd

completed in the 2 Qtr.

A two-well satellite program to the southeast of the Nansen spar Garden Banks 215 (APC 25% WI)stbegan during the 1 Qtr. Both wells are planned to be tied back to the

stNansen spar and begin production in the 1 Qtr of 2009. Anadarko will participate in a recompletion operation on the Conger nd rd#8 well beginning in the 2 Qtr. Production is expected during the 3

Qtr.

Green Canyon 768 (APC 50% WI)

The connection of the GC 768 #3 and #1 ST 4 wells to the Garden Banks 877 (APC 50% WI)Constitution spar (APC 100% WI) were completed, and the wells were

st stbrought on line during the 1 Qtr. Recompletion operations on the GB 877 #1 ST 2 well began in the 1 nd

Qtr and are expected to conclude in the 2 Qtr.

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Gulf of Mexico

– MAJOR DEVELOPMENTS –

Power Play Blind Faith

Caesar / Tonga Complex

Garden Banks 258/302 (APC 45% WI) Mississippi Canyon 695/696 (APC 25% WI)

Platform modifications, flowline fabrication and installation The Blind Faith (Chevron-operated) semi-submersible production continue to be on schedule for Anadarko's Power Play discovery. platform sailed from Ingleside, Texas, to its final location on

stPower Play will be a subsea tieback to the Baldpate facility and is Mississippi Canyon 650 in the 1 Qtr. Mooring, platform and pipeline ndexpected to be on line late in the 2 Qtr. installation and commissioning continue for an expected start up in

ndthe 2 half of 2008. The facility is currently being upgraded to a capacity rating of 70,000 BOEPD.

Green Canyon 683 (APC 20% WI)Green Canyon 726/727/770 (APC 37.5% WI)

Progress continues on development of the Caesar / Tonga complex. Detailed reservoir simulation and subsea concept-validation work

stoccurred in the 1 Qtr. In addition, unitization discussions were initiated with agreement that a phased development to the Constitution spar (APC 100% WI) is the preferred option.

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Gulf of Mexico

T E X A S L O U I S I A N ANew Orleans

West Tonga

Sturgis North

Blind Faith

Green Bay

APC acreage

Exploratory Drilling

Major Developments

Caesar

– EXPLORATION –

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Anadarko was the apparent high bidder on 20 deepwater tracts in the Central and Eastern Gulf of Mexico Oil and Gas Lease Sales 206 and 224. Bidding alone and with partners, the company was successful on 20 total bids, representing an expenditure of $143 million net to Anadarko. The bids are subject to approval by the U.S. Interior Department's Minerals Management Service. The company's winning bids were primarily focused on high-impact, drillable targets in the Miocene fairway.

The Green Bay prospect (Walker Ridge 372 #1), which spud in December 2007, reached a total depth of 30,516 feet in March. The well, which targeted the Lower Tertiary, has been plugged and abandoned. Anadarko was the operator with a 25% working interest, with partners StatoilHydro (40% WI), Devon Energy (23.4% WI), ConocoPhillips (10% WI) and Nippon Oil Exploration U.S.A. (1.6% WI).

Anadarko is currently drilling the Sturgis North #1 (Atwater Valley 138), which spud in early February with a middle Miocene target. The well is drilling in 3,431 feet of water, with a proposed total depth of 31,500 feet. Anadarko and partners Chevron (operator), StatoilHydro and Devon Energy each hold a 25% working interest in the well.



Rockies

Monell

HelperWattenberg

Atlantic Rim

GreaterNatural Buttes

Pinedale

Wamsutter

Salt Creek

Powder River CBM

Tight Gas CBMEOR

MonellMoxa

TIGHT GAS

Wattenberg

Pinedale

Wamsutter

Other

CBM

EOR

TOTAL

Natural Buttes

1Q08

$ MM

Capital


4Q071Q08

Net Volumes

96

69

28

14

18

50

32

307

219

165

69

82

84

348

3

970

3

17

1

8

5

0

11

45

182

172

77

72

102

300

4

909

2

16

1

6

3

1

12

41

Oper. Non-Op. Expl. Dev.

1Q081Q08

Rig Activity Completed WellsGross

8

6

0

1

1

7

1

24

3

1

23

7

3

14

0

51

0

0

0

0

0

0

0

0

89

111

33

27

19

239

2

520

– TIGHT GAS DEVELOPMENT –

Greater Natural Buttes

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The Greater Natural Buttes area continued to set production records. A new gross single-day operated production record of 280 MMcf/d was achieved during the quarter.

52 operated wells were spud and 65 operated wells were completed during the quarter.

All 16 wells on the 10-acre White River pad have been drilled, with completion activities ongoing. This innovative project was awarded the Earth Day Award from the Utah Division of Oil, Gas and Mining for Environmental and Technical Excellence.

As a result of 10-acre potential and 20-acre performance, the team increased total resource estimates for the field by 2.3 Tcfe to 9.2 Tcfe.



Rockies

Wattenberg

Pinedale

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Activity at the Wattenberg field in Colorado continued at a brisk pace, Anadarko and its JV partner Williams drilled a combined 109 wells in stdrilling 74 gross operated wells and performing a record 247 frac jobs the Powder River Basin during the 1 Qtr 2008. The company plans to

for the quarter. The six-rig program is expected to grow to eight by the drill or participate in more than 900 wells (530 operated) during 2008.end of the summer.

Performance from the Big George Coals continues to exceed expectations with indications of shorter dewatering time and earlier first gas in the Anadarko-operated Powder Valley and Williams Draw

Anadarko (10% WI) participated in drilling 67 non-operated wells units.during the quarter.

Ongoing field-compression expansion and midstream projects, stIn the 1 Qtr, Questar received regulatory approval for a 5-acre pilot. including the installation of the Big George Line and County Line

In December 2007, Ultra's 5-acre pilot was also approved. This is amine treatment facilities, are expected to have a positive volume expected to increase the overall field recovery and add to Anadarko's impact over the next several months.proved reserve base.

Anadarko drilled 30 of 160 planned 2008 wells in Atlantic Rim during stthe 1 Qtr.

Production from Anadarko's coalbed methane (CBM) assets continued to grow during the quarter. Powder River CBM continued to set production records as total gross sales volumes for Anadarko- Total gross CO oil production exceeded 10,000 BOPD for a milestone 2

operated and non-operated interests topped 700 MMcf/d during the this quarter, with Salt Creek achieving a new daily production record month of March. of 7,350 BOPD. Additionally, Salt Creek cumulative EOR production

surpassed 5 MMBO during the quarter.

– COALBED METHANE DEVELOPMENT –

– ENHANCED OIL RECOVERY –



Southern

CarthageBossier East Chalk

South Texas

Haley

Ozona

Tight Gas

Fractured Reservoirs

Other

Hugoton

Maverick

MarcellusShale

Haley

Ozona

Mid-Continent

Bossier

Carthage

Chalk

S. Texas / Other

TOTAL

1Q08

$ MM Oper. Non-Op Expl. Dev.

1Q081Q08

Capital Rig Activity Completed WellsGross


4Q071Q08

Net Volumes

26

3

2

24

50

30

54

189

7

1

0

2

6

6

3

25

3

0

0

1

0

2

1

7

1

0

0

0

0

1

0

2

5

14

4

8

30

6

14

81

101

40

59

153

81

38

92

564

0

1

1

0

5

12

5

24

104

40

63

158

77

50

97

589

0

1

0

0

5

13

4

23

Carthage

Freestone

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Carthage continued an active drilling program with six rigs running throughout the quarter. Rig efficiencies are being realized as the vertical drilling program saw an average decrease of four drilling days per well within the quarter. The horizontal drilling program continues to provide encouraging results with five wells drilled to date.

The Bossier asset has performed well in recent months – achieving its highest gross operated production rate since 2005 at more than 260 MMcf/d. Based on recent success, the two-rig program will ramp

ndup to three rigs in the 2 Qtr.



Southern

APC Leasing Activity

Industry Activity

Appalachian Basin

Haley / Delaware Basin Appalachian Basin

Maverick Basin

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stThe Anadarko/Chesapeake partnership had 10 rigs running in the Marcellus shale play leasing continued in the 1 Qtr in stDelaware Basin during the 1 Qtr, with six wells spud and six wells Pennsylvania. Current leasehold in the play is approximately

completed. 600,000 gross acres. The company anticipates drilling five to ten wells in the play this year, the first of which is expected to spud

ndduring the 2 Qtr of 2008.

In early April, Anadarko entered into a joint exploration agreement with TXCO Resources, Inc. on its 349,000-acre lease in the area. The agreement allows for TXCO to earn up to a 50% working interest based on a drill-to-earn arrangement beginning with four wells this year followed by an option extension through 2013. TXCO has farmed-in St. Mary Land and Exploration Company and both intend to drill horizontal wells targeting the Pearsall and Eagleford shale formations in the area.

– EXPLORATION –



International / Frontier

1Q08

$ MM

Capital

MBbls/dMBbls/d

4Q071Q08

Net Volumes

Alaska

Algeria

China

Other

TOTAL

31

14

16

72

133

20

51

17

0

88

22

67

16

0

105

– DEVELOPMENT –

Alaska China

Brazil

Algeria

Ghana

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st During the quarter, oil production averaged 46 MBOPD (gross) and Average gross oil production for the Colville River unit during the 1 the Bohai 8 Rig returned from dry dock to the CFD 11-6/12-1S field to Qtr was approximately 110 MBOPD (gross). During the quarter, continue development drilling.several development wells were drilled in the Fiord area with one rig,

which will eventually mobilize to Qannik for additional development drilling for the remainder of 2008. In addition, construction continues for various modules in connection with the Qannik development at

During the quarter, Anadarko announced the sale of its 50% interest CD2 with initial production from this reservoir anticipated to begin in the Peregrino field to partner StatoilHydro. The transaction is in late 2008.

ndexpected to be completed in the 2 half of 2008, pending government st approvals.A second rig was brought into the Nanuq area at the end of the 1 Qtr

to drill and complete up to two development wells.Anadarko continues to progress field development through the Integrated Project Team with StatoilHydro until the sale is closed.

A milestone event was reached in March of this year with cumulative gross production surpassing 1 billion barrels of oil.

An integrated development team has been formed with the partners and is working toward 2008 project sanction for the Jubilee field. During the quarter, oil production from the Hassi Berkine South and

the Ourhoud Central Processing Facilities was 443 MBOPD (gross). Inquiries are being made in the FPSO market, with several options Several development wells were drilled during the period.available for first production in 2010.

The planned maintenance shutdown of Hassi Berkine South, which th The partnership has contracted for a drilling ship to arrive before the was deferred from 4 Qtr 2007, began in late March and was completed

end of 2008 to begin the development drilling program.on schedule in mid-April. The facility is back on line.




– EXPLORATION –

Alaska

Algeria

Brazil

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Drilling operations were completed at the Jacobs Ladder prospect on Anadarko is mobilizing a drillship with dynamic positioning from the the Eastern North Slope of Alaska. The well was drilled to a total Gulf of Mexico to Brazil to execute its anticipated three-well drilling depth of 14,416 feet. Following logging operations, no commercial program in 2008.hydrocarbons were encountered and the well has been plugged. Anadarko operates with a working interest in the prospect of 50%.

stDuring the quarter, Anadarko began drilling two wells – Gubik-3 and During the 1 Qtr, the ZEKE-1 exploration well was drilled in Block Chandler-1 – in the Foothills area of Alaska's North Slope. The 403 c/e (APC 66% WI). The well did not encounter commercial oil Gubik-3 encountered natural gas in two zones. Drilling on the quantities and was plugged and abandoned. An appraisal well of the

rdChandler-1 well has been suspended for re-entry next season. These 2007 ZENN-1 oil discovery is planned to spud in the 3 Qtr.two wells are the first in a two to three year drilling program to determine the prospectivity and potential commerciality of the area. Anadarko is the operator with a 33.34% working interest in approximately 1 million acres in the Foothills Partnership lands.

The Serpa subsalt prospect in Block 24 of the Espírito Santo Basin was slated to reach a total depth of 19,500 feet. Total depth has not been reached and the partnership is evaluating the potential to utilize a different rig to complete drilling operations on the well. While the primary objective has yet to be reached, the partners were encouraged by evidence of an active petroleum system in the subsalt section encountered in the well. Anadarko has a 30% working interest with partners Petrobras (operator, 40% WI) and EnCanBrazil Ltda (30% WI).



APC Acreage

Discoveries

Drilling

Jubilee Field

Prospect

APC Acreage

Discoveries

Drilling

Jubilee Field

Prospect

Successful Appraisal

– EXPLORATION (CONT.) –

China

Ghana

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st Following completion of the Odum #1 well, the rig moved to the During the 1 Qtr, Anadarko conducted G&G studies and interpreted Mahogany #2 appraisal well. The well, located in 3,540 feet of water recently acquired 2D seismic data on deepwater Block 43/11 in the on the West Cape Three Points Block offshore Ghana, encountered South China Sea. 2D seismic acquisition has resumed and is expected

nd high-quality stacked reservoir sandstones with approximately 165 to be completed by the end of the 2 Qtr. Preparations are under way nd feet of net oil-bearing pay. Moreover, the Mahogany-2 well is located to drill a planned 4,000-meter exploratory test during the 2 half of

approximately seven miles to the northeast and up-dip from the 2008.successful Hyedua-1 well on the Deepwater Tano license, indicating a gross oil column of nearly 1,955 feet. We now plan to perform a drillstem test on the Mahogany-2 well to gain a better understanding of the fluid and flow characteristics, which we anticipate will lead us to In the first quarter, our partnership announced a discovery at the update our estimated resource range of the area.Odum #1 well offshore Ghana in the West Cape Three Points block.

The well is located in 3,151 feet of water and approximately eight miles from the Mahogany #1 discovery well. The Odum #1 well confirmed a separate and potentially significant oil accumulation in the area. We plan to shoot additional 3-D seismic to provide clearer view of the size and expected impact of this project.

anadarko petroleum 1q08 operations report

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