anadarko petroleum corporation - center for strategic and
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www.anadarko.com | NYSE: APC
ANADARKO PETROLEUM CORPORATION
Danny Brown
General Manager, Maverick Basin
PUBLIC AFFAIRS
CONTACTS:
John Colglazier
Vice President
832/636-2306
John Christiansen
Director
832/636-8736
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Cautionary Language 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. 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 the following: the Company’s ability to successfully
defend itself against any remaining claims relating to the Deepwater Horizon event (including, but not limited to, fines,
penalties and punitive damages) and BP’s ability to fulfill its indemnification obligations to Anadarko; the legislative
and regulatory changes, such as the delays in processing and approval of drilling permits, exploration plans and oil
response plans that may impact the Company’s Gulf of Mexico and International offshore operations resulting from the
Deepwater Horizon events; Anadarko’s ability to achieve its production targets, successfully manage its capital
expenditures and to complete, test and produce the wells and prospects identified in this presentation; to successfully
plan, secure necessary government approvals, finance, build and operate the necessary infrastructure and LNG plant;
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 2010 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.
Please also see our Web site at www.anadarko.com under “Investor Relations” for reconciliations of the differences between any
non-GAAP measures used in this presentation and the most directly comparable GAAP financial measures.
Cautionary Note to U.S. Investors — Effective January 1, 2010, 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,” “net risked resources,” “net lower-risked captured resources,” “net risked
captured resources,” “gross resources,” “gross resource potential,” “gross unrisked resource potential,” “gross
unrisked resources,” “lower-risked captured resources,” “recoverable resources,” “recoverable natural gas” 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, 2010, 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.
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About Anadarko
Top U.S. Independent E&P company
~ 4,700 employees worldwide
11+ BBOE of total Resource
Active player in many shale basins
Extensive experience in both onshore and offshore exploration and development
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Anadarko’s mission is to provide 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.
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Our Premier Balanced Portfolio is Built to Deliver
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Our Strategy is Working:
Identify and Commercialize Resources
Explore in High-Potential, Proven Basins
Employ a Global Business Development Approach
Ensure Financial Discipline and Flexibility
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Known U.S. Shale Play Distribution
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Palo Duro Woodford
Avalon
Barnett Haynesville
Fayetteville
Floyd/ Conasauga
Niobrara/Mowry
Cane Creek Monterey
Michigan Basin
Utica Shale
Horton Bluff Formation
New Albany
Marcellus
Antrim
Lewis/Mancos
Green River
Gammon
Colorado Group
Bakken
Montney Deep Basin
Horn River Basin/ Cordova Embayment
0 600
MILES
Eagleford Modified from various sources.
OIL SHALE
NATURAL GAS SHALE
Niobrara
USGS Resource Assessment :
336,145 BCF of Shale Gas
+ 8,580 Million BOE of Shale Oil
64.6 Billion Barrels Oil Equivalent in US Shales
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Elements of a Successful Shale Play
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Below
Ground
Maturity
Organic Richness
Pore
Pressure
Thickness
Mineralogy
Poro
Perm
+
Access
Water
Equipment
Fiscal
Regime
Environment
Personnel
Politics
Above
Ground Importation
/Regulation
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IRR at NYMEX Price Deck (1)
Eagle Ford Shale Economics
The decline in natural gas prices has made the differentiation among the plays more important
The liquid-rich Eagle Ford shale provides the highest returns across the shale plays
Drivers for Anadarko return:
Liquid-rich production
Moderate drilling depth
High BTU gas
Favorable differentials
(1) Based on Jefferies’ internal estimates and publicly available shale production information.
Liquids Content Drives Superior Returns
>100%
59%
43%
24%21%
11%
4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Eagle FordCore
BakkenCore
Marcellus Fayetteville Haynesville Barnett Woodford
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Eagle Ford Shale
15,000 sq miles (39,000 km2)
High TOC / Low clay content
Significant liquid rich Eagle Ford resource potential extending over 400 miles (25+ BBOE)
Ultimate well count could be up to 120,000 locations
211 rigs in the play, up from 15 in 2009 Eagle Ford Play
Gross Production
0
50
100
150
200
250
Q1
'07
Q2
'07
Q3
'07
Q4
'07
Q1
'08
Q2
'08
Q3
'08
Q4
'08
Q1
'09
Q2
'09
Q3
'09
Q4
'09
Q1
'10
Q2
'10
Q3
'10
Q4
'10
Q1
'11
Q2
'11
Q3
'11
Q4
'11
Eagle Ford Rig Count
10% of all US Rigs
Source: Texas Railroad Commission Source: Tudor Pickering Holt & Co Weekly Rig Roundup
0
5
10
15
20
25
30
35
40
45
50
2008 2009 2010 2011 (Jan-aug)
Pro
du
ctio
n -M
illio
n B
arre
ls o
f O
il Eq
uiv
elen
t (6
:1)
Condensate
Oil
Gas (at 6:1)
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http://www.eia.gov/todayinenergy/detail.cfm?id=3770
YE 2010
Eagle Ford Development
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Anadarko Eagle Ford: Stellar Growth
450+ MBOE Average EUR
4,000+ Identified Drill Sites
Infrastructure Backbone in Place
2012 Planned Activity
11 Operated Rigs
Drill 250+ Wells
TX
Concentrated in
Condensate-Rich Window
Gross Acreage: ~400,000
Net Acreage: ~200,000
APC ACREAGE ACTIVE APC DEVELOPMENT
0 10
Miles 45%
30%
25%
Sales-Volumes Mix
Oil
Gas
NGLs
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Shale Development Value Drivers
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Value Creation
Commercial Technology
Operational
Efficiencies
• Pilot/Data Gathering
• Structural Analysis
• Modeling
• Sweet Spot Identification
• Target Line
• Sustained Economics
• Multi-year Investment
• Market Response
• Low-cost Drill & Complete
• Water Management
• Infrastructure
• Scale Synergies
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Development Methodology
Kickoff
~6,300 feet
6,000’
12
1+ Mile Separates Aquifer
from Fractured Formation
Multiple layers of
protective steel &
cement
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Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11
Eagle Ford Production
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Anadarko 0 50 100 150 200
ANADARKO E & P COMPANY LIMITED…
EOG RESOURCES INCORPORATED
PETROHAWK OPERATING COMPANY
CHESAPEAKE OPERATING…
SM ENERGY COMPANY
PIONEER NATURAL RESOURCES USA INC
BURLINGTON RESOURCES O&G CO LP
LEWIS PETROLEUM PROPERTIES…
GEOSOUTHERN ENERGY CORPORATION
ROSETTA RESOURCES OPERATING LP
Well Count
Barr
els
of O
il E
quiv
ale
nt
Top 10 Eagle Ford Companies
Source: Texas Railroad Commission
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Regional Infrastructure
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Bakken
Eagle Ford
Bakken
Eagle Ford
Anadarko Gas Gathering Facility
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Eagle Ford Impact
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Dimmit County - Based on 2008 Statistics:
Area: 1,331 sq miles
Population: 9,739
(7.7 people/sq mi)
Housing Units: 4,244
Per Capita income: $23,726
1 Hospital
3 Elementary Schools
2 Intermediate Schools
1 High School
Estimated that nearly 70,000
local jobs will be provided by
Eagle Ford activity.
Perspective: State of Rhode Island is 1,214 sq miles
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Summary
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Shale development will be a major source of production and reserves for several decades.
Development environment must be competitive and predictable.
All shales are not created equal and each shale has variable surface and subsurface elements
Shale development must be carried out in a safe, prudent, and environmentally responsible manner
Full development requires significant resource intensity: People
Capital
Equipment
Infrastructure
Substantial potential local economic benefit exists through shale development