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HOUSTON--(BUSINESS WIRE)--Aug. 10, 2006--Anadarko Petroleum
Corporation (NYSE:APC) today announced it has completed the
acquisition of Kerr-McGee Corporation (NYSE:KMG).
Kerr-McGee stockholders of record as of the close of business
today will receive $70.50 in cash for each share of Kerr-McGee common
stock they own. Trading in Kerr-McGee common stock on the New York
Stock Exchange terminated as of the close of trading today.
In connection with the transaction, Anadarko anticipates it will
guarantee the outstanding publicly held indebtedness of Kerr-McGee.
"The Kerr-McGee transaction makes Anadarko one of the leading
companies in the deepwater Gulf of Mexico and in the Rockies, two of
the fastest-growing oil and natural gas producing regions in North
America," Anadarko Chairman, President and CEO Jim Hackett said.
"Kerr-McGee's outstanding deepwater holdings and long-lived onshore
natural gas plays, combined with the skill sets their employees add to
our organization, bolster Anadarko's core competencies in high-impact
exploration and unconventional resource development. This acquisition,
along with the midstream and unconventional assets to be acquired in
the Western Gas Resources transaction that we expect to close later
this month, should result in a post-divestiture enterprise capable of
delivering more robust and predictable results."
Hackett said Anadarko is conducting a thorough review of the
consolidated assets to select divestiture candidates, with the dual
goals of paring acquisition-related debt and optimizing the portfolio.
"We have identified assets that could produce up to $10 billion in
after-tax proceeds. This includes our Canadian holdings, which have
already been moved to discontinued operations with the expectation of
divestiture before year-end," he said. "We plan to provide detailed
operational and financial guidance for the restructured Anadarko
during the fourth quarter.
"We expect that Anadarko's post-divestiture portfolio will be more
capital efficient, delivering growth with a lower cash flow
reinvestment requirement," Hackett said. "That efficiency should
translate into increased free cash flow that can more quickly restore
balance sheet strength and further increase shareholder value by
limiting the level of future equity issuances."
Charles A. Meloy joins Anadarko's executive management team as
Senior Vice President of Gulf of Mexico and International Operations.
Meloy was previously Vice President of Exploration and Production at
"One of the key components of the acquisitions of Kerr-McGee and,
eventually, Western Gas Resources is the talented workforce who will
be joining our ranks," Hackett said. "Chuck Meloy has led an
accomplished career at Kerr-McGee and its predecessor companies. We
are very pleased he will be joining the Anadarko team to lead an
important part of our business going forward."
Meloy joins the following Anadarko executives, some of whom are
taking on new roles in the combined organization.
- Robert P. Daniels, Senior Vice President, Worldwide
- Karl F. Kurz, Senior Vice President, North America Operations,
Midstream and Marketing
- Mark L. Pease, Senior Vice President, E&P Technology &
- Robert K. Reeves, Senior Vice President, Corporate Affairs and
- R. A. Walker, Senior Vice President, Finance & Chief Financial
Luke R. Corbett, formerly Chairman and CEO of Kerr-McGee
Corporation, has been appointed to Anadarko's Board of Directors.
SUMMARY OF THE KERR-MCGEE CORPORATION TRANSACTION
(ADJUSTED FOR PENDING KERR-MCGEE GULF OF MEXICO SHELF DIVESTITURE)
Anadarko has acquired Kerr-McGee Corporation in an all-cash
transaction totaling $16.4 billion, or $70.50 per Kerr-McGee share,
plus the assumption of net debt and other liabilities estimated at
Kerr-McGee's year-end 2005 proved reserves totaled 898 million
BOE, of which approximately 62 percent was natural gas. Proven
undeveloped reserves represented 30 percent of the total. Production
in 2006 was expected to be about 92 million BOE, with natural gas
representing approximately 60 percent of the total. Anadarko expects
to ultimately recover more than 3.1 billion BOE on the Kerr-McGee
properties, at a full-cycle cost, in today's environment, of
approximately $39.2 billion ($12.40 per BOE), including the
Kerr-McGee's largest property concentrations are in the deepwater
Gulf of Mexico and onshore in the Rockies. Gulf of Mexico properties
include 504 deepwater blocks encompassing seven operated and three
non-operated producing fields, five operated and three non-operated
discoveries in various stages of development, and four additional
prospects that should be drilled this year. These assets are supported
by Kerr-McGee's extensive "hub-and-spoke" infrastructure, which offers
highly cost-effective future development potential. In Colorado,
Kerr-McGee holds 451,000 net acres in the Wattenberg natural gas play,
located partially on the Land Grant, where Anadarko owns the royalty
interest. In Utah, Kerr-McGee holds 237,000 net acres in the Uinta
basin's prolific Greater Natural Buttes gas play.
In addition to its extensive, rapidly growing U.S. portfolio,
Kerr-McGee produces oil and is continuing to develop and explore
offshore China, is pursuing the development of discoveries and
continuing to explore on the North Slope of Alaska and offshore
Brazil, and is exploring offshore Australia, West Africa and the
islands of Trinidad and Tobago.
Kerr-McGee stockholders seeking details on the timing of cash
payments and other issues related to their accounts are encouraged to
visit the Shareholder FAQ section under Investor Relations at
www.anadarko.com or contact the Information Agent, Morrow & Co., Inc.,
at 800-573-4397. UMB Bank, N.A. is the Paying Agent and will be
sending instruction letters to stockholders of record.
Anadarko Petroleum Corporation'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 2005, the
company had 2.45 billion barrels-equivalent of proved reserves, making
it one of the world's largest independent exploration and production
companies. In June, Anadarko agreed to acquire Kerr-McGee Corporation
(NYSE:KMG) and Western Gas Resources, Inc. (NYSE:WGR) in separate
all-cash transactions totaling $21.1 billion, plus the assumption of
debt estimated at $2.2 billion. For more information about Anadarko,
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, or that the Western Gas acquisition and the divestitures
described above will occur. A number of factors could cause actual
results to differ materially from the projections, anticipated results
or other expectations expressed in this news release. See "Risk
Factors" in the company's 2005 Annual Report on Form 10-K and other
public filings, press releases and discussions with company
management. Anadarko undertakes no obligation to publicly update or
revise any forward-looking statements.
CONTACT: Anadarko Petroleum Corporation, Houston
Teresa Wong, 832-636-1203
Susan Richardson, 832-636-1537
David Larson, 832-636-3265
Stewart Lawrence, 832-636-3326
SOURCE: Anadarko Petroleum Corporation