Anadarko completes acquisition of Kerr-McGee

Offshore staff

HOUSTON -- Anadarko has completed the acquisition of Kerr-McGee Corp. 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 $1.6 billion.

"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," says Jim Hacket, Anadarko chairman, president and CEO.

Kerr-McGee's year-end 2005 proved reserves totaled 898 MMboe, of which approximately 62% was natural gas. Proven undeveloped reserves represented 30% of the total. Production in 2006 was expected to reach 92 MMboe, with natural gas representing approximately 60% of the total.

Anadarko says it expects to ultimately recover more than 3.1 Bboe from Kerr-McGee's properties, at a full-cycle cost of approximately $39.2 billion ($12.40/boe), including the acquisition cost.

Kerr-McGee's largest property concentrations are in the deepwater GoM and onshore in the Rockies. Its Gulf properties include 504 deepwater blocks comprising seven operated and three non-operated producing fields, five operated and three non-operated discoveries in various stages of development, and four additional prospects expected to be drilled this year.

Anadarko says "these assets are supported by Kerr-McGee's extensive hub-and-spoke infrastructure, which offers highly cost-effective future development potential."

08/10/06