w w w . a n a d a r k o . c o m | N Y S E : A P C
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
JOHN COLGLAZIERSenior Vice President
832 636 2306
BRIAN KUCKDirector
832 636 7135
JEREMY SMITHDirector
832 636 1544
SHANDELL SZABODirector
832 636 3977
I N V E S T O RR E L A T I O N S
CITI 2016 GLOBAL ENERGY & UTILITIES CONFERENCE
Ernie Leyendecker, SVP, International ExplorationMay 2016
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C 2
Cautionary LanguageRegarding 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 realize its expectations regarding performance in this challenging economic environment and meet financial and operating guidance; timely complete and commercially operate the projects and drilling prospects identified in this presentation; reduce its net debt; consummate the transactions described in this presentation and identify and complete additional transactions; achieve further drilling cost reductions and efficiencies; successfully plan, secure necessary government approvals, enter into long-term sales contracts, finance, build, and operate the necessary infrastructure and LNG park in Mozambique; and achieve production expectations on its mega projects. See “Risk Factors” in the company’s 2015 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, including the appendix slides, and 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,” “recoverable resources,” 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, 2015, File No. 001-08968, available from us at www.anadarko.com or by writing to 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.
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
Focus on Enhancing and Preserving ValueReduce Capital Program ~50% YOYReduce DividendsAchieve Additional Cost Savings and Efficiency GainsContinue Active Monetization ProgramReduce Net Debt
3
Successfully Navigating a Volatile Environment
Note: All amounts are approximate
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C 4
2016 Expectations
$1.3 Billion Monetizations Closed $420 Million Soda Ash and Coal Royalties $750 Million WES Transaction $105+ Million East Chalk Divestiture
Additional Monetizations Under Way
2016E 2015
CAPITAL1
(BILLIONS) $2.6 - $2.8 $5.4 ~50%SALES VOLUMES2
(MMBOE) 282 - 286 292 ~3%OIL SALES VOLUMES2
(MBOPD) 306 - 311 312 ~Flat1 Excludes capital expenditures by WES2 Excludes all sales volumes associated with EOR, Bossier, PRB-CBM and East Chalk
GOM$0.7 B
International$0.7 B
Midstream & Other$0.2 B
U.S. Onshore$1.1 B
2016E CAPITAL PROGRAM$2.6 - $2.8 BILLION*
* Excludes capital expenditures by WES
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C 5
Benefits of a Balanced Portfolio~18% Base DeclineLeveraging IDUC InventoryMega Project Contribution Full-Year Lucius Contribution Heidelberg First Oil 1Q16 TEN First Oil Expected 3Q16
Note: Maintenance capital is defined as capital investments necessary to keep current-year sales volumes flat to previous year
$2.0 $2.2 $2.5 $2.9 $2.9 $2.7$0.5
$1.1 $1.3$1.8
$2.9
$0.1$2.0
$1.6$1.9
$2.1$2.0
$2.4
$0
$4
$8
2010 2011 2012 2013 2014 2015 2016E
E&P
Cap
ital A
lloca
tion
(Bill
ions
)
Advantaged Maintenance Capital Provides Flexibility
Maintenance Capital Short-Cycle Growth Capital Mid- & Long-Cycle Capital
L I Q U I D S M I X ~43% ~56%
~$1.8
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
Increasing Flexibility 50% YOY Capital Reduction 80% Dividend Reduction Improving Cost Structure
Targeting up to $3 Billion Monetizations $1.3 Billion Monetizations Closed
6
Financial Discipline: Investing Within Cash Inflows
-$3
$15
Bill
ions
Differentiating Capital Allocation & Portfolio Management
Adj. DCF Monetizations TPE Capital DWH/TRX Adj. FCF (Cumulative) Adj. FCF (CumulativeIncluding DWH/TRX)
2011 2012 2013 2014 2015 2016E*
* Based on consensus prices as of 5/2/2016: WTI $40/Bbl and HH $2.35/McfNote: See Appendix for non-GAAP definitions and reconciliations
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
Ample Liquidity $3 Billion Cash-on-Hand 1Q16 $3 Billion 5-Year Revolving Credit Facility $2 Billion 364-Day Facility
Substantial FlexibilitySuccessfully Refinanced Near-Term Maturities Weighted Average Maturity Now 16+ Years No Significant Maturities Until 2024
7
Maintaining Financial StrengthInvestment-Grade Quality, Investment-Grade Approach
Rating Outlook
S&P BBB Negative
FITCH BBB Negative
MOODY’S Ba1 Negative
$0
$500
$1,000
$1,500
$2,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 +
Am
ount
Out
stan
ding
($M
M)
APC Maturity Schedule*
Fixed Rate Bonds Retired in 2Q16
~$9,000
* As of 5/2/2016
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
U.S. Onshore: Enhancing & Preserving Value~70% Capital Reduction YOYFocus on Base ProductionReduce Costs and Improve EfficienciesLeverage 230 IDUCs When Returns Compelling 170+ IDUCs Expected YE16
8
U . S . O N S H O R E N E T S A L E S V O L U M E S * 2 0 1 5 2 0 1 6 E
TOTAL (MBOE/D) 616 605 - 610LIQUIDS (MBBL/D) 283 267 - 271
Delaware Basin~$800 MM
DJ Basin~$1,300 MM
Midstream~$400 MM
Other Onshore~$600 MM
Eagleford$500
Delaware Basin$500+ MM
DJ Basin~$500 MM
Midstream~$100 MM
Other~$100 MM
2016E CAPITAL PROGRAM~$1.2 BILLION
2015 CAPITAL PROGRAM~$3.6 BILLION
* Excludes all sales volumes associated with EOR, Bossier, PRB-CBM and East ChalkNote: See Appendix for non-GAAP definitions
D J B A S I NP L A N N E D A C T I V I T Y
~1 Rig1+ Frac Crews
$6/BOE Development Cost <$15,000/Flowing Barrel
Activation Cost
D E L A W A R E B A S I NP L A N N E D A C T I V I T Y
4+ Rigs1+ Frac Crews
Delineation and Lease Maintenance
2+ BBOE: Doubled Net Resources
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
$5.1
$4.4
$3.7
$2.4
$0
$3
$6
2013 2014 2015 2016E
Mill
ions
Driving Down Well Costs(4,800’ Short-Lateral Equivalent)
CONSOLIDATED CORE ACREAGEWITH MINERALS-INTEREST UPLIFT
OILLIGHT OIL
5 MILES
<$30
<$25
$0
$20
$40
New Drills IDUCs
WTI
Pric
e ($
/Bbl
)
BTAX PV-10 Breakeven**
9
DJ Basin: World-Class Asset1.5+ BBOE Net Resources ~4,000 Identified Drilling Locations
Leveraging Competitive Advantages Minerals-Interest Ownership Infrastructure in Place IDUC Inventory APC Acreage
APC Mineral Interest
D J B A S I NNet Acres: ~350,000
C O L O R A D O
2 0 1 6 P L A N N E D O P E R A T E D A C T I V I T Y
R I G S W E L L S - S L E F R A C C R E W S Y E 1 6 I D U C S
~1 50+ 1+ 60+
0
100
200
300
$0
$1
$2
$3N
et S
ales
Vol
umes
(MB
OPD
)
Bill
ions
Differentiating Capital Allocation & Portfolio Management(E&P Only)
EBITDAX Capital MonetizationsAdj. FCF (Cumulative) Net Sales Volumes
2011 2012 2013 2014 2015 2016E*
* Based on consensus prices as of 5/2/2016: WTI $40/Bbl and HH $2.35/McfNote: EBITDAX excludes corporate G&A; see Appendix for non-GAAP definitions ** Assumes HH $2.35/Mcf
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C 10
Delaware: Doubling Net Resources & Lowering Costs
T E X A S
DE L AWARE BAS IN Gross Acres: ~610,000
Net Acres: ~255,000
2+ BBOE Net ResourcesMaintaining Top-Tier Acreage Preparing for Full-Scale Development Optimizing Spacing and Completion Design Testing Stacked Oil Potential Ongoing Midstream Expansion
CULBERSON
REEVES
NEW MEXICO
TEXAS
WARD
WINKLER
PECOS
LOVING
OIL-RICH PLAY WITH YEARS OF DEVELOPMENT POTENTIAL
10 MILES
APC AcreageTop-Tier Acreage
~$35~$30
$0
$20
$40
New Drills IDUCs
WTI
Pric
e ($
/Bbl
)
BTAX PV-10 Breakeven*
$11.7
$7.2$6.2
$5.2
$0
$3
$6
$9
$12
YE14 YE15 2016E Projected Pad Development
Tota
l Gro
ss D
C&
E C
ost
(Mill
ions
)
Driving Down Well Costs(4,500’ Short-Lateral Equivalent)
2 0 1 6 P L A N N E D O P E R A T E D A C T I V I T Y
R I G S W E L L S - S L E F R A C C R E W S Y E 1 6 I D U C S
4+ 60+ 1+ 60+
* Assumes HH $2.35/Mcf
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
CONSTITUTION
MARCO POLO
LUCIUS
11
Gulf of Mexico: Enhancing Value Through TiebacksFocused on Capital-Efficient Tiebacks 30+% BTAX ROR 15 - 30 Development Well Inventory
Advancing Appraisal OpportunitiesMinimal Exploratory Drilling
HEIDELBERG
L U C I U SP L A N N E D A C T I V I T Y
1 Tieback
HEIDELBERGP L A N N E D A C T I V I T Y
Achieved First Oil2 Additional Wells
K 2 C O M P L E XP L A N N E D A C T I V I T Y
2 Tiebacks
CAESAR/TONGAP L A N N E D A C T I V I T Y
2 TiebacksPhase 2 Facility Work
G U L F O F M E X I C OGross Acres: ~1.6 Million
Lease Blocks: 279 Gross /160 Net
APC WI Block
APC Exploration/Appraisal
G O M N E T S A L E S V O L U M E S 2 0 1 5 2 0 1 6 E
TOTAL (MBOE/D) 85 76 - 80LIQUIDS (MBBL/D) 60 63 - 67
T I E B A C K O P P O R T U N I T I E S *
I N V E N T O R Y
CAESAR/TONGA 5 - 8 WELLS
K24 - 7 WELLS
+2 Potential New Fields
HEIDELBERG3 - 6 WELLS
+2 Potential New Fields
LUCIUS
3 - 7 WELLS+
1 Potential New Field+
Third-Party Developments
WARRIOR
PHOBOS
SHENANDOAH
* As of 1/1/2016
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 F R I C A
Ghana & Algeria: Growing Higher-Margin Oil
Algeria 2+ Billion Barrels Cumulative Gross Production Flat YOY Volumes for <$40 Million Capital
Ghana TEN: First Oil Expected 3Q16
APC WI BlockOil FieldGas CondensateAppraisal AreaExport Pipeline
BLOCK 404A
PK0
BLOCK208
10 MILES16 KMS
OURHOUD CPF
HBNS CPF
EL MERK CPF
A L G E R I A
WEST CAPE THREE POINTS
MAHOGANY
TEAK
Jubilee Unit24% WI
20 MILES32 KMS
DEEPWATER TANO
NTOMME
Planned FPSO Location
TWENEBOA
WAWA
ENYENRA
TEN Complex19% WI
G H A N A
12
0
40
80
2011 2012 2013 2014 2015 2016E
MB
bl/d
Algeria Net Sales Volumes
0
20
40
2013 2014 2015 2016E 2017E 2018E
MB
OPD
Ghana Net Sales Volumes
Jubilee TEN
G H A N A &A L G E R I A
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
FID WHEN UNCERTAINTY
REMOVED
Mozambique LNG: Working Parallel Processes
APPROVE PLAN OF DEVELOPMENT
SECURE 8+ MMTPA SPAs
ADVANCE TOWARD ~2/3 LEVERAGE
Legal &Contractual Framework
OfftakeAgreements
Project Financing
MINIMAL 2016 CAPITAL REQUIRED
13
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
2016 International & Deepwater Exploration ActivityG O M
L A N D P O S I T I O N
~1.6 MM Gross Acres2 0 1 6 A C T I V I T Y
PHOBOSAppraisal Well
SHENANDOAHAppraisal Well
WARRIORExploration Well
C O L O M B I AL A N D P O S I T I O N
~16 MM Gross Acres2 0 1 6 A C T I V I T Y
PURPLE ANGEL-1 Exploration Well GRAND COL
3D Seismic Acquisition
14
2 0 1 6 P L A N N E D A C T I V I T Y
C A P I T A L D R I L LT A R G E T N E T D I S C O V E R E D R E S O U R C E S
~$500Million
~8Wells
~250Million
C Ô T E D ’ I V O I R EL A N D P O S I T I O N
~1 MM Gross Acres2 0 1 6 A C T I V I T Y
PAON Appraisal Well
PELICAN Exploration WellROSSIGNOL
Exploration Well
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Net Discovered Resources
~6.5 BBOE
~$14 Billion
Monetized
~5 BBOE ~250 MBOE/d
Resources RetainedNet Production
Exploration: Creating Unmatched Value with Optionality
15
D R I V I N G V A L U EE X P L O R I N G A P P R A I S I N G D E V E L O P I N G
Colombia Côte d’Ivoire GOM (Warrior)
Shenandoah Paon Phobos
Heidelberg TEN Mozambique LNG
~$10 Billion Capital Invested
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C 16
Successfully Navigating a Volatile EnvironmentMaintain Financial Discipline and Invest Within Cash InflowsFocus on Value Reduce Capital Spending and Cost StructurePosition U.S. Onshore for the FutureCapitalize on Portfolio Diversification and FlexibilityContinue Active Monetization Program
PRODUCTION
EXPLORATION
EAST AFRICA
WEST AFRICA
GULF OF MEXICO
U.S. ONSHORENORTH AFRICA
ALASKA
COLOMBIA
NEW ZEALAND
w w w . a n a d a r k o . c o m | N Y S E : A P C
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
JOHN COLGLAZIERSenior Vice President
832 636 2306
BRIAN KUCKDirector
832 636 7135
SHANDELL SZABODirector
832 636 3977
PETE ZAGRZECKIDirector
832 636 7727
I N V E S T O RR E L A T I O N S
APPENDIX
w w w . a n a d a r k o . c o m | N Y S E : A P C 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 NA 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 Nw w w . a n a d a r k o . c o m | N Y S E : A P C
Non-GAAP Financial Measure Definitions & Reconciliations
This list of non-GAAP financial measure definitions and related reconciliations is intended to satisfy the requirements of Regulation G of the Securities Exchange Act of 1934, as amended. This information is historical in nature. Anadarko Petroleum Corporation (the “Company”) undertakes no obligation to publicly update or revise any non-GAAP financial measure definitions and related reconciliations. The following slides include reconciliations of GAAP to non-GAAP financial measures and statements indicating why management believes the non-GAAP financial measures provide useful information for investors. Non-GAAP financial measures provided in this presentation for specific areas are calculated using the same methodology.
16
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Adjusted EBITDAX (EBITDAX)The Company defines Adjusted EBITDAX as income (loss) before income taxes; gains (losses) on divestitures, net; exploration expense; depreciation, depletion, and amortization; impairments; interest expense; total (gains) losses on derivatives, net, less net cash from settlement of commodity derivatives; and certain items not related to the Company’s normal operations, less net income attributable to noncontrolling interests. During the periods presented, items not related to the Company’s normal operations included Deepwater Horizon settlement and related costs, Algeria exceptional profits tax settlement, Tronox-related contingent loss, and certain other nonoperating items included in other (income) expenses, net.
Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Company’s financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures, and make distributions to stockholders.
Adjusted EBITDAX as defined by Anadarko may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) attributable to common stockholders and other performance measures prepared in accordance with GAAP, such as operating income or cash flows from operating activities. Adjusted EBITDAX has important limitations as an analytical tool because it excludes certain items that affect net income (loss) attributable to common stockholders and net cash provided by operating activities. Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of Anadarko’s results as reported under GAAP.
Non-GAAP Reconciliation
Year Ended December 31, 2015Millions
Income (loss) before income taxes (GAAP) $ (9,689)(Gains) losses on divestitures, net 1,022 Exploration Expense 2,644DD&A 4,603 Impairments 5,075 Interest Expense 825Total (gains) losses on derivatives, net, less net cash received in settlement of commodity derivatives 235Other operating expense 74 Tronox-related contingent loss 5 Certain other nonoperating items 22Less net income attributable to noncontrolling interests (120) Consolidated adjusted EBITDAX (Non-GAAP) $ 4,936
17
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Net Debt to Adjusted Capitalization Ratio December 31, 2015
MillionsAnadarko
ConsolidatedWGP*
ConsolidatedAnadarko
excluding WGPTotal debt (GAAP) $ 15,751 $ 2,707 $ 13,044
Less cash and cash equivalents 939 100 839Net debt (Non-GAAP) $ 14,812 $ 2,607 $ 12,205
MillionsAnadarko
ConsolidatedAnadarko
excluding WGPNet debt $ 14,812 $ 12,205
Total Equity 15,457 12,819Adjusted Capitalization (Non-GAAP) $ 30,269 $ 25,024
Net debt to adjusted capitalization ratio 49% 49%
Net Debt to Adjusted CapitalizationThe Company defines net debt as total debt less cash and cash equivalents. Net debt for Anadarko excluding Western Gas Equity Partners, LP (WGP) is Anadarko’s Consolidated net debt, less WGP’s net debt.
The Company defines net debt to adjusted capitalization ratio as net debt / (net debt + total equity). Net debt to adjusted capitalization ratio for Anadarko excluding WGP excludes WGP’s net debt and noncontrolling interest attributable to WGP.
Management uses net debt as a measure of the Company’s outstanding debt obligations that would not be readily satisfied by cash and cash equivalents on hand.
Non-GAAP Reconciliation
*WGP is a publicly traded consolidated subsidiary of Anadarko and Western Gas Partners, LP (WES) is a consolidated subsidiary of WGP
18
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Adjusted Discretionary Cash Flow from Operations (Adjusted DCF)The Company defines adjusted discretionary cash flow from operations as net cash provided by (used in) operating activities adjusted by changes in accounts receivable, changes in accounts payable and accrued expenses, other items - net, Deepwater Horizon and Tronox settlement payments, collections associated with the Algeria exceptional profits tax settlement, certain nonoperatingand other excluded items, current taxes related to Tronox tax position, and WES/WGP distributions to third parties. Management uses adjusted discretionary cash flow from operations because it is useful in comparisons of oil and gas exploration and production companies as it excludes certain fluctuations in assets and liabilities and current taxes related to certain items affecting comparability.
Adjusted Free Cash Flow (Adjusted FCF)The Company defines adjusted free cash flow as adjusted discretionary cash flow from operations less capital expenditures excluding WES and cash received from the Algeria Exceptional Profits Tax settlement and monetizations. Management uses adjusted free cash flow to demonstrate the Company's ability to fund capital expenditures and to service or incur additional debt.
Non-GAAP Reconciliation
Year Ended December 31,millions 2011 2012 2013 2014 2015Net cash provided by (used in) operating activities (GAAP) $ 2,505 $ 8,339 $ 8,888 $ 8,466 $ (1,877)Adjusted by:
Increase (decrease) in accounts receivable 993 (520) 11 (103) 2 Increase (decrease) in accounts payable and accrued expenses (284) 476 (150) (97) 995
Other items – net 16 (126) (146) 71 (772)Deepwater Horizon / Tronox settlement payments 3,948 (6) - - 5,215
Algeria exceptional profits tax settlement - (1,006) (730) - -Certain nonoperating and other excluded items - - 160 119 96
Current taxes related to Tronox tax position - - - - 910
WES/WGP distributions to third parties (79) (107) (158) (216) (280)Adjusted discretionary cash flow from operations (Non-GAAP) $ 7,099 $ 7,050 $ 7,875 $ 8,240 $ 4,289 Adjusted by:
Capital expenditures excluding WES* (6,114) (6,782) (7,731) (8,560) (5,363)
Collection of Algeria exceptional profits of tax receivable - 1,006 730 - -Monetizations 580 1,244 1,033 5,659 1,825
Adjusted free cash flow (Non-GAAP) $ 1,565 $ 2,518 $ 1,907 $ 5,339 $ 751
* WES capital expenditures 439 529 792 696 525
19
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Finding and Development CostsThe Company defines finding and development (F&D) costs as total costs incurred divided by reserve additions. In addition, the Company will use several variations of this calculation, including isolating development costs and incorporating price-related and non-price-related reserve additions.
Management believes that the presentation of F&D costs provides useful information in assessing the Company’s ability to efficiently manage its capital programs.
Non-GAAP Reconciliation
* NM: Not Meaningful
Year Endedmillions December 31, 2015
Costs incurred $ 5,753 Asset retirement obligation liabilities incurred (207)Cash expenditures for asset retirement obligations 298
Oil and natural gas exploration and development costs $ 5,844
Non-price related additions before divestitures (MMBOE) 407
Finding and development costs ($/BOE) $ 14.36
Additions including pre-related revisions (MMBOE) (216)
Finding & development costs including price-related revisions ($/BOE) NM *
20
w w w . a n a d a r k o . c o m | N Y S E : A P C 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
Glossary of TermsLP: Limited PartnershipM: ThousandsMM: MillionsNGL: Natural Gas LiquidsNYSE: New York Stock ExchangePK0: Point Kilometrique 0 PRB: Powder River BasinROR: Rate of ReturnS&P: Standard & Poor’sSLE: Short Lateral EquivalentT: TrillionTEN: Tweneboa, Enyenra, NtommeTPA: Tonnes per AnnumTPE: Exceptional Profits TaxTRX: TronoxYE: Year EndYOY: Year over YearYTD: Year to DateWES: Western Gas Partners, LPWGP: Western Gas Equity Partners, LP WI: Working InterestWTI: West Texas Intermediate
Adj: AdjustedAPC: Anadarko Petroleum Corp.B: BillionBbl: BarrelBBl/d: Barrels of Liquid per DayBOE: Barrel of Oil Equivalent BOE/d: Barrel of Oil Equivalent per DayBOPD: Barrels of Oil per DayBTAX: Before Tax CBM: Coalbed Methanecf: Cubic Feet of Natural Gascf/d: Cubic Feet per DayCPF: Central Processing Facility DCF: Discretionary Cash FlowDC&E: Drill, Complete and EquipDD&A: Depreciation, Depletion and AmortizationDJ: Denver JulesburgDST: Drill Stem TestDWH: Deepwater HorizonE&P: Exploration and Production EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization
EBITDAX: Earnings Before Interest, Tax, Depreciation, Amortization and Exploration Expense EOR: Enhanced Oil RecoveryF&D: Finding and Development CostFCF: Free Cash FlowFID: Final Investment DecisionFPSO: Floating Production Storage and Offloading UnitGAAP: Generally Accepted Accounting Principles G&A: General and AdministrativeGOM: Gulf of MexicoGP: General Partner HBNS: Hassi Berkine Sud (South) HH: Henry HubHOA: Heads of AgreementIDUCs: Intentionally Deferred CompletionsIPA: Independent Producers of AmericaKm: KilometersLNG: Liquefied Natural Gas
21