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To: Dennis Roth who wrote (164080)	2/21/2012 12:17:55 PM
From: Dennis Roth	2 Recommendations Read Replies (1) \| Respond to of 206338

Anadarko Petroleum Corp (APC) Alert: Jupiter Not Yet Commercial Success; CEO Transition 21 February 2012 ¦ 8 pages citigroupgeo.com Jupiter Prospect Results... – Anadarko announced that the Jupiter-1 (APC 55% WI) exploration well, offshore Sierra Leone, encountered at least 98 net feet of hydrocarbon pay in the objective formation. This well is located more than 15 miles from the Mercury-1 discovery well, which in 2010 encountered 135 net feet of oil pay across two zones. The Jupiter-1 well has been preserved for possible future re-entry to conduct a drill stem test following the Mercury-2 appraisal well, which is next on the slate. ...But More Needed For Commercial Development – The announced net pay was at the low-end of the pre-drill expectation and encountered light oil and natural gas which yields uncertainty as to the actual level of liquids. We believe further appraisal success will be needed in the region to underpin a commercial development. The reserves needed for a stand-alone development of Jupiter is 200-300 MMBbls, in our view, depending on the number of wells that would be required if thicker pay is not found in future wells. Anadarko plans to conduct a drill stem test at either the Jupiter-1 or the Mercury-2 well depending on which appears to have better reservoir quality. The Mercury-2 appraisal should take 4-6 weeks to drill with results to follow. Lagosta-3 Ups Potential Offshore Mozambique – In addition, Anadarko announced another major success offshore Mozambique with its Lagosta-3 appraisal (APC 36.5% WI), which encountered ~580 net feet of natural gas pay in multiple zones. The well is located ~2.75 miles southeast of the Barquentine discovery and ~2 miles west of the Lagosta-1 discovery and 9 miles south of the Camarao-1 well. The Logosta-3 was a step-out well with the reservoir not apparent on seismic data, which in turn yields even more upside to the company’s recent 15-30+ Tcf resource estimate. This rig will next move to drill the Barquentine-4 appraisal while a second rig is preparing for a drill stem test of the previously announced Barquentine-4 appraisal. Also, we believe the company may move up the time line to seek some form of monetization of its interest in this region, i.e. bringing in a partner on a carried basis, and perhaps even this year. Leadership Transition – Anadarko also announced the promotion of Al Walker, the company’s President and Chief Operating Officer, to the position of President and CEO. Jim Hackett, will continue to serve in the newly created position of Executive Chairman for at least the next year. The leadership changes will be effective May 15, 2012. Hackett has always expressed the view that a CEO should serve in such capacity for about five years and so today’s announcement is not surprising. Near-Term Catalysts – We believe that an announcement regarding a settlement with Sonatrach on the Algerian tax dispute is imminent. We believe such a settlement will entail a reduced tax rate going forward or perhaps accelerated liftings but no upfront cash payment. A settlement could be valued at up to $8.00/share, in our opinion. Analyst Day Ahead – Management will provide more detail on the Anadarko’s operations along with 2012 production and spending guidance at its Analyst Day on March 13 in Houston, TX.