1. Anadarko Petroleum Corp. Buy Recommendation Presented by Mark Burroughs, Jr. 1/30/02

2. APC Background APC is an independent oil and gas exploration and production companyAPC is an independent oil and gas exploration and production company  Operates in U.S., Canada, Algeria, Tunisia, West Africa, Venezuela, Oman, Quatar and the North Atlantic Merged with Union Pacific in July 2000 to create largest U.S. independent with 2.1 billion BOE.Merged with Union Pacific in July 2000 to create largest U.S. independent with 2.1 billion BOE.

3. Financial Snapshot 1/30 stock price - $46.891/30 stock price - $46.89 52-week Range - $73-4352-week Range - $73-43 Mkt cap. - $11.8 bil.Mkt cap. - $11.8 bil. TTM P/E - $10.3TTM P/E - $10.3 Price/Book – 1.64Price/Book – 1.64 TTM Revenues - $11.2 bil. TTM EPS - $4.60 2002 EPS - $2.15 LT Debt - $4.7 bil. Debt/Equity - 64% LT Debt/Capitalization - 39%

4. Stock Performance

5. Comparable Analysis 10.3 P/E (01) vs. 17.5 for comparables10.3 P/E (01) vs. 17.5 for comparables 3.8 P/CF (01) vs. 5.4 for comparables3.8 P/CF (01) vs. 5.4 for comparables Diversified portfolio of oil and gas propertiesDiversified portfolio of oil and gas properties Many energy stock are getting hammeredMany energy stock are getting hammered

6. Risks Stock price somewhat correlated to energy pricesStock price somewhat correlated to energy prices  Depressed oil and gas prices reduce cash flow, production and reserve growth. Flat production growthFlat production growth Stock price could fall in shoulder months (April and May)Stock price could fall in shoulder months (April and May)

7. Investment Rationale Trading near 52-week low of $43.00Trading near 52-week low of $43.00 Strong management teamStrong management team Share buyback programShare buyback program Ramp up in Algerian production rate after 2002Ramp up in Algerian production rate after 2002  Exploration portfolio (California and GOM)  Supply weakness will catch up to bloated gas inventories. Long-term earnings capacityLong-term earnings capacity Take-over candidate from integrated majorTake-over candidate from integrated major

8. Valuation / Recommendation DCF value - $61.95DCF value - $61.95  Valuepro - 10% revenue growth rate Long-term investment (over one year)Long-term investment (over one year) Target price - $65 / Stop price - $35Target price - $65 / Stop price - $35 Buy 300 shares of APC at current market price Buy 300 shares of APC at current market price