Anadarko to Divest Chaney Dell, Midkiff/Benedum Midstream Assets

Anadarko Petroleum Corp. has reached an agreement with Atlas Pipeline Partners, L.P., whereby Anadarko will receive $1.85 billion and Atlas will acquire control of Anadarko's interests in the Chaney Dell and Midkiff/Benedum natural gas gathering systems and associated processing plants.

"We are extremely pleased with this agreement, which further validates the value of our remaining midstream assets," said Al Walker, Anadarko Sr. Vice President, Finance and CFO. "This transaction also represents the first significant step in our strategy to monetize our midstream assets, which also includes the formation and initial public offering of a midstream Master Limited Partnership (MLP) later this year. In 2006, cash flow before interest and taxes generated by these two systems and facilities totaled approximately $130 million."

The Chaney Dell system (100% owned by Anadarko) is located in central Oklahoma and southern Kansas. It consists of approximately 3,500 miles of gathering lines and processing plants with a combined processing capacity of approximately 230 million cubic feet of natural gas per day (MMcf/d). The Midkiff/Benedum gathering systems and processing plants (73% owned by Anadarko) are located in the Spraberry Trend of the Permian Basin near Midland, Texas. This system includes approximately 2,500 miles of gathering lines and processing plants with a combined capacity of approximately 170 MMcf/d. Anadarko has no equity gas production in either of these systems.

"Our divestiture program has now yielded approximately $12.5 billion in after-tax proceeds from announced and closed transactions," added Walker. "We remain on track to achieve our stated goal of $12 billion of net debt by year end. Coupled with the performance of our retained assets, we are confident in our outlook for the remainder of the year and in our ability to execute on our strategic plan."

The parties are forming two separate joint ventures to effect the transactions, which are expected to close in the third quarter of 2007, subject to customary closing conditions and adjustments. The effective date of the transactions is July 1, 2007.

UBS Investment Bank and Citi acted as financial advisors to Anadarko on this transaction.


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