e424b5
Filed pursuant to
Rule 424(b)(5)
Registration
No. 333-161370
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Maximum
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Title of each class
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aggregate
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Amount of
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of securities to be registered
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offering price
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registration
fee(1)
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6.375% Senior Notes due 2017
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$
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2,000,000,000
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142,600
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(1) |
Calculated in accordance with Rule 457(r) of the Securities
Act of 1933, as amended.
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Prospectus Supplement
(To prospectus dated August 14, 2009)
Anadarko Petroleum
Corporation
$2,000,000,000
6.375% Senior Notes due
2017
We are offering $2,000,000,000 aggregate principal amount of our
6.375% Senior Notes due 2017, or the notes. We will pay
interest on the notes on each March 15 and
September 15, beginning on March 15, 2011. The notes
will be issued only in registered form in minimum denominations
of $2,000 and integral multiples of $1,000 in excess of $2,000.
The notes will be our senior unsecured obligations and will rank
equally with all of our other existing and future senior
indebtedness that is not specifically subordinated to the notes,
and will be effectively subordinated to all of our future
secured indebtedness, including the senior secured revolving
credit facility described in more detail under Description
of other indebtedness, and all existing and future
indebtedness of our subsidiaries.
We may redeem, at our option, all or part of the notes at any
time, at a make-whole redemption price plus accrued and unpaid
interest to the date of redemption. See Description of the
notesOptional redemption. There are no sinking funds
for the notes.
The notes will not be listed on any securities exchange.
Currently, there is no public market for the notes.
Investing in the notes involves risks. See Risk
factors beginning on
page S-7
of this prospectus supplement and other information included or
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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Underwriting
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discounts and
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Proceeds to us,
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Price to
public(1)
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commissions
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before
expenses(1)
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Per note
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100.00
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%
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1.75
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%
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98.25
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Total
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$
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2,000,000,000
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$
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35,000,000
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$
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1,965,000,000
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(1)
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Plus accrued interest, if any, from
August 12, 2010.
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The underwriters expect to deliver the notes to purchasers in
book-entry form only, through the facilities of The Depository
Trust Company, Clearstream Banking S.A. and Euroclear Bank
S.A./N.V., as operator of the Euroclear System, on or about
August 12, 2010 against payment therefor in immediately
available funds.
Lead Book-Running
Managers
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J.P.
Morgan |
Barclays Capital |
Citi |
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Credit
Suisse |
Deutsche Bank Securities |
Goldman,
Sachs & Co. |
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Morgan
Stanley |
UBS Investment Bank |
Co-Managers
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BofA
Merrill Lynch |
DnB NOR Markets |
RBS |
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SOCIETE
GENERALE |
Wells Fargo Securities |
August 9, 2010
It is important for you to read and consider all information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus and other offering
material related to the notes in making your investment
decision. You should also read and consider the information in
the documents to which we have referred you in Where you
can find more information in this prospectus supplement
and in the accompanying prospectus.
You should rely only on the information contained or
incorporated by reference in this document or to which we have
referred you. We have not, and the underwriters have not,
authorized anyone to provide you with information that is
different. This document may only be used where it is legal to
sell these securities. The information contained or incorporated
by reference in this document may only be accurate on the date
of this document. Neither the delivery of this prospectus
supplement and the accompanying prospectus, nor any sale made
hereunder, shall under any circumstances create any implication
that there has been no change in our affairs since the date of
this prospectus supplement, or that the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus is accurate at any date other than the
date on the cover page of those documents.
Table of
contents
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Page
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Prospectus supplement
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S-ii
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S-ii
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S-1
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S-7
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S-11
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S-12
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S-13
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S-14
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S-16
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S-22
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S-27
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S-32
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S-33
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S-33
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S-33
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G-1
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Page
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Prospectus
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About this prospectus
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1
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Where you can find more information
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2
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Forward-looking statements
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3
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About us
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4
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Risk factors
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5
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Use of proceeds
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6
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Ratio of earnings to fixed charges and earnings to combined
fixed charges and preferred stock dividends
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7
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Description of debt securities
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8
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Description of capital stock
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25
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Description of depositary shares
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30
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Legal matters
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33
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Experts
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33
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About this
prospectus supplement
This prospectus supplement is a supplement to the accompanying
prospectus. This prospectus supplement and the accompanying
prospectus are part of a registration statement that we filed
with the Securities and Exchange Commission, or the SEC, using a
shelf registration process. Under the shelf process,
we may, from time to time, issue and sell to the public any
combination of the securities described in the accompanying
prospectus up to an indeterminate amount, of which this offering
is a part.
This prospectus supplement describes the specific terms of the
notes we are offering and certain other matters relating to us.
The accompanying prospectus gives more general information about
securities we may offer from time to time, some of which does
not apply to the notes we are offering. Generally, when we refer
to the prospectus, we are referring to this prospectus
supplement combined with the accompanying prospectus. If the
description of the offering varies between this prospectus
supplement and the accompanying prospectus, you should rely on
the information in this prospectus supplement.
Forward-looking
statements
We have made in this prospectus supplement and in the reports
and documents incorporated by reference forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, concerning our
operations, economic performance and financial condition. These
forward-looking statements include information concerning future
production and reserves, schedules, plans, timing of
development, contributions from oil and gas properties,
marketing and midstream activities and those statements preceded
by, followed by or that otherwise include the words
may, could, believes,
expects, anticipates,
intends, estimates,
projects, target, goal,
plans, objective, should or
similar expressions or variations on such expressions. For these
statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Although we believe that the
expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will
prove to have been correct.
These forward-looking statements involve risks and
uncertainties. Important factors that could cause actual results
to differ materially from our expectations include, but are not
limited to, our assumptions about energy markets, production
levels, reserve levels, operating results, competitive
conditions, technology, the availability of capital resources,
capital expenditures and other contractual obligations, the
supply and demand for and the price of natural gas, oil, natural
gas liquids, or NGLs, and other products or services, volatility
in the commodity-futures market, the weather, inflation, the
availability of goods and services, drilling risks, future
processing volumes and pipeline throughput, general economic
conditions, either internationally or domestically or in the
jurisdictions in which we or our subsidiaries are doing
business, legislative or regulatory changes, including
retroactive royalty or production tax schemes,
hydraulic-fracturing regulation, deepwater drilling and
permitting regulations, derivatives reform, changes in state,
federal and foreign corporate taxes, environmental regulation,
environmental risks and liability under federal, state, foreign,
and local environmental laws and regulations, the outcome of
events in the Gulf of Mexico related to the Deepwater Horizon
events, including the success of the relief wells in permanently
plugging the Macondo well, BP Exploration & Production
Inc.s response and
clean-up
efforts, current and potential legal
S-ii
proceedings, environmental or other obligations arising under
the joint operating agreement for the Macondo well, the Oil
Pollution Act of 1990 and other regulatory obligations, the
impact of the deepwater drilling moratorium and resulting
legislative and regulatory changes on our Gulf of Mexico and
international offshore operations, current and potential legal
proceedings, environmental or other obligations related to
Tronox Incorporated, the creditworthiness of our financial
counterparties as operating partners, the securities, capital or
credit markets, our ability to repay debt, the impact of
downgrades to our credit rating, our ability to post required
collateral, if requested, and our ability to improve our credit
rating, the outcome of any proceedings related to the Algerian
exceptional profits tax, the closing of the senior secured
revolving credit facility on terms similar to those described in
Description of other indebtedness, and other factors
discussed in Risk Factors and
Managements Discussion and Analysis of Financial
Condition and Results of Operations in our Annual Report
on
Form 10-K
for the year ended December 31, 2009, our Quarterly Reports
on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010, in this prospectus supplement under the heading Risk
factors and in other reports and documents incorporated by
reference into this prospectus supplement. We undertake no
obligation to publicly update or revise any forward-looking
statements whether as a result of new information, future
events, or otherwise.
S-iii
Summary
This summary does not contain all of the information that is
important to you. You should read carefully the entire
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference for a more complete
understanding of this offering. You should read Risk
factors beginning on
page S-7
of this prospectus supplement and Risk Factors in
our Annual Report on
Form 10-K
for the year ended December 31, 2009 and our Quarterly
Reports on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010 for more information about important risks that you should
consider before making a decision to purchase notes in this
offering.
Our, we, us and
Anadarko as used in this prospectus supplement and
the accompanying prospectus refer solely to Anadarko Petroleum
Corporation and its subsidiaries, unless otherwise indicated or
the context otherwise requires.
The Description of the notes section of this
prospectus supplement contains more detailed information about
the terms and conditions of the notes. We have defined certain
oil and gas industry terms used in this document in the
Glossary of oil and natural gas terms on
page G-1.
Anadarko
Petroleum Corporation
General
Anadarko Petroleum Corporation is among the worlds largest
independent oil and natural gas exploration and production
companies, with 2.3 billion BOE of proved reserves as of
December 31, 2009. Our primary business segments are
managed separately due to the nature of the products and
services, as well as to the unique technology, distribution and
marketing requirements. Our three operating segments are:
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Oil and gas exploration and productionThis segment
explores for and produces natural gas, crude oil, condensate and
NGLs. We have operations located onshore in the United States
and in the deepwater Gulf of Mexico, as well as in Algeria and
China, and activities in Brazil, Côte dIvoire, Ghana,
Indonesia, Mozambique, Sierra Leone and other countries.
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MidstreamThis segment provides gathering,
processing, treating and transportation services to Anadarko and
third-party oil and gas producers. We own and operate
natural-gas gathering, processing, treating and transportation
systems.
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MarketingThis segment sells most of our production,
as well as hydrocarbons purchased from third parties. We
actively market natural gas, oil and NGLs in the United States,
and market the oil we produce in Algeria and China.
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We own interests in several coal, trona (natural soda ash) and
industrial mineral properties through non-operated joint
ventures and royalty arrangements within and adjacent to our
land grant acreage position (Land Grant). The Land Grant
consists of land granted by the federal government in the
mid-1800s, which passes through Colorado and Wyoming and into
Utah. Within the Land Grant, we have fee ownership of the
mineral rights under approximately 8 million acres.
For a further description of our business, properties and
operations, you should read our Annual Report on
Form 10-K
for the year ended December 31, 2009, and our Quarterly
Reports on
S-1
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010, which are each incorporated by reference into this
prospectus supplement.
Our principal executive offices are located at 1201 Lake Robbins
Dr., The Woodlands, Texas 77380, and our telephone number is
(832) 636-1000.
Recent
developments
Anadarko
financing activities
In July 2010, we obtained firm commitments from a group of banks
for $6.5 billion in new financing in the form of a
$5.0 billion senior secured revolving credit facility that
would mature five years after closing (the senior secured
revolving credit facility), and a $1.5 billion senior
secured term loan facility that would mature six years after
closing (the senior secured term loan facility, and
together with the senior secured revolving credit facility, the
Facilities). As a result of this offering of the
notes, we will not enter into the senior secured term loan
facility. Upon closing of the senior secured revolving credit
facility, expected to occur in the third quarter of 2010, the
senior secured revolving credit facility will replace our
existing $1.3 billion revolving credit agreement, currently
scheduled to mature in March 2013. A portion of the net proceeds
of this offering will be used to repay the outstanding amount of
a note payable to Trinity Associates LLC, an unconsolidated
affiliate of the Company (the Midstream Subsidiary
Note). The net proceeds from this offering in excess of
such amount will be used for general corporate purposes,
including the refinancing of other near-term debt maturities.
The Midstream Subsidiary Note currently is scheduled to mature
in December 2012 and had approximately $1.3 billion
outstanding at June 30, 2010.
The senior secured revolving credit facility will be secured by
certain of our exploration and production assets located in the
United States, and 65% of the capital stock of certain of our
foreign subsidiaries. The closing of the senior secured
revolving credit facility is conditioned upon our issuing at
least $1.5 billion combined in principal amount of notes in
this offering
and/or the
senior secured term loan facility and the repayment of the
outstanding amount on the Midstream Subsidiary Note. The closing
of this offering is not conditioned upon the closing of the
Facilities.
The senior secured revolving credit facility will enhance our
liquidity position by providing substantial additional borrowing
capacity, if needed, relative to our existing revolving credit
agreement, and by refinancing a substantial portion of our debt
that is scheduled to mature over the next three years.
For a more detailed description of the senior secured revolving
credit facility, please see Description of other
indebtedness.
Asset
contribution to Western Gas Partners
On August 2, 2010, we agreed to a contribution of the
Wattenberg gathering system and related assets located in the DJ
Basin of northeastern Colorado to Western Gas Partners, LP
(NYSE: WES) for total consideration of $498 million. Under
the terms of the contribution agreement, we assigned to WES our
100% ownership interest in Kerr-McGee Gathering LLC, which owns
the Wattenberg gathering system and related facilities,
including the Fort Lupton processing plant.
S-2
WES financed the acquisition through (i) a bank-syndicated
$250 million three-year, unsecured term loan (the WES
Term Loan), (ii) a $200 million draw on
WESs revolving credit facility,
(iii) $23.1 million of cash on hand and (iv) the
issuance of 1,048,196 common units to Anadarko and 21,392
general partner units to Western Gas Holdings, LLC, WESs
general partner and a wholly owned subsidiary of Anadarko, at an
implied price of approximately $23.28 per unit. In addition, on
August 2, 2010, WES exercised the accordion feature on its
revolving credit facility to increase total commitments from
$350 million to $450 million, leaving
$140 million in available borrowing capacity under the
facility after the Wattenberg acquisition.
The WES Term Loan bears interest at LIBOR plus an applicable
margin ranging from 2.50% to 3.50% depending on WESs
consolidated leverage ratio, as defined in the WES Term Loan
agreement. The WES Term Loan contains various customary
covenants for WES, which are substantially similar to those in
WESs revolving credit facility.
S-3
Summary of the
offering
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Issuer |
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Anadarko Petroleum Corporation. |
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Securities offered |
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$2,000,000,000 aggregate principal amount of 6.375% Senior
Notes due 2017, or the notes. The notes will be issued in
denominations of $2,000 and integral multiples of $1,000 in
excess of $2,000. |
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Maturity date |
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The notes will mature on September 15, 2017. |
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Interest |
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Interest will accrue on the notes from August 12, 2010
until maturity at 6.375% per year. |
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Interest payment dates |
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March 15 and September 15 of each year, beginning on
March 15, 2011. |
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Use of proceeds |
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We estimate that, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us, our
net proceeds from this offering will be approximately
$1,962.4 million. |
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We will use a portion of the net proceeds of this offering to
repay outstanding amounts under the Midstream Subsidiary Note,
which as of June 30, 2010 was approximately
$1.3 billion. The net proceeds from this offering in excess
of such amount will be used for general corporate purposes,
including the refinancing of other near-term debt maturities.
Please see Use of proceeds. |
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Risk factors |
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See Risk factors beginning at
page S-7
of this prospectus supplement and Risk Factors in
our Annual Report on
Form 10-K
for the year ended December 31, 2009 and our Quarterly
Reports on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010 for a discussion of the risk factors you should carefully
consider before deciding to invest in the notes. |
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Indenture |
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We will issue the notes as a new series of debt securities under
the indenture between us and The Bank of New York Mellon
Trust Company, N.A., as indenture trustee. |
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Ranking |
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The notes will: |
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be senior unsecured obligations;
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rank equally in right of payment with all of our
other existing and future senior indebtedness that is not
specifically subordinated to the notes; and
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be effectively subordinated to any future secured
indebtedness, including the senior secured revolving credit
facility and all existing and future indebtedness of our
subsidiaries.
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As of June 30, 2010, on an as-adjusted basis after giving
effect to this offering, the closing of the senior secured
revolving credit facility and |
S-4
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the repayment of the approximately $1.3 billion outstanding
under the Midstream Subsidiary Note as of June 30, 2010: |
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we would have had approximately $12.1 billion
of total consolidated long-term debt, including the notes;
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other than amounts securing outstanding letters of
credit as described in Description of other
indebtedness, we would have had no secured indebtedness,
and we would have had available capacity under the senior
secured revolving credit facility of up to $5.0 billion,
all of which would be secured if borrowed; and
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of our total consolidated indebtedness,
approximately $3.7 billion would be primary indebtedness of
our subsidiaries, which would be structurally senior to the
notes.
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The indenture places no limitation on the amount of additional
senior indebtedness that may be incurred by us, which will rank
equally to the notes. In addition, although the covenants in the
indenture limit the amount of indebtedness that may be secured
by our principal properties and by equity interests in certain
of our subsidiaries without securing these notes pari
passu, they will not limit the overall amount of secured
indebtedness that we may incur. We expect from time to time to
incur additional indebtedness constituting senior indebtedness,
some or all of which may be secured indebtedness. |
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Optional redemption |
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We may redeem, at our option, all or part of the notes at any
time, at a make-whole redemption price plus accrued and unpaid
interest to the date of redemption. See Description of the
notesOptional redemption. |
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Covenants |
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We will issue the notes under an indenture containing covenants
for your benefit. These covenants restrict our ability, and our
ability to permit our subsidiaries, with certain exceptions, to
incur debt secured by liens. These covenants also restrict our
ability, with certain exceptions, to merge or consolidate with
another entity. |
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Further issuances |
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We may from time to time create and issue additional notes
having the same terms as the notes being issued in this
offering, so that such additional notes shall be consolidated
and form a single series with the notes. |
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Form |
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The notes will be represented by one or more global notes
registered in the name of The Depository Trust Company,
referred to as DTC, or its nominee. Beneficial interests in the
notes will be evidenced by, and transfers thereof will be
effected only through, records maintained by participants in DTC. |
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Trustee |
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The Bank of New York Mellon Trust Company, N.A. |
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Delivery and clearance |
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We will deposit the global notes representing the notes with the
trustee as custodian for DTC. You may hold an interest in the
notes through DTC, Clearstream Banking S.A. or Euroclear Bank
S.A./N.V., as operator of the Euroclear System, directly as a
participant of any such |
S-5
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system or indirectly through organizations that are participants
in such systems. |
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Governing law |
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New York. |
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Conflicts of interest |
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Affiliates of certain of the underwriters have made cash
contributions to Trinity, the lender under the Midstream
Subsidiary Note, in exchange for a Class B member
cumulative preferred interest in Trinity in connection with the
origination of the Midstream Subsidiary Note. We intend to use
at least 5% of the net proceeds of this offering to repay
indebtedness under the Midstream Subsidiary Note. Because, as a
result of our repayment of the Midstream Subsidiary Note, the
portion of the net proceeds to be paid to affiliates of
J.P. Morgan Securities Inc., Citigroup Global Markets Inc.,
Credit Suisse Securities (USA) LLC, Morgan Stanley &
Co. Incorporated, UBS Securities LLC and RBS Securities Inc.
will be at least 5% of the total net offering proceeds, not
including underwriting compensation, this offering will be made
in accordance with Rule 2720 of the Financial Industry
Regulatory Authority, or FINRA. Pursuant to Rule 2720, the
appointment of a qualified independent underwriter is not
necessary in connection with this offering, as the offered notes
will be rated investment grade by a nationally recognized
statistical rating agency. For more information, see
Conflicts of interest. |
S-6
Risk
factors
An investment in the notes involves risks. You should
consider carefully the risk factors included below and under the
caption Risk factors on page 5 of the
accompanying prospectus, as well as those discussed under the
caption Risk Factors in our Annual Report on
Form 10-K
for the year ended December 31, 2009 and our Quarterly
Reports on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010 together with all of the other information included in, or
incorporated by reference into, this prospectus supplement, when
evaluating an investment in the notes.
Risks relating to
the notes
We may not be
able to generate enough cash flow to meet our debt
obligations.
We expect our earnings and cash flow to vary significantly from
year to year due to the nature of our industry. As a result, the
amount of debt that we can manage in some periods may not be
appropriate for us in other periods. Additionally, our future
cash flow may be insufficient to meet our debt obligations and
other commitments, including our obligations under the notes.
Any insufficiency could negatively impact our business. A range
of economic, competitive, business and industry factors will
affect our future financial performance, and, as a result, our
ability to generate cash flow from operations and to pay our
debt, including our obligations under the notes. Many of these
factors, such as oil and gas prices, economic and financial
conditions in our industry and the global economy competitive,
initiatives of our competitors, are beyond our control.
Furthermore, potential costs and liabilities associated with the
Deepwater Horizon events could materially impact our financial
position, results of operations, cash flows, growth and
prospects. Please see Note 2Deepwater Horizon
Events, Note 3Deepwater Drilling Moratorium
and Note 12Commitments and Contingencies
of Notes to Consolidated Financial Statements as
well as the risk factors discussed under the caption Risk
Factors in our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010 for a detailed
discussion of the Deepwater Horizon events and risks associated
therewith. If we do not generate enough cash flow from
operations to satisfy our debt obligations, we may have to
undertake alternative financing plans, such as:
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selling assets;
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reducing or delaying capital investments;
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seeking to raise additional capital; or
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refinancing or restructuring our debt.
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Under the terms of our new senior secured revolving credit
facility, we will be subject to financial covenants, including a
minimum collateral coverage ratio. See Description of
other indebtednessThe FacilitiesCovenants and events
of default. Because any borrowing under our senior secured
revolving facility will require that there be no default or
event of default under that facility, including under the
minimum collateral coverage ratio, any decreases in the value of
the collateral we provide under the facility caused by decreases
in the value of our proved reserves or by other factors could
adversely affect our ability to borrow under the senior secured
revolving credit facility and our financial position and
liquidity.
Our inability to borrow under the senior secured revolving
credit facility, to generate sufficient cash flow to satisfy our
debt obligations, including our obligations under the notes, or
to obtain
S-7
alternative financing, could materially and adversely affect our
business, financial condition, results of operations and
prospects.
Because a
significant portion of our operations is conducted through our
subsidiaries, our ability to service our debt is largely
dependent on our receipt of distributions or other payments from
our subsidiaries.
A significant portion of our operations is conducted through our
subsidiaries. As a result, our ability to service our debt is
largely dependent on the earnings of our subsidiaries and the
payment of those earnings to us in the form of dividends, loans
or advances and through repayment of loans or advances from us.
Our subsidiaries do not have any obligation to pay amounts due
on the notes or our other indebtedness or to make funds
available for that purpose.
Payments to us by our subsidiaries will be contingent upon our
subsidiaries earnings and other business considerations
and may be subject to statutory or contractual restrictions. In
addition, there may be significant tax and other legal
restrictions on the ability of our
non-U.S. subsidiaries
to remit money to us.
We and our
subsidiaries may incur substantially more debt.
We and our subsidiaries may be able to incur significant
additional indebtedness in the future. Although the credit
agreement that will govern our senior secured revolving credit
facility will contain restrictions on the incurrence of
additional indebtedness, these restrictions will be subject to a
number of qualifications and exceptions, and the additional
indebtedness incurred in compliance with these restrictions
could be substantial. If we incur any additional indebtedness
that ranks equally with the notes, subject to collateral
arrangements, the holders of that debt will be entitled to share
ratably with you in any proceeds distributed in connection with
any insolvency, liquidation, reorganization, dissolution or
other winding up of our company. This may have the effect of
reducing the amount of proceeds paid to you. These restrictions
also will not prevent us from incurring obligations that do not
constitute indebtedness. In addition, our senior secured
revolving credit facility will provide for commitments of
$5.0 billion. All borrowings under the senior secured
revolving credit facility will be secured indebtedness. If new
debt is added to our current debt levels, the related risks that
we now face could intensify.
The terms of the
credit agreement governing our senior secured revolving credit
facility may restrict our current and future operations,
particularly our ability to respond to changes or to take
certain actions.
The credit agreement governing our senior secured revolving
credit facility will contain a number of restrictive covenants
that impose significant operating and financial restrictions on
us and may limit our ability to engage in acts that may be in
our long-term best interest, including restrictions on our
ability to:
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incur additional indebtedness;
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pay dividends or make other distributions or repurchase or
redeem capital stock;
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prepay, redeem or repurchase certain debt;
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make loans and investments;
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S-8
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sell assets;
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incur liens;
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enter into transactions with affiliates;
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alter the businesses we conduct;
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enter into agreements restricting our subsidiaries ability
to pay dividends; and
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consolidate, merge or sell all or substantially all of our
assets.
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In addition, the restrictive covenants in the credit agreement
governing our senior secured revolving credit facility will
require us to maintain specified financial ratios and satisfy
other financial condition tests. Our ability to meet those
financial ratios and tests can be affected by events beyond our
control.
A breach of the covenants under the credit agreement governing
our senior secured revolving credit facility could result in an
event of default under the credit agreement. Such a default may
allow the creditors to accelerate any related debt and may
result in the acceleration of any other debt to which a
cross-acceleration provision applies, including the notes. In
addition, an event of default under the credit agreement
governing our senior secured revolving credit facility would
permit the lenders to terminate all commitments to extend
further credit under that facility. Furthermore, if we were
unable to repay any amounts due and payable under our senior
secured revolving credit facility, those lenders could proceed
against the collateral granted to them to secure that
indebtedness. In the event our lenders or noteholders accelerate
the repayment of our borrowings, we and our subsidiaries may not
have sufficient assets to repay that indebtedness. As a result
of these restrictions, we may be:
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limited in how we conduct our business;
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unable to raise additional debt or equity financing to operate
during general economic or business downturns; or
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unable to compete effectively or to take advantage of new
business opportunities.
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These restrictions may affect our ability to grow in accordance
with our strategy.
The claims of
creditors of our subsidiaries will be structurally senior to
claims of holders of the notes.
The notes will not be guaranteed by any of our existing or
subsequently acquired or organized subsidiaries. Our
subsidiaries are separate and distinct legal entities. Our right
to receive any assets of any of our subsidiaries upon the
insolvency, liquidation or reorganization of any of our
subsidiaries, and therefore the right of the holders of the
notes to participate in those assets, will be structurally
subordinated to the claims of that subsidiarys creditors.
In addition, even if we are a creditor of any of our
subsidiaries, our rights as a creditor would be effectively
subordinated to any security interest in the assets of our
subsidiaries to the extent of the value of the assets. In
addition, the notes will be structurally subordinated to
indebtedness of our subsidiaries, including the guarantees by
certain of our subsidiaries of any borrowings under our senior
secured revolving credit facility. As of June 30, 2010, on
an as-adjusted basis after giving effect to this offering and
the repayment of the Midstream Subsidiary Note, our subsidiaries
S-9
would have had outstanding approximately $3.7 billion of
indebtedness, excluding intercompany indebtedness.
The notes will be
effectively subordinated to all of our future secured debt,
including the senior secured revolving credit
facility.
The notes will not be secured by any of our property or assets.
Thus, by owning a debt security, holders of the notes offered by
this prospectus supplement will be our unsecured creditors. The
indenture governing the notes described in this prospectus
supplement and the accompanying prospectus will, subject to some
limitations, permit us to incur secured indebtedness, and the
notes will be effectively subordinated to any future secured
indebtedness we may incur to the extent of the value of the
collateral securing such indebtedness. As of June 30, 2010,
on an as-adjusted basis after giving effect to this offering and
the closing of the senior secured revolving credit facility, we
would have had no outstanding secured indebtedness other than
amounts securing outstanding letters of credit as described in
Description of other indebtedness. Any borrowings
under our $5.0 billion senior secured revolving credit
facility will be secured. In addition, we may incur additional
secured debt in the future.
A downgrade in
our credit rating could negatively impact our cost of and
ability to access capital.
Standard and Poors and Fitch Ratings affirmed their
ratings of our senior unsecured debt on August 6, 2010 and
on August 9, 2010 Moodys Investors Service affirmed
its rating of our senior unsecured debt. We cannot assure you
that our credit ratings will not be downgraded in the future. A
downgrade in our credit ratings could negatively impact our cost
of capital or our ability to effectively execute aspects of our
strategy. If we were to be downgraded, it could be difficult for
us to raise debt in the public debt markets and the cost of any
new debt could be much higher than our outstanding debt.
Active trading
markets for the notes may not develop, which could make it more
difficult for holders of the notes to sell their notes and/or
result in a lower price at which holders would be able to sell
their notes.
There is currently no established trading market for the notes,
and the notes will not be listed on any exchange or quoted on
any automated dealer quotation system. There can be no assurance
as to the liquidity of any markets that may develop for the
notes, the ability of the holders of the notes to sell their
notes or the prices at which such holders would be able to sell
their notes. If such markets were to exist, the notes could
trade at prices that may be lower than the initial market values
of the notes depending on many factors, including prevailing
interest rates and our business performance. Certain of the
underwriters have advised us that they currently intend to make
a market in the notes after the consummation of this offering,
as permitted by applicable laws and regulations. However, none
of the underwriters is obligated to do so, and any market-making
with respect to the notes may be discontinued at any time
without notice. See Underwriting.
S-10
Use of
proceeds
We expect to receive net proceeds from this offering of
approximately $1,962.4 million, after deducting the
underwriting discounts and commissions and estimated offering
expenses payable by us. We will use a portion of the net
proceeds from this offering to repay amounts outstanding under
the Midstream Subsidiary Note, which as of June 30, 2010
was approximately $1.3 billion. The net proceeds from this
offering in excess of such amount will be used for general
corporate purposes, including the refinancing of other near-term
debt maturities.
The Midstream Subsidiary Note has an initial maturity date of
December 27, 2012. Interest on the Midstream Subsidiary
Note is based on the three-month LIBOR plus a margin that varies
based on our credit rating. As of July 1, 2010, the
effective rate under the Midstream Subsidiary Note was 1.73%.
S-11
Capitalization
The following table sets forth our capitalization as of
June 30, 2010:
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on a consolidated historical basis; and
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on an as-adjusted basis to give effect to (i) the
completion of this offering, (ii) our application of the
estimated proceeds from this offering in the manner described in
Use of proceeds and (iii) the replacement of
our existing $1.3 billion revolving credit agreement with
the senior secured revolving credit facility, expected to occur
in the third quarter of 2010.
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(unaudited)
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As of June 30,
2010
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(millions of dollars)
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Historical
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As adjusted
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Cash and cash
equivalents(1)
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$
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3,374
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$
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3,987
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Short-term debt:
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Current maturities of long-term debt
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$
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909
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$
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909
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Total short-term debt
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909
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909
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Long-term debt, less current portion:
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Senior secured long-term
debt(2)
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Existing revolving credit
agreement(2)(3)
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Other historical long-term debt
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10,093
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10,093
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Notes offered hereby
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2,000
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Total long-term debt, less current portion
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10,093
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12,093
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Midstream Subsidiary Note Payable to Related Party
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1,349
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Total debt
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$
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12,351
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$
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13,002
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Stockholders equity:
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Common stock, par value $0.10 per share (1.0 billion shares
authorized, 507.8 million shares issued)
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51
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51
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Paid-in capital
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7,407
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7,407
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Retained earnings
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14,454
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14,454
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Treasury stock (12.9 million shares)
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(750
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)
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(750
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)
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Accumulated other comprehensive income (loss)
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Gain (losses) on derivative instruments
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(88
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)
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(88
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)
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Pension and other post-retirement plans
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(419
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)
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(419
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)
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Total accumulated other comprehensive income (loss)
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(507
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)
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(507
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)
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Total stockholders equity
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$
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20,655
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$
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20,655
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Noncontrolling interest
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550
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550
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Total equity
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$
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21,205
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$
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21,205
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Total capitalization
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$
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33,556
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$
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34,207
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(1)
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This does not reflect payment of
approximately $187 million of estimated fees and expenses
associated with entering into the Facilities. Please see
Description of other indebtedness.
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(2)
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Upon the closing of the senior
secured revolving credit facility, we will have available
borrowings of up to $5.0 billion, all of which would be
secured if borrowed.
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(3)
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As of August 6, 2010, our
existing revolving credit agreement had no outstanding
borrowings and supported $295 million of outstanding
letters of credit. The outstanding letters of credit on the
existing revolving credit agreement will be transferred to the
senior secured revolving credit facility upon the closing
thereof.
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S-12
Ratio of earnings
to fixed charges
The following table sets forth our ratio of earnings to fixed
charges for the periods indicated on a consolidated historical
basis.
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Year ended December 31,
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Six months ended June 30,
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2009(1)
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2008
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2007
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2006
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2005
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2010
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2009(2)
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.72x
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4.81x
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4.66x
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5.24x
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12.50x
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2.31x
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.54x
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(1)
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As a result of our net loss in
2009, our earnings did not cover fixed charges by
$299 million.
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(2)
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As a result of our net loss in the
six months ended June 30, 2009, our earnings did not cover
fixed charges by $1.1 billion.
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For purposes of computing the ratio of earnings to fixed
charges, earnings are defined as:
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income from continuing operations before income taxes and equity
method earnings of affiliates; plus
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fixed charges and distributed income of equity investees.
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Fixed charges are defined as the sum of the following:
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interest expense (including amounts capitalized);
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amortization of debt discount and issuance cost (expensed and
capitalized); and
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that portion of rental expense which we believe to be
representative of an interest factor.
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S-13
Description of
other indebtedness
The
Facilities
In July 2010, we obtained firm commitments from a group of banks
for $6.5 billion in new financing in the form of a
$5.0 billion senior secured revolving credit facility that
would mature in five years after closing and a $1.5 billion
senior secured term loan facility that would mature in six years
after closing. As a result of this offering of the notes, we
will not enter into the senior secured term loan facility. We
anticipate that the senior secured revolving credit facility
will have terms as generally outlined in the summary of terms
and conditions described below.
Maturity and
interest rates
The senior secured revolving credit facility will mature on the
fifth anniversary of the issue date. The senior secured
revolving credit facility will bear interest under one of two
rate options, at our election, either (i) the greatest of
(a) the prime rate of JPMorgan Chase Bank, N.A.,
(b) the federal funds rate plus 0.5% and (c) one-month
LIBOR plus 1.0%, or (ii) LIBOR, in each case plus an
applicable margin. The applicable margin for the senior secured
revolving credit facility will vary depending on our corporate
ratings (i) in the case of LIBOR loans, from 2.75% to 3.75%
or (ii) in the case of base rate loans, from 1.75% to
2.75%. In addition, a commitment fee will be payable on the
average daily unused portion of the senior secured revolving
credit facility. The commitment fee will initially be equal to
0.50%, depending on our corporate ratings, and thereafter will
equal a percentage that will vary depending on our corporate
ratings, up to a maximum of 0.75%. As of August 6, 2010,
approximately $295 million of outstanding letters of credit
supported by our existing revolving credit agreement will be
transferred to the senior secured revolving credit facility upon
the closing thereof, which will reduce the amount available for
borrowing thereunder accordingly.
Under certain circumstances in which the collateral coverage
ratio under the senior secured revolving credit facility is less
than a specified level, the commitments under the senior secured
revolving credit facility may be reduced permanently.
Covenants and
events of default
The senior secured revolving credit facility will contain
various covenants with which we must comply, including, but not
limited to, limitations on incurrence of indebtedness,
investments, liens on assets, transactions with affiliates,
mergers, consolidations, sales of assets and other provisions
customary in similar types of agreements. We will also be
required to maintain, on a consolidated basis, (1) a
maximum leverage ratio of total debt to adjusted EBITDAX of 4.5
to 1.0 at the end of each four-quarter period ending on or
before December 31, 2011 and 4.0 to 1.0 thereafter,
(2) a minimum ratio of current assets to current
liabilities, subject to adjustments, of not less than 1.0 to 1.0
at the end of each fiscal quarter and (3) a minimum
collateral coverage ratio of 1.75 to 1.0 at the end of each
quarter, based on the annually determined present value of
proved reserves included in exploration and production assets in
the United States to be mortgaged to the lenders and the
annually determined market value of oil and gas properties owned
directly or indirectly by the foreign subsidiaries, 65% of whose
capital stock will be pledged to the lenders. Additionally, the
credit agreement for the senior secured revolving
S-14
credit facility will contain other customary conditions,
representations and warranties, events of default and
indemnification provisions.
Guarantees and
security
The indebtedness under the senior secured revolving credit
facility, along with certain hedging obligations owed to lenders
or their affiliates and certain treasury management obligations
owed to lenders or their affiliates, will be guaranteed by
certain of our wholly owned domestic subsidiaries (the
subsidiary guarantors) and secured by a perfected
first priority security interest in certain of our and the
subsidiary guarantors exploration and production assets
located in the United States, as well as 65% of the capital
stock of certain foreign subsidiaries. While the sum of the
assigned value will result in an initial coverage ratio of not
less than 3.0x the aggregate amount of the senior secured
revolving credit facility, the amount of debt secured by
principal properties, as defined under each of our
existing indentures, will be contractually limited to an amount
which will not violate our existing lien restrictions in our
existing indentures.
Other
indebtedness
Please see Note 10 to our audited consolidated financial
statements included in our Annual Report on
Form 10-K
for the year ended December 31, 2009, Note 10 to our
unaudited consolidated financial statements included in our
Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010 and
SummaryRecent developments in this prospectus
supplement for information regarding additional indebtedness of
our company and our subsidiaries.
S-15
Description of
the notes
In this section, references to Anadarko Petroleum
Corporation, we, our and
us mean only Anadarko Petroleum Corporation and do
not include its consolidated subsidiaries.
We are offering our 6.375% Senior Notes due 2017 pursuant
to this prospectus supplement. The notes will be issued as a new
series of debt securities under the indenture, dated as of
September 19, 2006, which we refer to as our indenture, by
and between us and The Bank of New York Mellon
Trust Company, N.A., as the trustee. As of June 30,
2010, there are nine other series of senior notes outstanding
under the indenture aggregating $8.6 billion in principal
amount, including $2.4 billion in aggregate principal
amount at maturity of Zero Coupon Notes due 2036 which have a
current accreted value of $0.6 billion. This prospectus
supplement summarizes specific financial and other terms that
will apply to the notes; terms that apply generally to all of
our debt securities are described in Description of debt
securities in the accompanying prospectus. The terms
described here supplement those described in the accompanying
prospectus and, if the terms described here are inconsistent
with those described there, the terms described here are
controlling.
General
The notes offered hereby will be issued in an initial aggregate
principal amount of $2,000,000,000 and will mature on
September 15, 2017. The notes will be issued only in fully
registered form without coupons in minimum denominations of
$2,000 and integral multiples of $1,000 in excess of $2,000. The
notes will not be entitled to any sinking fund. The issue date
for the notes is expected to be August 12, 2010.
Interest on the notes will accrue at the rate per annum shown on
the cover of this prospectus supplement from August 12,
2010, or from the most recent date to which interest has been
paid or provided for, payable semi-annually on March 15 and
September 15 of each year, beginning on March 15,
2011, to the persons in whose names the notes are registered in
the security register at the close of business on the
March 1 or September 1 preceding the relevant interest
payment date. Interest will be computed on the notes on the
basis of a
360-day year
of twelve
30-day
months.
The indenture does not limit the amount of notes that we may
issue. We may, without notice to or the consent of the
registered holders of the notes, create and issue additional
notes having identical terms and conditions as the notes being
issued in this offering in all respects (such notes are referred
to as the additional notes), except for the price to
public, the date of issuance, the payment of interest accruing
prior to the issue date of such additional notes and the first
payment of interest following the issue date of such additional
notes. Any such additional notes shall be consolidated and form
a single series with the notes being issued in this offering,
including for purposes of voting and redemptions.
Under the indenture, a business day means a day that is not a
Saturday or Sunday, and that is not a day on which banking
institutions are authorized or obligated by law or executive
order to close in New York, New York. If an interest payment
date or a redemption date occurs on a date that is not a
business day, payment will be made on the next business day and
no additional interest will accrue.
The notes are subject to defeasance and covenant defeasance by
us, subject to the terms described in the accompanying
prospectus.
S-16
Ranking
The notes will be our senior unsecured obligations and will rank
equally in right of payment with all of our other existing and
future senior indebtedness that is not specifically subordinated
to the notes. The notes will be effectively subordinated to all
of our future secured indebtedness and structurally subordinated
to all existing and future indebtedness of our subsidiaries.
Any future claims of holders of our secured indebtedness with
respect to assets securing such indebtedness will be prior to
any claim of the holders of the notes with respect to those
assets.
Our subsidiaries are separate and distinct legal entities from
us. Our subsidiaries have no obligation to pay any amounts due
on the notes or to provide us with funds to meet our payment
obligations on the notes, whether in the form of dividends,
distributions, loans or other payments. In addition, any payment
of dividends, loans or advances by our subsidiaries could be
subject to statutory or contractual restrictions. Payments to us
by our subsidiaries will also be contingent upon our
subsidiaries earnings and business considerations. Our
right to receive any assets of any subsidiary of ours upon its
bankruptcy, liquidation or reorganization, and therefore the
right of the holders of the notes to participate in those
assets, will be effectively subordinated to the claims of that
subsidiarys creditors, including trade creditors. In
addition, even if we are a creditor of any of our subsidiaries,
our right as a creditor would be subordinate to any security
interest in such assets of our subsidiaries and any indebtedness
of our subsidiaries senior to that held by us.
As of June 30, 2010, on an as-adjusted basis after giving
effect to this offering, the closing of the senior secured
revolving credit facility and the repayment of the approximately
$1.3 billion outstanding under the Midstream Subsidiary
Note as of June 30, 2010:
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we would have had approximately $12.1 billion of total
consolidated long-term debt, including the notes;
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other than amounts securing outstanding letters of credit as
described in Description of other indebtedness, we
would have had no secured indebtedness, and we would have had
available capacity under the senior secured revolving credit
facility of up to $5.0 billion, all of which would be
secured if borrowed; and
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of our total consolidated indebtedness, approximately
$3.7 billion would be primary indebtedness of our
subsidiaries, which would be structurally senior to the notes.
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The indenture does not limit our ability, or the ability of our
subsidiaries, to incur additional indebtedness. The indenture
and the terms of the notes do not contain any covenants (other
than those described in this prospectus supplement and the
accompanying prospectus) designed to afford holders of any notes
protection in a highly leveraged or other transaction involving
us that may adversely affect holders of the notes.
Optional
redemption
We may, at our option, at any time and from time to time, redeem
the notes, in whole or in part, upon not less than 30 nor more
than 60 days prior notice mailed by first-class mail
to each holders registered address, at a redemption price
equal to the greater of (1) 100% of the principal amount of
the notes to be redeemed or (2) as determined by the
quotation agent described below plus, in each case, accrued
interest on the notes to be redeemed to the date on which the
notes are to be redeemed.
S-17
The quotation agent will determine the sum of the present values
of the remaining scheduled payments of principal and interest on
the notes, not including any portion of these payments of
interest accrued as of the date on which the notes are to be
redeemed, discounted from the maturity date to the date on which
the notes are to be redeemed on a semi-annual basis assuming a
360-day year
consisting of twelve
30-day
months, at the adjusted treasury rate described below plus
50 basis points.
The quotation agent will utilize the following procedures to
calculate the adjusted treasury rate. We will appoint
J.P. Morgan Securities Inc. or its successor and two or
more other primary U.S. Government securities dealers in
the United States as reference dealers, and we will appoint
J.P. Morgan Securities Inc. or its successor to act as our
quotation agent. If J.P. Morgan Securities Inc. or its
successor is no longer a primary U.S. Government securities
dealer, we will substitute another primary U.S. Government
securities dealer in its place as a reference dealer
and/or as
quotation agent. The trustee will act as calculation agent.
The quotation agent will select a United States Treasury
security which has a maturity comparable to the remaining
maturity of the notes to be redeemed which would be used in
accordance with customary financial practice to price new issues
of corporate debt securities with a maturity comparable to the
remaining maturity of such notes. The reference dealers will
provide the quotation agent, the calculation agent and the
trustee with the bid and ask prices for that comparable United
States Treasury security as of 5:00 p.m. on the third
business day before the redemption date. The calculation agent
will calculate the average of the bid and ask prices provided by
each reference dealer, eliminate the highest and the lowest
reference dealer quotations and then calculate the average of
the remaining reference dealer quotations. However, if the
calculation agent obtains fewer than three reference dealer
quotations, it will calculate the average of all the reference
dealer quotations and not eliminate any quotations. We call this
average quotation the comparable treasury price. The adjusted
treasury rate will be the semi-annual equivalent yield to
maturity of a security whose price, expressed as a percentage of
its principal amount, is equal to the comparable treasury price.
If the optional redemption date is after the close of business
on an interest record date and on or before the related interest
payment date, the accrued and unpaid interest, if any, will be
paid to the person in whose name the note is registered at the
close of business on such record date, and no additional
interest will be payable to holders whose notes will be subject
to redemption by us.
In the case of any partial redemption, selection of the notes
for redemption will be made by the trustee by such method as the
trustee deems to be fair and appropriate, although no note of
$2,000 in original principal amount or less will be redeemed in
part. If any note is to be redeemed in part only, the notice of
redemption relating to such note will state the portion of the
principal amount thereof to be redeemed. A new note in principal
amount equal to the unredeemed portion thereof will be issued in
the name of the holder thereof upon cancellation of the original
note.
Covenants
The indenture governing the notes contains certain covenants,
including covenants that restrict our ability, and our ability
to permit certain of our subsidiaries, to create or incur debt
secured by liens. See Description of debt securities
in the accompanying prospectus.
S-18
Limitations on
liens
The following is a summary of the limitations on liens contained
in the indenture. The following summary supersedes the summary
included in the accompanying prospectus under Description
of debt securitiesLimitations on liens.
We will not, and will not permit any restricted subsidiary (as
defined below) to, incur, issue, assume or guarantee any
indebtedness for money borrowed (all such indebtedness for money
borrowed is referred to as debt), if such debt is
secured by a mortgage (as defined below) on any principal
property (as defined below) or on any equity interests in any
restricted subsidiary (as defined below), without effectively
providing that the notes (together with, if we shall so
determine, any other debt or other of our obligations or the
obligations of such restricted subsidiary which is not
subordinate in right of payment to the prior payment in full of
the notes) shall be secured equally and ratably with (or prior
to) such secured debt, so long as such secured debt shall be so
secured; provided that, we and any restricted subsidiary may
incur, issue, assume or guarantee debt secured by a mortgage on
any principal property or on any equity interests in any
restricted subsidiary without so securing the notes if, after
giving effect thereto, the aggregate amount of all debt so
secured would not exceed 15% of our consolidated net tangible
assets (as defined below) as of a date within 150 days
prior to such determination; provided, however, that this
restriction shall not apply to, and there shall be excluded from
secured debt in any computation under this covenant, debt
secured by:
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mortgages existing at the date of the indenture;
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mortgages on property of, or any equity interests in, any person
(as defined below) existing at the time such person becomes a
restricted subsidiary;
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mortgages in favor of Anadarko Petroleum Corporation or any
restricted subsidiary;
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mortgages on property or equity interests existing at the time
of acquisition thereof (including acquisition through merger,
consolidation or other reorganization) or to secure the payment
of all or any part of the purchase price thereof or construction
thereon or to secure any debt incurred prior to, at the time of,
or within 180 days after the later of the acquisition, the
completion of construction or the commencement of full operation
of such property or within 180 days after the acquisition
of such equity interests for the purpose of financing all or any
part of the purchase price thereof or construction thereon, it
being understood that if a commitment for such financing is
obtained prior to or within such
180-day
period, the applicable mortgage shall be deemed to be included
in this clause whether or not such mortgage is created within
such 180-day
period;
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mortgages on property owned or leased by us or a restricted
subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any
State thereof, or in favor of any other country or any political
subdivision thereof, or in favor of holders of securities issued
by any such entity, pursuant to any contract or statute
(including without limitation, mortgages or easements on
property of ours or of any restricted subsidiary related to the
financing of such property pursuant to Section 103 of the
Internal Revenue Code of 1954, as amended, or any successor
section thereto);
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mortgages to secure partial, progress, advance or other payments
or any debt incurred for the purpose of financing all or any
part of the purchase price or cost of construction, development
or repair, alteration or improvement of the property subject to
such mortgage if the
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S-19
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commitment for the financing is obtained not later than one year
after the latter of the completion of or the placing into
operation (exclusive of test and
start-up
periods) of such constructed, developed, repaired, altered or
improved property;
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mortgages on oil, gas, coal or other minerals in place or on
geothermal resources in place, or on related leasehold or other
property interests, which are incurred to finance development,
production or acquisition costs (including but not limited to
mortgages securing advance sale obligations);
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mortgages on equipment used or usable for drilling, servicing or
operation of oil, gas, coal or other mineral properties or of
geothermal properties;
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mortgages arising in connection with contracts or subcontracts
with, or made at the request of, the United States of America,
any State thereof or any department, agency or instrumentality
of the United States or any State thereof; and
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any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any
mortgage referred to in the foregoing clauses of this covenant,
inclusive or of any debt secured thereby; provided, however,
that such extension, renewal or replacement mortgage shall be
limited to all or a part of substantially the same property or
equity interests that secured the mortgage extended, renewed or
replaced (plus improvements on such property).
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The following transactions shall not be deemed to create debt
secured by a mortgage:
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the sale or other transfer of oil, gas, coal or other minerals
in place for a period of time until, or in an amount such that,
the transferee will realize therefrom a specified amount of
money (however determined) or a specified amount of oil, gas,
coal or other minerals, or the sale or other transfer of any
other interest in property of the character commonly referred to
as an oil, gas, coal or other mineral payment or a production
payment; and
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the sale or other transfer by us or a restricted subsidiary of
properties to a partnership, joint venture or other entity
whereby we or such restricted subsidiary would retain partial
ownership of such properties.
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For purposes of the foregoing discussion of limitations on
liens, the following definitions are applicable:
Consolidated net tangible assets means the
aggregate amount of assets of Anadarko Petroleum Corporation and
its restricted subsidiaries (less applicable reserves and other
properly deductible items but including investments in
non-consolidated persons) after deducting therefrom (a) all
current liabilities (excluding current maturities of funded debt
(as defined below) and any current liabilities constituting
funded debt by reason of being renewable or extendible at the
option of the obligor) and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and
other like intangibles, all as set forth on a consolidated
balance sheet of Anadarko Petroleum Corporation and its
consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
Funded debt means all indebtedness for money
borrowed which is not by its terms subordinated in right of
payment to the prior payment in full of the notes, having a
maturity of more than 12 months from the date of issuance
or having a maturity of less than 12 months from such date
of issuance but by its terms being (i) renewable or
extendible beyond 12 months from such date at the option of
the obligor or (ii) issued in connection with a commitment
by a bank
S-20
or other financial institution to lend so that such indebtedness
is treated as though it had a maturity in excess of
12 months pursuant to generally accepted accounting
principles.
Mortgage means any mortgage, pledge, lien,
security interest, conditional sale or other title retention
agreement or other similar encumbrance.
Person means any individual, corporation,
partnership, joint venture, trust, unincorporated organization
or government or any agency or political subdivision thereof.
Principal property means any property
interest in oil, gas, coal or other minerals in place or in
geothermal resources in place; natural gas, natural gas liquids
or crude oil pipeline; distribution system; gathering system;
storage facility; or processing plant which is located in the
United States or offshore the United States and owned by us or
any restricted subsidiary, the gross book value (without
deduction of any depreciation or depletion reserves) of which on
the date as of which the determination is being made exceeds 5%
of consolidated net tangible assets, other than any such
property interest; natural gas, natural gas liquids or crude oil
pipeline; distribution system; gathering system; storage
facility; or processing plant or any portion of the foregoing,
which, in the opinion of our board of directors, is not of
material importance to the total business conducted by Anadarko
Petroleum Corporation and its subsidiaries as an entirety.
Restricted subsidiary means a subsidiary (as
defined below) of Anadarko Petroleum Corporation except a
subsidiary (a) which neither transacts any substantial
portion of its business nor regularly maintains any substantial
portion of its fixed assets within the United States or offshore
the United States or (b) which is engaged primarily in
financing the operations of Anadarko Petroleum Corporation or
its subsidiaries, or both.
Subsidiary means any person a majority of the
combined voting power of the total outstanding ownership
interests in which is, at the time of determination,
beneficially owned or held, directly or indirectly, by Anadarko
Petroleum Corporation or one or more other subsidiaries. For
this purpose, voting power means power to vote in an
ordinary election of directors (or, in the case of a person that
is not a corporation, ordinarily to appoint or approve the
appointment of persons holding similar positions), whether at
all times or only as long as no senior class of ownership
interests has such voting power by reason of any contingency.
Events of
default
The events of default with respect to the notes are described in
the accompanying prospectus under Description of debt
securitiesDefault, remedies and waiver of
defaultEvents of default.
Book-entry
notes
We will issue the notes only in book-entry form, i.e., as global
notes registered in the name of DTC or its nominee. The sale of
the notes will settle in immediately available funds through
DTC. Notes may not be withdrawn from DTC except in the limited
situations described in the accompanying prospectus under
Description of debt securitiesForm of debt
securities.
Investors may hold interests in a global note through
organizations that participate, directly or indirectly, in the
DTC system, including Clearstream Banking S.A. and Euroclear
Bank S.A./N.V., as operator of the Euroclear System. See
Description of debt securitiesForm of debt
securities in the accompanying prospectus for additional
information about indirect ownership of interests in the notes.
S-21
Material United
States federal income tax considerations
The following general discussion summarizes the material
U.S. federal income tax considerations of the ownership and
disposition of the notes by holders who purchase notes for cash
at their original issuance at their issue price
(i.e., the first price at which a substantial amount of the
notes is sold to the public, excluding sales to bond houses,
brokers, or similar persons or organizations acting in the
capacity of underwriters or wholesalers) and who hold the notes
as capital assets (generally, property held for investment).
This discussion is based upon the Internal Revenue Code of 1986,
or the Code, regulations of the Treasury Department, Internal
Revenue Service, or IRS, rulings and pronouncements, and
judicial decisions now in effect, all of which are subject to
change (possibly on a retroactive basis). We will not seek any
rulings from the IRS or opinions of counsel regarding the
matters discussed below. There can be no assurance that the IRS
will not take positions concerning the tax consequences of the
purchase, ownership or disposition of the notes which are
different from those discussed below.
This discussion is a summary for general information only and
does not consider all aspects of U.S. federal income
taxation that may be relevant to the purchase, ownership and
disposition of the notes. In addition, this discussion does not
describe any tax consequences arising out of the tax laws of any
state, local or foreign jurisdiction, any estate or gift tax
consequences, or the U.S. federal income tax consequences
to investors subject to special treatment under the
U.S. federal income tax laws, such as:
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dealers in securities or foreign currency;
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tax-exempt entities;
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banks and other financial institutions;
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regulated investment companies;
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real estate investment trusts;
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traders in securities that have elected the
mark-to-market
method of accounting for their securities;
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insurance companies;
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persons that hold notes as part of a straddle, a
hedge or a conversion transaction or
other risk reduction transaction;
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persons liable for alternative minimum tax;
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certain U.S. expatriates;
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passive foreign investment companies;
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controlled foreign corporations;
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U.S. holders (defined below) that have a functional
currency other than the U.S. dollar; or
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pass-through entities (e.g., partnerships) or investors who hold
the notes through pass-through entities.
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If a partnership, including an entity that is treated as a
partnership for U.S. federal income tax purposes, is a
beneficial owner of notes, the treatment of a partner in the
partnership will
S-22
generally depend on the status of the partner and the activities
of the partnership. If you are a partner in a partnership that
is considering purchasing notes, you should consult with your
tax advisor.
IF YOU ARE CONSIDERING BUYING NOTES, WE URGE YOU TO CONSULT
YOUR TAX ADVISOR ABOUT THE PARTICULAR U.S. FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF THE NOTES, AND THE APPLICATION OF THE
U.S. FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR
SITUATION.
U.S.
holders
A U.S. holder is a beneficial owner of a note
that, for U.S. federal income tax purposes, is:
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an individual who is a citizen or resident of the United States;
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a corporation, or other entity taxable as a corporation, that
was created or organized in or under the laws of the United
States, any state thereof or the District of Columbia;
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an estate if its income is subject to U.S. federal income
taxation, regardless of its source; or
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a trust if a U.S. court is able to exercise primary
supervision over administration of the trust and one or more
United States persons have authority to control all substantial
decisions of the trust, or if a trust has validly elected to
continue to be treated as a domestic trust.
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Taxation of
interest
Interest on the notes is generally taxable to you as ordinary
income at the time it is received or accrued in accordance with
your regular method of accounting for U.S. federal income
tax purposes.
Certain debt instruments that provide for one or more contingent
payments are subject to Treasury regulations governing
contingent payment debt instruments. A payment is not treated as
a contingent payment under these regulations if, as of the issue
date of the debt instrument, the likelihood that such payment
will be made is remote. In certain circumstances (see the
discussion under Description of the notesOptional
redemption), we may pay amounts on the notes that are in
excess of the stated interest or principal of the notes. We
intend to take the position that the possibility that any such
payment will be made is remote so that such possibility will not
cause the notes to be treated as contingent payment debt
instruments. Our determination that these contingencies are
remote is binding on you unless you disclose your contrary
position to the IRS in the manner that is required by applicable
Treasury regulations. Our determination is not, however, binding
on the IRS. It is possible that the IRS might take a different
position from that described above, in which case the timing,
character and amount of taxable income in respect of the notes
may be different from that described herein.
Sale or other
disposition of notes
You generally must recognize taxable gain or loss on the sale,
exchange, redemption, retirement or other taxable disposition of
a note. The amount of your gain or loss equals the difference
between the sum of the amount of cash plus the fair market value
of all other property you receive for the note (to the extent
such amount does not represent accrued but unpaid interest,
which will be included as ordinary interest income to the extent
you have not previously
S-23
included such amounts in income), minus your adjusted tax basis
in the note. Your adjusted tax basis in a note generally is the
price you paid for the note. Any such gain or loss on a taxable
disposition of a note will generally constitute capital gain or
loss and will be long-term capital gain or loss if you have held
the notes for more than one year at the time of the sale or
other taxable disposition. Long-term capital gains of
individuals, estates and trusts currently are subject to a
reduced rate of U.S. federal income tax. The deductibility
of capital losses is subject to limitations.
Information
reporting and backup withholding
Information reporting and backup withholding generally will
apply to payments of interest and principal on, or the proceeds
of the sale or other disposition of, notes held by you unless
you are an exempt recipient or, in the case of backup
withholding, you provide us or the appropriate intermediary with
a taxpayer identification number, certified under penalties of
perjury, as well as certain other information. Backup
withholding is not an additional tax. Any amount withheld under
the backup withholding rules is allowable as a credit against
your U.S. federal income tax liability, if any, and a
refund may be obtained if the amounts withheld exceed your
actual U.S. federal income tax liability and you provide
the required information or appropriate claim form to the IRS.
New legislation
relating to net investment income
For taxable years beginning after December 31, 2012,
newly-enacted legislation is scheduled to impose a 3.8% tax on
the net investment income of certain United States
individuals and on the undistributed net investment
income of certain estates and trusts. Among other items,
net investment income generally includes interest
and certain net gain from the disposition of property, less
certain deductions.
Prospective holders should consult their tax advisors with
respect to the tax consequences of the new legislation described
above.
Non-U.S.
holders
You are a
non-U.S. holder
for purposes of this discussion if you are a beneficial owner of
notes and are for U.S. federal income tax purposes an
individual, corporation, estate or trust that is not a
U.S. holder.
Taxation of
interest
Subject to the discussion of backup withholding below, you will
generally not be subject to U.S. federal income or
withholding tax on payments of interest on a note, provided that
you properly certify as to your
non-U.S. status,
as described below, and:
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you do not actually or constructively own 10% or more of the
total voting power of all our voting stock;
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you are not a controlled foreign corporation related (directly
or indirectly) to us through stock ownership;
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S-24
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you are not a bank whose receipt of interest on the notes is in
connection with an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of your trade or
business; and
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such interest payments are not effectively connected with the
conduct by you of a trade or business within the United States.
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You can generally meet the certification requirement by
providing us or our paying agent with a properly completed
Form W-8BEN
(or substitute
Form W-8BEN
or the appropriate successor form) signed under penalties of
perjury, which provides your name and address and certifies that
you are a
non-U.S. holder.
If you hold the notes through a securities clearing
organization, bank or other financial institution that holds the
notes in the ordinary course of its trade or business (a
financial institution) on your behalf, such
financial institution must certify under penalties of perjury
that such a
Form W-8BEN
(or substitute
Form W-8BEN
or the appropriate successor form) has been received by it, or
by another such financial institution, from you, and a copy of
the
Form W-8BEN
(or substitute
Form W-8BEN
or the appropriate successor form) must be attached to such
certification. Special rules may apply to holders who hold notes
through qualified intermediaries within the meaning
of U.S. federal income tax laws.
Subject to the discussion under Income or gain
effectively connected with a U.S. trade or business,
a
non-U.S. holder
that does not qualify for exemption from withholding under the
preceding paragraphs generally will be subject to withholding of
U.S. federal income tax at the rate of 30% (or lower
applicable treaty rate) on payments of interest on the notes.
Sale or other
disposition of notes
Subject to the discussion of backup withholding below, any gain
realized by you on the sale, exchange, redemption, retirement or
other disposition of a note generally will not be subject to
U.S. federal income or withholding tax, unless:
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such gain is effectively connected with your conduct of a trade
or business in the United States (and, if an applicable income
tax treaty so requires, such gain is attributable to a permanent
establishment or a fixed base maintained by you in the United
States); or
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you are an individual who is present in the United States for
183 days or more in the taxable year of the disposition and
certain other conditions are satisfied.
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If the first bullet point applies, you generally will be subject
to U.S. federal income tax with respect to such gain, as
described below under Income or gain effectively
connected with a U.S. trade or business, unless an
applicable income tax treaty provides otherwise. If the second
bullet point applies, you generally will be subject to
U.S. federal income tax at a rate of 30% (or at a reduced
rate under an applicable income tax treaty) on such gain, which
may be offset by capital losses allocable to U.S. sources.
Income or gain
effectively connected with a U.S. trade or business
If interest on a note or gain from the sale, exchange,
redemption, retirement of other taxable disposition of a note is
effectively connected with your conduct of a trade or business
in the United States (and, if required under an applicable
income tax treaty, is attributable to a permanent establishment
or a fixed base maintained by you in the United States), then
such income or gain generally will be subject to
U.S. federal income tax on a net basis at the rates
S-25
applicable to U.S. persons generally (and, if you are a
corporate holder, such income or gain may also be subject to a
30% branch profits tax or such lower rate as may be available
under an applicable income tax treaty). If interest is subject
to U.S. federal income tax on a net basis in accordance
with the rules described in the preceding sentence, payments of
such interest will not be subject to U.S. withholding tax
so long as you provide us or our paying agent with a properly
completed
Form W-8ECI,
signed under penalties of perjury.
Information
reporting and backup withholding
Payments to you of interest on a note, and amounts withheld from
such payments, if any, generally will be required to be reported
to the IRS and to you. U.S. backup withholding generally
will not apply to payments of interest and principal on a note
if you duly provide a certification as to your foreign status,
or you otherwise establish an exemption, provided that we do not
have actual knowledge or reason to know that you are a United
States person.
Payment of the proceeds of a disposition of a note effected by
the U.S. office of a U.S. or foreign broker will be
subject to information reporting requirements and backup
withholding unless you properly certify under penalties of
perjury as to your foreign status and certain other conditions
are met or you otherwise establish an exemption. Information
reporting requirements and backup withholding generally will not
apply to any payment of the proceeds of the disposition of a
note effected outside the United States by a foreign office of a
broker. However, information reporting will apply to a payment
of the proceeds of the disposition of a note effected outside
the United States by a broker that has certain
U.S. connections unless such broker has documentary
evidence in its records that you are a
non-U.S. holder
and certain other conditions are met, or you otherwise establish
an exemption.
U.S. backup withholding tax is not an additional tax. Any
amount withheld under the backup withholding rules may be
credited against your U.S. federal income tax liability, if
any, and any excess may be refundable if the proper information
is provided to the IRS.
THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME
TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT
TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX
ADVISOR REGARDING THE PARTICULAR FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING, AND DISPOSING
OF OUR NOTES, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE
IN APPLICABLE LAWS.
S-26
Underwriting
Under the terms and subject to the conditions contained in an
underwriting agreement dated August 9, 2010, the
underwriters named below, for whom J.P. Morgan Securities
Inc., Barclays Capital Inc., Citigroup Global Markets Inc.,
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities
Inc., Goldman, Sachs & Co., Morgan Stanley &
Co. Incorporated and UBS Securities LLC are acting as
representatives, have severally agreed to purchase, and we have
agreed to sell to them, severally, the respective aggregate
principal amount of notes listed opposite their names below.
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Principal amount
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Underwriter
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of notes
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J.P. Morgan Securities Inc.
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$
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250,016,000
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Barclays Capital Inc.
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145,832,000
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Citigroup Global Markets Inc.
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145,832,000
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Credit Suisse Securities (USA) LLC
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145,832,000
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Deutsche Bank Securities Inc.
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145,832,000
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Goldman, Sachs & Co.
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145,832,000
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Morgan Stanley & Co. Incorporated
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145,832,000
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UBS Securities LLC
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145,832,000
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Banc of America Securities LLC
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145,832,000
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DnB NOR Markets, Inc.
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145,832,000
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RBS Securities Inc.
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145,832,000
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SG Americas Securities, LLC
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145,832,000
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Wells Fargo Securities, LLC
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145,832,000
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Total
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$
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2,000,000,000
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Under the terms and conditions of the underwriting agreement, if
the underwriters purchase any of the notes, then the
underwriters are committed to purchase all of the notes. The
underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of the non-defaulting
underwriters may be increased or the offering may be terminated.
Notes sold by the underwriters to the public will initially be
offered at the initial public offering price set forth on the
cover of this prospectus supplement. Any notes sold by the
underwriters to securities dealers may be sold at a discount
from the initial public offering price of up to 0.375% of the
principal amount of the notes. Any such securities dealers may
resell any notes to certain other brokers or dealers at a
discount from the initial public offering price of up to 0.25%
of the principal amount of the notes. If all the notes are not
sold at the initial offering price, the representatives may
change the offering price and the other selling terms. The
offering of the notes by the underwriters is subject to receipt
and acceptance and subject to the underwriters right to
reject any order in whole or in part.
The aggregate proceeds to us are set forth on the cover page
hereof before deducting our expenses in offering the notes. We
estimate that the total expenses of this offering, including
registration and filing fees, printing fees, rating agency,
trustee and legal and accounting fees, but excluding
underwriting discounts and commissions, will be approximately
$2.6 million.
S-27
A prospectus in electronic format may be made available on the
web sites maintained by one or more underwriters, or selling
group members, if any, participating in the offering. The
underwriters may agree to allocate a portion of the notes to
underwriters and selling group members for their online
brokerage account holders. Internet distributions will be
allocated by the representatives to underwriters and selling
group members that may make Internet distributions on the same
basis as other allocations.
We have agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribute to payments the
underwriters may be required to make in respect thereof.
The notes are offered for sale only in those jurisdictions in
the United States where it is legal to make such offers. The
notes are a new issue of securities with no established trading
market. We do not intend to apply for the notes to be listed on
any national securities exchange or to arrange for the notes to
be quoted on any quotation system. We have been advised by the
underwriters that they intend to make a market in the notes, but
they are not obligated to do so and may discontinue
market-making at any time without notice. No assurance can be
given as to the liquidity of, or the trading market for, the
notes.
In connection with the offering of the notes, the underwriters
may engage in overallotment, stabilizing transactions and
syndicate covering transactions. Overallotment involves sales in
excess of the offering size, which creates a short position for
the underwriters. Stabilizing transactions involve bids to
purchase the notes in the open market for the purpose of
pegging, fixing or maintaining the price of the notes. Syndicate
covering transactions involve purchases of the notes in the open
market after the distribution has been completed in order to
cover short positions. Stabilizing transactions and syndicate
covering transactions may have the effect of preventing or
retarding a decline in the market price of the notes or cause
the price of the notes to be higher than it would otherwise be
in the absence of those transactions. If the underwriters engage
in stabilizing or syndicate covering transactions, they may
discontinue them at any time.
Selling
restrictions
The notes may be offered and sold in the United States and
certain jurisdictions outside of the United States in which such
offer and sale is permitted.
European economic
area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each a
Relevant Member State, from and including the date
on which the European Union Prospectus Directive, or the
EU Prospectus Directive, is implemented in that
Relevant Member State, or the Relevant Implementation
Date, an offer of notes described in this prospectus
supplement may not be made to the public in that Relevant Member
State prior to the publication of a prospectus in relation to
the notes which has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with
the EU Prospectus Directive, except that it may,
S-28
with effect from and including the Relevant Implementation Date,
make an offer of notes to the public in that Relevant Member
State at any time:
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to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
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to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
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to fewer than 100 natural or legal persons (other than qualified
investors as defined in the EU Prospectus Directive) subject to
obtaining the prior consent of the book-running managers for any
such offer; or
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in any other circumstances which do not require the publication
by the issuer of a prospectus pursuant to Article 3 of the
Prospectus Directive.
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For the purposes of this provision, the expression an
offer of notes to the public in relation to any note
in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the
offer and the notes to be offered so as to enable an investor to
decide to purchase or subscribe for the notes, as the same may
be varied in that Relevant Member State by any measure
implementing the EU Prospectus Directive in that Relevant Member
State, and the expression EU Prospectus Directive means
Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.
Neither we nor any of the underwriters have authorized, and do
not authorize, the making of any offer of notes through any
financial intermediary on their behalf, other than offers made
by the underwriters with a view to the final placement of the
notes as contemplated in this prospectus supplement.
Accordingly, no purchaser of the notes, other than the
underwriters, is authorized to make any further offer of the
notes on behalf of the sellers or the underwriters.
United
Kingdom
This prospectus supplement and the accompanying prospectus are
only being distributed to and are only directed at
(1) persons who are outside the United Kingdom or
(2) to investment professionals falling within
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, or the Order,
or (iii) high net worth entities, and other persons to whom
it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order, all such persons
together being referred to as relevant persons. The
notes are only available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire such notes
will be engaged in only with, relevant persons. Any person who
is not a relevant person should not act or rely on this
prospectus supplement and the accompanying prospectus or any of
their contents.
Hong
Kong
The notes may not be offered or sold to persons in Hong Kong by
means of any document other than to persons whose ordinary
business is to buy or sell shares or debentures, whether as
principal or agent, or in circumstances which do not constitute
an offer to the public within the meaning of the Companies
Ordinance (Cap. 32) of Hong Kong or which do not result in
the document being a prospectus within the meaning
of the Companies Ordinance (Cap. 32) of
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Hong Kong, and no advertisement, invitation or document relating
to the notes may be issued or may be in the possession of any
person for the purpose of issue (in each case whether in Hong
Kong or elsewhere) which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong
Kong except if permitted to do so under the securities laws of
Hong Kong, other than with respect to notes which are or are
intended to be disposed of only to persons outside Hong Kong or
only to professional investors within the meaning of
the Securities and Futures Ordinance (Cap. 571) of Hong
Kong and any rules made thereunder.
Japan
The notes have not been and will not be registered under the
Financial Instruments and Exchange Law of Japan (Law No. 25
of 1948, as amended), or the Financial Instruments and
Exchange Law, and each underwriter has agreed that it has
not offered or sold and will not offer or sell any notes,
directly or indirectly, in Japan or to, or for the account or
benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or
other entity incorporated or organized under the laws of Japan),
or to, or for the account or benefit of, others for re-offering
or resale, directly or indirectly, in Japan or to, or for the
account or benefit of, any resident of Japan, except pursuant to
an exemption from the registration requirements of, and
otherwise in compliance with, the Financial Instruments and
Exchange Law and any other applicable laws, regulations and
ministerial guidelines of Japan.
Singapore
This prospectus supplement has not been registered as a
prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement, the accompanying
prospectus and any other document or material in connection with
the offer or sale, or invitation for subscription or purchase,
of the notes may not be circulated or distributed, nor may the
notes be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (1) to an
institutional investor under Section 274 of the Securities
and Futures Act, Chapter 289 of Singapore (the
SFA), (2) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the
conditions, specified in Section 275 of the SFA or
(3) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Where the notes are subscribed or purchased under
Section 275 by a relevant person which is: (1) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor or (2) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries rights and interest in
that trust shall not be transferable for six months after that
corporation or that trust has acquired the notes under
Section 275 except: (a) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(b) where no consideration is given for the transfer; or
(c) by operation of law.
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Other
relationships
The underwriters and their respective affiliates are full
service financial institutions engaged in various activities,
which may include securities trading, commercial and investment
banking, financial advisory, investment management, investment
research, principal investment, hedging, financing and brokerage
activities.
Certain of the underwriters and their respective affiliates
have, from time to time, performed, and may in the future
perform, various financial advisory and investment banking
services for us, for which they have received or will receive
customary fees and expenses. J.P. Morgan Securities Inc.
acted as arranger, and JPMorgan Chase Bank, N.A., one of its
affiliates, is expected to act as administrative agent and a
lender, for our new senior secured revolving credit facility. In
addition, JPMorgan Chase Bank, N.A. acts as administrative agent
and a lender under our existing revolving credit facility and as
one of the third-party investors that made a cash contribution
to Trinity in connection with the establishment of the Midstream
Subsidiary Note, which is expected to be repaid with a portion
of the proceeds of the notes. In addition, affiliates of each of
J.P. Morgan Securities Inc., Barclays Capital Inc.,
Citigroup Global Markets Inc., Credit Suisse Securities (USA)
LLC, Deutsche Bank Securities Inc., Goldman, Sachs &
Co., Morgan Stanley & Co. Incorporated, UBS Securities
LLC, Banc of America Securities LLC, DnB NOR Markets, Inc., RBS
Securities Inc., SG Americas Securities, LLC and Wells Fargo
Securities, LLC are lenders under our existing revolving credit
facility
and/or
third-party investors that made cash contributions to Trinity in
connection with the establishment of the Midstream Subsidiary
Note. An affiliate of Banc of America Securities LLC is also an
equity investor in Trinity Associates LLC, the lender under the
Midstream Subsidiary Note. In addition, affiliates of each of
the underwriters are expected to act as lenders under our new
senior secured revolving credit facility.
Some of the affiliates of the underwriters are also lenders
under WESs revolving credit facility and perform various
financial advisory and investment banking services for WES and
other of our subsidiaries and affiliates.
In addition, certain of the underwriters and their affiliates,
from time to time in the ordinary course of their business,
provide letters of credit and leases of equipment or other
assets to us and our subsidiaries, hold long or short positions
in our debt or equity securities and act as our and our
subsidiaries counterparties to various swaps, hedges and
other derivative transactions. We expect that any swap
agreements, commodity hedging agreements and cash management
arrangements provided by affiliates of the underwriters will be
secured by the collateral under the new senior secured revolving
credit facility.
In the ordinary course of their various business activities, the
underwriters and their respective affiliates may make or hold a
broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for
the accounts of their customers, and such investment and
securities activities may involve securities
and/or
instruments of the issuer. The underwriters and their respective
affiliates may also make investment recommendations
and/or
publish or express independent research views in respect of such
securities or instruments and may at any time hold, or recommend
to clients that they acquire, long
and/or short
positions in such securities and instruments.
See Conflicts of interest.
S-31
Conflicts of
interest
We intend to use at least 5% of the net proceeds of this
offering to repay indebtedness under the Midstream Subsidiary
Note. See Use of proceeds. Certain affiliates of the
underwriters have made cash contributions to Trinity, the lender
under the Midstream Subsidiary Note, in exchange for a
Class B member cumulative preferred interest in Trinity in
connection with the establishment of the Midstream Subsidiary
Note. Because at least 5% of the total net offering proceeds,
not including underwriting compensation, of this offering will
be paid to affiliates of J.P. Morgan Securities Inc.,
Citigroup Global Markets Inc., Credit Suisse Securities (USA)
LLC, Morgan Stanley & Co. Incorporated, UBS Securities
LLC and RBS Securities Inc. as a result of our repayment of the
Midstream Subsidiary Note, each of them has a conflict of
interest within the meaning of NASD Conduct Rule 2720 of
FINRA, or Rule 2720. Accordingly, this offering is being
made in compliance with the requirements of Rule 2720.
Pursuant to Rule 2720, the appointment of a qualified
independent underwriter is not necessary in connection with this
offering, as the offered notes will be rated investment grade by
a nationally recognized statistical rating organization.
J.P. Morgan Securities Inc., Citigroup Global Markets Inc.,
Credit Suisse Securities (USA) LLC, Morgan Stanley &
Co. Incorporated, UBS Securities LLC and RBS Securities Inc.
will not confirm sales of the debt securities to any account
over which they exercise discretionary authority without the
prior written approval of the customer.
See UnderwritingOther relationships for
additional information about our relationships with the
underwriters.
S-32
Legal
matters
Vinson & Elkins L.L.P. will pass upon the validity of
the notes offered hereby. The validity of the notes will be
passed upon for the underwriters by Simpson Thacher &
Bartlett LLP, New York, New York.
Experts
The consolidated financial statements of Anadarko as of
December 31, 2009 and 2008, and for each of the years in
the three-year period ended December 31, 2009, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2009,
have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, an independent registered public accounting
firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
Certain information with respect to the oil and gas reserves
associated with Anadarkos oil and gas prospects is
confirmed in the procedures and methods review letter of Miller
and Lents, Ltd., an independent petroleum consulting firm, and
incorporated by reference into this document, upon the authority
of said firm as experts with respect to the matters covered by
such procedures and methods review letter and in giving such
procedures and methods review letter.
Where you can
find more information
We file annual, quarterly and current reports, proxy statements
and other information with the SEC (File
No. 001-8968).
Our SEC filings are available to the public over the Internet at
the SECs website at
http://www.sec.gov
and at our web site at
http://www.anadarko.com.
You may also read and copy at prescribed rates any document we
file at the SECs public reference room at
100 F Street, N.E., Washington, D.C. 20549. You
may obtain information on the operation of the SECs public
reference room by calling the SEC at
1-800-SEC-0330.
This prospectus supplement and the accompanying prospectus form
part of a registration statement we have filed with the SEC
relating to, among other things, the notes. As permitted by SEC
rules, this prospectus supplement and the accompanying
prospectus do not contain all the information we have included
in the registration statement and the accompanying exhibits and
schedules we have filed with the SEC. You may refer to the
registration statement, exhibits and schedules for more
information about us and the notes. The statements this
prospectus supplement and the accompanying prospectus make
pertaining to the content of any contract, agreement or other
document that is an exhibit to the registration statement
necessarily are summaries of their material provisions, and we
qualify them in their entirety by reference to those exhibits
for complete statements of their provisions. The registration
statement, exhibits and schedules are available at the
SECs public reference room or through its Internet site.
Our common stock is listed on the New York Stock Exchange under
the symbol APC. Our reports, proxy statements and
other information may be read and copied at the New York Stock
Exchange at 11 Wall Street, 5th Floor, New York, New York 10005.
The SEC allows us to incorporate by reference the
information that we file with them, which means that we can
disclose important information to you by referring you to other
documents. The information incorporated by reference is an
important part of this prospectus supplement,
S-33
and information that we file later with the SEC will
automatically update and supersede this information. We
incorporate by reference the following documents and all
documents that we subsequently file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (other than, in each case,
information furnished rather than filed):
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our Annual Report on
Form 10-K
for the year ended December 31, 2009;
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our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010; and
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our Current Reports on
Form 8-K
filed February 18, 2010, March 11, 2010,
March 16, 2010, May 19, 2010 and August 6, 2010.
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You may request a copy of these filings (other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing), at no cost, by writing to us at the
following address or calling the following number:
Anadarko Petroleum Corporation
Attention: Corporate Secretary
1201 Lake Robbins Dr.
The Woodlands, Texas 77380
(832) 636-1000
S-34
Glossary of oil
and natural gas terms
The following are abbreviations and definitions of certain terms
commonly used in the oil and gas industry and this document:
BOE: One stock tank barrel of oil equivalent, using
the ratio of six Mcf of natural gas to one barrel of crude oil,
condensate or natural gas liquids.
Condensate: Hydrocarbons which are in a gaseous
state under reservoir conditions but which become liquid at the
surface and may be recovered by conventional separators.
Mcf: One thousand cubic feet of natural gas. For the
purposes of this prospectus supplement and in the accompanying
prospectus, this volume is stated at the legal pressure base of
the state or area in which the reserves are located and at 60
degrees Fahrenheit.
Natural gas liquids: Hydrocarbons found in natural
gas which may be extracted as liquefied petroleum gas and
natural gasoline.
Oil: Crude oil, condensate and natural gas liquids.
Proved oil and gas reserves: Those quantities of oil
and gas, which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be economically
produciblefrom a given date forward, from known
reservoirs, and under existing economic conditions, operating
methods, and government regulations.
G-1
Prospectus
Anadarko Petroleum
Corporation
Debt
Securities
Common Stock
Preferred
Stock
Depositary
Shares
We, Anadarko Petroleum Corporation, may offer from time to time
our debt securities, common stock, preferred stock and
depositary shares. We refer to our debt securities, common
stock, preferred stock and depositary shares collectively as the
securities. The securities we may offer may be
convertible into or exercisable or exchangeable for other
securities. This prospectus describes the general terms of these
securities and the general manner in which we will offer these
securities. The specific terms of any securities we offer will
be included in a supplement to this prospectus. The prospectus
supplement will also describe the specific manner in which we
will offer the securities. Any prospectus supplement may also
add, update or change information contained in this prospectus.
You should read this prospectus and the accompanying prospectus
supplement carefully before you make your investment decision.
Our common stock is listed on the New York Stock Exchange under
the trading symbol APC.
See Risk Factors on page 5 for information
about factors you should consider before buying our
securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus or the accompanying
prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
This prospectus is dated
August 14, 2009.
Table of
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i
About this
prospectus
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, which we
refer to as the SEC, using a shelf
registration process. Under this shelf registration process, we
may, over time, offer and sell any combination of the securities
described in this prospectus in one or more offerings. This
prospectus provides you with a general description of the
securities that we may offer. Each time we offer securities, we
will provide one or more prospectus supplements that will
contain specific information about the terms of that offering. A
prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the
additional information described under the heading Where
You Can Find More Information below. You should rely only
on the information included or incorporated by reference in this
prospectus and the applicable prospectus supplement. We have not
authorized anyone else to provide you with different
information. We are not making an offer to sell in any
jurisdiction in which the offer is not permitted. You should not
assume that the information in the prospectus, any prospectus
supplement or any other document incorporated by reference in
this prospectus is accurate as of any date other than the dates
of those documents.
Unless the context requires otherwise or unless otherwise noted,
all references in this prospectus or any prospectus supplement
to Anadarko and to the company,
we, us or our are to
Anadarko Petroleum Corporation and its consolidated subsidiaries.
1
Where you can
find more information
Each time we offer to sell securities, we will provide a
prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this
prospectus. This prospectus, together with the applicable
prospectus supplement, will include or refer you to all material
information relating to each offering.
We file annual, quarterly and current reports, proxy statements
and other information with the SEC (File
No. 001-8968).
Our SEC filings are available to the public over the Internet at
the SECs website at
http://www.sec.gov
and at our website at
http://www.anadarko.com.
You may also read and copy at prescribed rates any document we
file with the SEC at the SECs public reference room at
100 F Street, N.E., Washington, D.C. 20549. You
may obtain information on the operation of the SECs public
reference room by calling the SEC at
1-800-SEC-0330.
The SEC maintains an internet site (www.sec.gov) that
contains reports, proxy and information statements and other
information regarding issuers, like Anadarko, that file
electronically with the SEC.
Our common stock is listed on the New York Stock Exchange under
the symbol APC. Our reports, proxy statements and
other information may be read and copied at the New York Stock
Exchange at 11 Wall Street, 5th Floor, New York, New York
10005.
The SEC allows us to incorporate by reference the
information that we file with them, which means that we can
disclose important information to you by referring you to other
documents. The information incorporated by reference is an
important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this
information. We incorporate by reference the following documents
and all documents that we subsequently file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (other than, in each case,
information furnished rather than filed), prior to the
termination of the offerings under this prospectus:
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our annual report on
Form 10-K
for the year ended December 31, 2008;
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our quarterly reports on
Form 10-Q
for the three months ended March 31, 2009 and June 30,
2009;
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our current reports on
Form 8-K,
filed with the SEC on February 26, 2009, March 6,
2009, May 12, 2009, May 15, 2009, May 22, 2009
and June 12, 2009; and
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the description of our common stock set forth in the
registration statement on
Form 8-A
filed with the SEC on September 3, 1986.
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You may request a copy of these filings (other than an exhibit
to a filing unless that exhibit is specifically incorporated by
reference into that filing), at no cost, by writing to us at the
following address or calling the following number:
Anadarko Petroleum Corporation
Attention: Corporate Secretary
1201 Lake Robbins Drive
The Woodlands, Texas 77380
(832) 636-1000
2
Forward-looking
statements
We have made in this prospectus and in the reports and documents
incorporated herein by reference, and may from time to time
otherwise make in other public filings, press releases and
discussions with our management, forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, concerning the operations,
economic performance and financial condition of Anadarko. These
forward-looking statements include information concerning future
production and reserves of Anadarko, schedules, plans, timing of
development, contributions from oil and gas properties, and
those statements preceded by, followed by or that otherwise
include the words believes, expects,
anticipates, intends,
estimates, projects, target,
goal, plans, objective,
should or similar expressions or variations on these
expressions.
For these statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Although we believe
that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such
expectations will prove to be correct. Important factors that
could cause actual results to differ materially from our
expectations include, but are not limited to, our assumptions
about energy markets, production levels, reserve levels,
operating results, competitive conditions, technology, the
availability of capital resources, capital expenditures and
other contractual obligations, the supply and demand for and the
price of oil, natural gas, natural gas liquids (NGLs) and other
products or services, volatility in the commodity futures
markets, currency exchange rates, the weather, inflation, the
availability of goods and services, drilling risks, future
processing volumes and pipeline throughput, general economic
conditions, either internationally or nationally or in the
jurisdictions in which we or our subsidiaries are doing
business, legislative or regulatory changes, including changes
in environmental regulation, environmental risks and liability
under federal, state and foreign environmental laws and
regulations, potential environmental or other obligations
arising from Kerr-McGee Corporations former chemical
business, the securities, capital or credit markets, our ability
to repay debt, the outcome of our proceedings related to the
Algerian exceptional profits tax and other factors discussed in
Risk Factors and Managements Discussion
and Analysis of Financial Condition and Results of
OperationsCritical Accounting Estimates included in
our annual report on
Form 10-K
for the year ended December 31, 2008, in Risk
Factors included in our quarterly report on
Form 10-Q
for the three months ended June 30, 2009 and in our other
public filings, press releases and discussions with Company
management. We undertake no obligation to publicly update or
revise any forward-looking statements.
3
About
us
Anadarko is among the largest independent oil and gas
exploration and production companies in the world, with
2.28 billion barrels of oil equivalent (BOE) of proved
reserves as of December 31, 2008. Anadarkos primary
business segments are vertically integrated within the oil and
gas industry. These segments are managed separately because of
the nature of their products and services, as well as unique
technology, distribution and marketing requirements. The
Companys three operating segments are:
Oil and gas exploration and productionThis segment
explores for and produces natural gas, crude oil, condensate and
NGLs. The Companys major areas of operation are located
onshore in the United States, the deepwater of the Gulf of
Mexico and Algeria. Anadarko also has production in China and is
executing strategic exploration programs in several other
countries, including Ghana and Brazil.
MidstreamThis segment engages in gathering,
processing, treating and transporting Anadarko and third-party
oil and gas production. The Company owns and operates natural
gas gathering, treating and processing systems in the United
States.
MarketingThis segment sells most of Anadarkos
production, as well as commodities purchased from third parties.
The Company actively markets natural gas, oil and NGLs in the
United States, and actively markets oil from Algeria and China.
The Company also has hard minerals properties that contribute to
operating income through non-operated joint ventures and royalty
arrangements in several coal, trona (natural soda ash) and
industrial mineral mines located on lands within and adjacent to
its Land Grant holdings. The Land Grant is an 8 million
acre strip running through portions of Colorado, Wyoming and
Utah and is where the Company owns most of its fee mineral
rights. Anadarko is committed to minimizing its impact on the
environment from exploration and production activities of its
worldwide operations through programs such as carbon dioxide
(CO2)
sequestration and the reduction of surface area used for
production facilities.
Our principal executive offices are located at 1201 Lake Robbins
Drive, The Woodlands, Texas 77380, and our telephone number is
(832) 636-1000.
We maintain a website on the Internet at
http://www.anadarko.com.
Information that you may find on our website is not part of
this prospectus.
4
Risk
factors
You should carefully consider the factors contained in our
annual report on
Form 10-K
for the fiscal year ended December 31, 2008 under the
headings Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of
OperationsCritical Accounting Estimates and in our
quarterly report on
Form 10-Q
for the three months ended June 30, 2009 under the heading
Risk Factors before investing in our securities. You
should also consider similar information contained in any annual
report on
Form 10-K
or other document filed by us with the SEC after the date of
this prospectus before deciding to invest in our securities. If
applicable, we will include in any prospectus supplement a
description of those significant factors that could make the
offering described therein speculative or risky.
5
Use of
proceeds
Unless specified otherwise in the applicable prospectus
supplement, we expect to use the net proceeds we receive from
the sale of the securities offered by this prospectus and any
accompanying prospectus supplement for general corporate
purposes, which may include, among other things:
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the repayment of outstanding indebtedness;
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working capital;
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capital expenditures; and
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acquisitions.
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The precise amount and timing of the application of such
proceeds will depend upon our funding requirements and the
availability and cost of other capital. Pending any specific
application, we may initially invest proceeds in short-term
marketable securities.
6
Ratios of
earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends
The following table sets forth our ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred
stock dividends for the periods indicated.
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Six months
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ended
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Year ended December 31,
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June 30,
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2008
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2007
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2006
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2005
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2004
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2009(1)
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Ratio of earnings to fixed charges
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4.79x
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4.66x
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5.24x
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12.50x
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5.80x
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Ratio of earnings to combined fixed charges and preferred stock
dividends
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4.79x
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4.64x
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5.21x
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12.15x
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5.70x
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(1)
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As a result of the Companys
net loss in the first six months of 2009, the Companys
earnings for the six months ended June 30, 2009 did not
cover fixed charges by $1.1 billion, and did not cover
combined fixed charges and preferred stock dividends by
$1.1 billion.
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These ratios were computed by dividing earnings by either fixed
charges or combined fixed charges and preferred stock dividends.
For this purpose, earnings include income from continuing
operations before income taxes and fixed charges and excludes
undistributed earnings of equity investees. Fixed charges
include interest and amortization of debt expenses and the
estimated interest component of rentals. Preferred stock
dividends are adjusted to reflect the amount of pretax earnings
required to pay the dividends on outstanding preferred stock.
Additionally, the Company redeemed and subsequently retired its
remaining preferred stock for $45 million in the second
quarter of 2008.
7
Description of
debt securities
General
The debt securities will be issued under an indenture, dated as
of September 19, 2006, between Anadarko and The Bank of New
York Mellon Trust Company, N.A. (formerly, The Bank of
New York Trust Company, N.A.), and will not be secured
by any property or assets of Anadarko. Thus, by owning a debt
security, you are one of our unsecured creditors.
The debt securities will rank equally with all of our other
unsecured and unsubordinated debt.
The indenture does not limit our ability to incur additional
indebtedness.
The debt indenture and its associated documents, including your
debt security, contain the full legal text of the matters
described in this section and your prospectus supplement. We
have filed the indenture with the SEC as an exhibit to our
registration statement. See Where You Can Find More
Information above for information on how to obtain copies
of this document.
This section and your prospectus supplement summarize all the
material terms of the indenture and your debt security. They do
not, however, describe every aspect of the indenture and your
debt security. For example, in this section we use terms that
have been given special meaning in the indenture, but we
describe the meaning for only the more important of those terms.
Indenture
The debt securities are governed by a document called an
indenture. The indenture is a contract between us and The Bank
of New York Mellon Trust Company, N.A.
The trustee under the indenture has two main roles:
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First, the trustee can enforce your rights against us if we
default. There are some limitations on the extent to which the
trustee acts on your behalf, which we describe later under
Default, Remedies and Waiver of Default.
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Second, the trustee performs administrative duties for us, such
as sending you interest payments and notices.
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Series of debt
securities
We may issue as many distinct series of debt securities under
the indenture as we wish. This section summarizes terms of the
securities that apply generally to all series. The provisions of
the indenture allow us not only to issue debt securities with
terms different from those of debt securities previously issued
under the indenture, but also to reopen a previously
issued series of debt securities and issue additional debt
securities of that series. We will describe most of the
financial and other specific terms of your series in the
prospectus supplement for that series. Those terms may vary from
the terms described here.
As you read this section, please remember that the specific
terms of your debt security as described in your prospectus
supplement will supplement and, if applicable, may modify or
replace the general terms described in this section. If there
are any differences between your prospectus supplement and this
prospectus, your prospectus supplement will control. Thus, the
statements we make in this section may not apply to your debt
security.
8
When we refer to a series of debt securities, we mean a series
issued under the indenture. When we refer to your prospectus
supplement, we mean the prospectus supplement describing the
specific terms of the debt security you purchase. The terms used
in your prospectus supplement will have the meanings described
in this prospectus, unless otherwise specified.
Amounts of
issuances
The indenture does not limit the aggregate amount of debt
securities that we may issue or the number of series or the
aggregate amount of any particular series. We may issue debt
securities and other securities at any time without your consent
and without notifying you.
The indenture and the debt securities do not limit our ability
to incur other indebtedness or to issue other securities. Also,
unless otherwise specified below or in your prospectus
supplement, we are not subject to financial or similar
restrictions by the terms of the debt securities.
Principal amount,
stated maturity and maturity
The principal amount of a debt security means the principal
amount payable at its stated maturity, unless that amount is not
determinable, in which case the principal amount of a debt
security is its face amount.
The term stated maturity with respect to any debt
security means the day on which the principal amount of your
debt security is scheduled to become due. The principal may
become due sooner, by reason of redemption or acceleration after
a default or otherwise in accordance with the terms of the debt
security. The day on which the principal actually becomes due,
whether at the stated maturity or earlier, is called the
maturity of the principal.
We also use the terms stated maturity and
maturity to refer to the days when other payments
become due. For example, we may refer to a regular interest
payment date when an installment of interest is scheduled to
become due as the stated maturity of that
installment. When we refer to the stated maturity or
the maturity of a debt security without specifying a
particular payment, we mean the stated maturity or maturity, as
the case may be, of the principal.
Specific terms of
debt securities
Your prospectus supplement will describe the specific terms of
your debt security, which will include some or all of the
following:
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the title of the series of your debt security;
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any limit on the total principal amount of the debt securities
of the same series;
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the stated maturity;
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the currency or currencies for principal and interest, if not
U.S. dollars;
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the price at which we originally issue your debt security,
expressed as a percentage of the principal amount, and the
original issue date;
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whether your debt security is a fixed-rate debt security, a
floating-rate debt security or an indexed debt security;
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if your debt security is a fixed-rate debt security, the yearly
rate at which your debt security will bear interest, if any, and
the interest payment dates;
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if your debt security is a floating-rate debt security, the
interest rate basis; any applicable index currency or maturity,
spread or spread multiplier or initial, maximum or minimum rate;
the interest reset, determination, calculation and payment
dates; the day count used to calculate interest payments for any
period; and the calculation agent;
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if your debt security is an indexed debt security, the principal
amount, if any, we will pay you at maturity, interest payment
dates, the amount of interest, if any, we will pay you on an
interest payment date or the formula we will use to calculate
these amounts, if any, and the terms on which your debt security
will be exchangeable for or payable in cash, securities or other
property;
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if your debt security may be converted into or exercised or
exchanged for common or preferred stock or other securities of
Anadarko or debt or equity securities of one or more third
parties, the terms on which conversion, exercise or exchange may
occur, including whether conversion, exercise or exchange is
mandatory, at the option of the holder or at our option, the
period during which conversion, exercise or exchange may occur,
the initial conversion, exercise or exchange price or rate and
the circumstances or manner in which the amount of common or
preferred stock or other securities issuable upon conversion,
exercise or exchange may be adjusted;
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if your debt security is also an original issue discount debt
security, the yield to maturity;
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if applicable, the circumstances under which your debt security
may be redeemed at our option or repaid at the holders
option before the stated maturity, including any redemption
commencement date, repayment date(s), redemption price(s) and
redemption period(s);
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the authorized denominations, if other than $1,000 and multiples
of $1,000;
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the depositary for your debt security, if other than The
Depository Trust Company (DTC), and any
circumstances under which the holder may request securities in
non-global form, if we choose not to issue your debt security in
book-entry form only;
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if applicable, the circumstances under which we will pay
additional amounts on any debt securities held by a person who
is not a United States person for tax purposes and under which
we can redeem the debt securities if we have to pay additional
amounts;
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the names and duties of any co-trustees, depositaries, paying
agents, transfer agents or registrars for your debt
security; and
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any other terms of your debt security, which could be different
from those described in this prospectus.
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Governing
law
The debt indenture and the debt securities will be governed by
New York law.
Form of debt
securities
We will issue each debt security only in registered form,
without coupons, unless we specify otherwise in the applicable
prospectus supplement. In addition, we will issue each debt
security
10
in globali.e., book-entryform only, unless we
specify otherwise in the applicable prospectus supplement. Debt
securities in book-entry form will be represented by a global
security registered in the name of a depositary, which will be
the holder of all the debt securities represented by the global
security. Those who own beneficial interests in a global debt
security will do so through participants in the
depositarys securities clearance system, and the rights of
these indirect owners will be governed solely by the applicable
procedures of the depositary and its participants. References to
holders in this section mean those who own debt
securities registered in their own names, on the books that we
or the trustee maintain for this purpose, and not those who own
beneficial interests in debt securities registered in street
name or in debt securities issued in book-entry form through one
or more depositaries.
Unless otherwise indicated in the prospectus supplement, the
following is a summary of the depositary arrangements applicable
to debt securities issued in global form and for which DTC acts
as depositary.
Each global debt security will be deposited with, or on behalf
of, DTC, as depositary, or its nominee, and registered in the
name of a nominee of DTC. Except under the limited circumstances
described below, global debt securities are not exchangeable for
definitive certificated debt securities.
Ownership of beneficial interests in a global debt security is
limited to institutions that have accounts with DTC or its
nominee, or persons that may hold interests through those
participants. In addition, ownership of beneficial interests by
participants in a global debt security will be evidenced only
by, and the transfer of that ownership interest will be effected
only through, records maintained by DTC or its nominee for a
global debt security. Ownership of beneficial interests in a
global debt security by persons that hold those interests
through participants will be evidenced only by, and the transfer
of that ownership interest within that participant will be
effected only through, records maintained by that participant.
DTC has no knowledge of the actual beneficial owners of the debt
securities. Beneficial owners will not receive written
confirmation from DTC of their purchase, but beneficial owners
are expected to receive written confirmations providing details
of the transaction, as well as periodic statements of their
holdings, from the participants through which the beneficial
owners entered the transaction. The laws of some jurisdictions
require that certain purchasers of securities take physical
delivery of securities they purchase in definitive form. These
laws may impair your ability to transfer beneficial interests in
a global debt security.
We will make payment of principal of, and interest on, debt
securities represented by a global debt security registered in
the name of or held by DTC or its nominee to DTC or its nominee,
as the case may be, as the registered owner and holder of the
global debt security representing those debt securities. DTC has
advised us that upon receipt of any payment of principal of, or
interest on, a global debt security, DTC immediately will credit
accounts of participants on its book-entry registration and
transfer system with payments in amounts proportionate to their
respective interests in the principal amount of that global debt
security, as shown in the records of DTC. Payments by
participants to owners of beneficial interests in a global debt
security held through those participants will be governed by
standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in
bearer form or registered in street name, and will
be the sole responsibility of those participants, subject to any
statutory or regulatory requirements that may be in effect from
time to time.
Neither we, any trustee nor any of our respective agents will be
responsible for any aspect of the records of DTC, any nominee or
any participant relating to, or payments made on account
11
of, beneficial interests in a permanent global debt security or
for maintaining, supervising or reviewing any of the records of
DTC, any nominee or any participant relating to such beneficial
interests.
A global debt security is exchangeable for definitive debt
securities registered in the name of, and a transfer of a global
debt security may be registered to, any person other than DTC or
its nominee, only if:
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DTC notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security and
we do not appoint another institution to act as depositary
within 60 days; or
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we notify the trustee that we wish to terminate that global
security.
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Any global debt security that is exchangeable pursuant to the
preceding sentence will be exchangeable in whole for definitive
debt securities in registered form, of like tenor and of an
equal aggregate principal amount as the global debt security, in
denominations specified in the applicable prospectus supplement,
if other than $1,000 and multiples of $1,000. The definitive
debt securities will be registered by the registrar in the name
or names instructed by DTC. We expect that these instructions
may be based upon directions received by DTC from its
participants with respect to ownership of beneficial interests
in the global debt security.
Except as provided above, owners of the beneficial interests in
a global debt security will not be entitled to receive physical
delivery of debt securities in definitive form and will not be
considered the holders of debt securities for any purpose under
the indenture. No global debt security shall be exchangeable
except for another global debt security of like denomination and
tenor to be registered in the name of DTC or its nominee.
Accordingly, each person owning a beneficial interest in a
global debt security must rely on the procedures of DTC and, if
that person is not a participant, on the procedures of the
participant through which that person owns its interest, to
exercise any rights of a holder under the global debt security
or the indenture.
We understand that, under existing industry practices, in the
event that we request any action of holders, or an owner of a
beneficial interest in a global debt security desires to give or
take any action that a holder is entitled to give or take under
the debt securities or the indenture, DTC would authorize the
participants holding the relevant beneficial interests to give
or take that action. Additionally, those participants would
authorize beneficial owners owning through those participants to
give or take that action or would otherwise act upon the
instructions of beneficial owners owning through them.
DTC has advised us as follows:
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a limited-purpose trust company organized under the New York
Banking Law,
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a banking organization within the meaning of the New
York Banking Law,
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a member of the Federal Reserve System,
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a clearing corporation within the meaning of the New
York Uniform Commercial Code, and
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a clearing agency registered under Section 17A
of the Securities Exchange Act of 1934.
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DTC was created to hold securities of its participants and to
facilitate the clearance and settlement of securities
transactions among its participants in those securities through
electronic book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities
certificates.
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DTCs participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other
organizations.
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DTC is owned by a number of its participants and by the New York
Stock Exchange, Inc., the NYSE Alternext US LLC (formerly the
American Stock Exchange, Inc.) and the Financial Industry
Regulatory Authority.
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Access to DTCs book-entry system is also available to
others, such as banks, brokers, dealers and trust companies,
that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
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The rules applicable to DTC and its participants are on file
with the SEC.
Investors may hold interests in the debt securities outside the
United States through the Euroclear System
(Euroclear) or Clearstream Banking
(Clearstream) if they are participants in those
systems, or indirectly through organizations which are
participants in those systems. Euroclear and Clearstream will
hold interests on behalf of their participants through
customers securities accounts in Euroclears and
Clearstreams names on the books of their respective
depositaries which in turn will hold such positions in
customers securities accounts in the names of the nominees
of the depositaries on the books of DTC. At the present time
JPMorgan Chase Bank, National Association will act as
U.S. depositary for Euroclear, and Citibank, National
Association will act as U.S. depositary for Clearstream.
All securities in Euroclear or Clearstream are held on a
fungible basis without attribution of specific certificates to
specific securities clearance accounts.
The following is based on information furnished by Euroclear or
Clearstream, as the case may be.
Euroclear has advised us that:
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It was created in 1968 to hold securities for participants of
Euroclear and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous
transfers of securities and cash;
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Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in
several countries;
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Euroclear is operated by Euroclear Bank S.A./ N.V., as operator
of the Euroclear System (the Euroclear Operator),
under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation (the Cooperative);
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The Euroclear Operator conducts all operations, and all
Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on
behalf of Euroclear participants. Euroclear participants include
banks (including central banks), securities brokers and dealers
and other professional financial intermediaries and may include
underwriters of debt securities offered by this prospectus;
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Indirect access to Euroclear is also available to other firms
that clear through or maintain a custodial relationship with a
Euroclear participant, either directly or indirectly;
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Securities clearance accounts and cash accounts with the
Euroclear Operator are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures
of the Euroclear System, and applicable Belgian law
(collectively, the Terms and Conditions);
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The Terms and Conditions govern transfers of securities and cash
within Euroclear, withdrawals of securities and cash from
Euroclear, and receipts of payments with respect to securities
in Euroclear. The Euroclear Operator acts under the Terms and
Conditions only on behalf of Euroclear participants, and has no
record of or relationship with persons holding through Euroclear
participants; and
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Distributions with respect to debt securities held beneficially
through Euroclear will be credited to the cash accounts of
Euroclear participants in accordance with the Terms and
Conditions, to the extent received by the U.S. depositary
for Euroclear.
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Clearstream has advised us that:
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It is incorporated under the laws of Luxembourg as a
professional depositary and holds securities for its
participating organizations and facilitates the clearance and
settlement of securities transactions between Clearstream
participants through electronic book-entry changes in accounts
of Clearstream participants, thereby eliminating the need for
physical movement of certificates;
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Clearstream provides to Clearstream participants, among other
things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic
markets in several countries;
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As a professional depositary, Clearstream is subject to
regulation by the Luxembourg Monetary Institute;
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Clearstream participants are recognized financial institutions
around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and
certain other organizations and may include underwriters of debt
securities offered by this prospectus;
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Indirect access to Clearstream is also available to others, such
as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Clearstream
participant either directly or indirectly; and
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Distributions with respect to the debt securities held
beneficially through Clearstream will be credited to cash
accounts of Clearstream participants in accordance with its
rules and procedures, to the extent received by the
U.S. depositary for Clearstream.
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We have provided the following descriptions of the operations
and procedures of Euroclear and Clearstream solely as a matter
of convenience. These operations and procedures are solely
within the control of Euroclear and Clearstream and are subject
to change by them from time to time. Neither we, any
underwriters nor the trustee takes any responsibility for these
operations or procedures, and you are urged to contact Euroclear
or Clearstream or their respective participants directly to
discuss these matters.
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Secondary market trading between Euroclear participants and
Clearstream participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Euroclear and Clearstream and will be settled using the
procedures applicable to conventional eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or
indirectly through Euroclear or Clearstream participants, on the
other, will be effected within DTC in accordance with DTCs
rules on behalf of the relevant European international clearing
system by its U.S. depositary; however, such cross-market
transactions will require delivery of instructions to the
relevant European international clearing system by the
counterparty in such system in accordance with its rules and
procedures and within its established deadlines (European time).
The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver
instructions to its U.S. depositary to take action to
effect final settlement on its behalf by delivering or receiving
debt securities in DTC, and making or receiving payment in
accordance with normal procedures. Euroclear participants and
Clearstream participants may not deliver instructions directly
to their respective U.S. depositaries.
Because of time-zone differences, credits of securities received
in Euroclear or Clearstream as a result of a transaction with a
DTC participant will be made during subsequent securities
settlement processing and dated the business day following the
DTC settlement date. Such credits, or any transactions in the
securities settled during such processing, will be reported to
the relevant Euroclear participants or Clearstream participants
on that business day. Cash received in Euroclear or Clearstream
as a result of sales of securities by or through a Euroclear
participant or a Clearstream participant to a DTC participant
will be received with value on the business day of settlement in
DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day following
settlement in DTC.
Although DTC, Euroclear and Clearstream have agreed to the
foregoing procedures in order to facilitate transfers of debt
securities among participants of DTC, Euroclear and Clearstream,
they are under no obligation to perform or continue to perform
such procedures and they may discontinue the procedures at any
time.
Redemption or
repayment
If there are any provisions regarding redemption or repayment
applicable to your debt security, we will describe them in your
prospectus supplement.
We or our affiliates may purchase debt securities from investors
who are willing to sell from time to time, either in the open
market at prevailing prices or in private transactions at
negotiated prices. Debt securities that we or they purchase may,
at our discretion, be held, resold or canceled.
Mergers and
similar transactions
We are generally permitted under the indenture to merge or
consolidate with another corporation or other entity. We are
also permitted under the indenture to sell all or substantially
all of our assets to another corporation or other entity. With
regard to any series of debt securities,
15
however, we may not take any of these actions unless all the
following conditions, among other things, are met:
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If the successor entity in the transaction is not Anadarko the
successor entity must be organized as a corporation, partnership
or trust and must expressly assume our obligations under the
debt securities of that series and the indenture. The successor
entity may be organized under the laws of any jurisdiction,
whether in the United States or elsewhere.
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Immediately after the transaction, no default under the debt
securities of that series has occurred and is continuing. For
this purpose, default under the debt securities of that
series means an event of default with respect to that
series or any event that would be an event of default with
respect to that series if the requirements for giving us default
notice and for our default having to continue for a specific
period of time were disregarded. We describe these matters below
under Default, Remedies and Waiver of Default.
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If the conditions described above are satisfied with respect to
the debt securities of any series, we will not need to obtain
the approval of the holders of those debt securities in order to
merge or consolidate or to sell our assets. Also, these
conditions will apply only if we wish to merge or consolidate
with another entity or sell all or substantially all of our
assets to another entity. We will not need to satisfy these
conditions if we enter into other types of transactions,
including any transaction in which we acquire the stock or
assets of another entity, any transaction that involves a change
of control of Anadarko but in which we do not merge or
consolidate and any transaction in which we sell less than
substantially all our assets.
If we sell all or substantially all of our assets, we will be
released from all our liabilities and obligations under the debt
securities of any series and the indenture. Also, if we merge,
consolidate or sell substantially all of our assets and the
successor is a
non-U.S. entity,
neither we nor any successor would have any obligation to
compensate you for any resulting adverse tax consequences
relating to your debt securities, including the imposition of
U.S. withholding taxes in relation to future interest
payments. Our succession by a
non-U.S. entity
could also impede the effective exercise of remedies available
to the trustee or holders of debt securities following an event
of default with respect to such debt securities.
Defeasance
When we use the term defeasance, we mean discharge from some or
all of our obligations under the indenture. If we deposit with
the trustee funds or government securities, or if so provided in
your prospectus supplement, obligations other than government
securities, sufficient to make payments on any series of debt
securities on the dates those payments are due and payable and
other specified conditions are satisfied, then, at our option,
either of the following will occur:
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we will be discharged from our obligations with respect to the
debt securities of such series (legal
defeasance); or
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the related events of default will no longer apply to us
(covenant defeasance).
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If we defease any series of debt securities, the holders of such
securities will not be entitled to the benefits of the
indenture, except for our obligations to register the transfer
or exchange of such securities, replace stolen, lost or
mutilated securities or maintain paying agencies and hold moneys
for payment in trust. In case of covenant defeasance, our
obligation to pay principal, premium and interest on the
applicable series of debt securities will also survive.
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We will be required to deliver to the trustee an opinion of
counsel that the deposit and related defeasance would not cause
the holders of the applicable series of debt securities to
recognize income, gain or loss for federal income tax purposes.
If we elect legal defeasance, that opinion of counsel must be
based upon a ruling from the United States Internal Revenue
Service or a change in law to that effect.
In addition, we may discharge all our obligations under the
indenture with respect to debt securities of any series, other
than our obligation to register the transfer of and exchange
debt securities of that series, provided that we either:
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deliver all outstanding debt securities of that series to the
trustee for cancellation; or
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all such debt securities not so delivered for cancellation have
either become due and payable or will become due and payable at
their stated maturity within one year or are to be called for
redemption within one year, and in the case of this bullet
point, we have deposited with the trustee in trust an amount of
cash sufficient to pay the entire indebtedness of such debt
securities, including interest to the stated maturity or
applicable redemption date.
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Limitations on
liens
Neither we nor any domestic subsidiary of ours will issue,
assume or guarantee any debt secured by a mortgage, lien, pledge
or other encumbrance upon real or personal property of ours or
of any of our domestic subsidiaries that is located in the
continental U.S. without providing that the debt securities
will be secured equally and ratably or prior to the debt so long
as the debt is so secured. However, this provision shall not
apply to the following:
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Mortgages existing on the date of the indenture;
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Mortgages existing at the time a corporation, limited liability
company, limited partnership or other entity becomes a domestic
subsidiary of ours or at the time it is merged into or
consolidated with us or a domestic subsidiary of ours;
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Mortgages in favor of Anadarko or any domestic subsidiary of
ours;
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Mortgages on property (a) existing at the time of the
propertys acquisition, (b) to secure payment of all
or part of the propertys purchase price, or (c) to
secure debt incurred prior to, at the time of or within
180 days after the acquisition, the completion of
construction or the commencement of full operation of the
property or for the purpose of financing all or part of the
propertys purchase price;
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Mortgages in favor of the United States of America, any state,
any other country or any political subdivision required by
contract or statute;
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Mortgages on property to secure all or part of the cost of
construction, development or repair, alteration or improvement
of the property not later than one year after the completion of
or the placing into operation the property;
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Mortgages on minerals or geothermal resources in place, or on
related leasehold or other property interests, which are
incurred to finance development, production or acquisition costs;
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Mortgages on equipment used or usable for drilling, servicing or
operation of oil, gas, coal or other mineral properties or of
geothermal properties;
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Mortgages required by any contract or statute in order to permit
us or a subsidiary of ours to perform any contract or
subcontract made with or at the request of the U.S., any state
or any department, agency or instrumentality of either; or
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Any extension, renewal or replacement of any mortgage referred
to in the preceding items or of any debt secured by those
mortgages as long as the extension, renewal or replacement will
be limited to substantially the same property (plus
improvements) which secured the mortgage.
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Notwithstanding anything mentioned above, we and any one or more
of our domestic subsidiaries may issue, assume or guarantee debt
secured by mortgages that would otherwise be subject to the
foregoing restrictions in an aggregate principal amount which,
together with the aggregate outstanding principal amount of all
other debt of ours and our domestic subsidiaries that would
otherwise be subject to the foregoing restrictions, does not at
any one time exceed 15% of our Consolidated Net Tangible Assets,
which is defined as the aggregate amount of assets of Anadarko
and its domestic subsidiaries after deducting therefrom all
current liabilities (other than current maturities of long term
debt), goodwill, unamortized debt discount and expense and other
like intangibles as calculated on our consolidated balance sheet
as of a date within 150 days prior to the date of
determination.
In addition, the preceding restrictions shall apply only to the
following types of property:
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minerals or geothermal resources in place, pipelines,
distribution or gathering systems, storage facilities or
processing plants located in the U.S. and owned by us or
any domestic subsidiary, the gross book value of which exceeds
5% of our Consolidated Net Tangible Assets, other than any such
property which, in the opinion of our board of directors, is not
of material importance to our total business; and
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equity interests in our domestic subsidiaries.
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The following types of transactions shall not be deemed to
create debt secured by mortgages: (1) the sale or other
transfer of oil, gas or other minerals in place for a period of
time until, or in an amount such that, the transferee will
realize from the sale or transfer a specified amount (however
determined) of money or such minerals, or the sale or other
transfer of any other interest in property of the character
commonly referred to as an oil payment or a production payment,
and (2) the sale or other transfer by Anadarko or a
domestic subsidiary of properties to a partnership, joint
venture or other entity in which we or our domestic subsidiary
would retain partial ownership of the properties.
Default, remedies
and waiver of default
You will have special rights if an event of default with respect
to your series of debt securities occurs and is continuing, as
described in this subsection.
Events of
default
Unless your prospectus supplement says otherwise, when we refer
to an event of default with respect to any series of debt
securities, we mean any of the following:
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we do not pay the principal or any premium on any debt security
of that series on the due date;
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we do not pay interest on any debt security of that series
within 60 days after the due date;
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we do not deposit a sinking fund payment with regard to any debt
security of that series within 60 days after the due date,
but only if the payment is required under provisions described
in the applicable prospectus supplement;
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we default in the payment when due of other funded debt in an
aggregate principal amount in excess of $100,000,000, causing
such debt to become due before its stated maturity, and such
default is not cured within 30 days after notice from the
trustee or the holders of at least 25% in principal amount of
the outstanding debt securities of the series;
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we remain in breach of our covenants regarding mergers or sales
of substantially all of our assets, our covenant regarding
liens, or any other covenant we make in the indenture for the
benefit of the relevant series, for 90 days after we
receive a notice of default stating that we are in breach and
requiring us to remedy the breach. The notice must be sent by
the trustee or the holders of at least 25% in principal amount
of the relevant series of debt securities;
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we file for bankruptcy or other events of bankruptcy, insolvency
or reorganization relating to Anadarko occur. Those events must
arise under U.S. federal or state law, unless we merge,
consolidate or sell our assets as described above and the
successor firm is a
non-U.S. entity.
If that happens, then those events must arise under
U.S. federal or state law or the law of the jurisdiction in
which the successor firm is legally organized; or
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if the applicable prospectus supplement states that any
additional event of default applies to the series, that event of
default occurs.
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Remedies if an
event of default occurs
If an event of default has occurred with respect to any series
of debt securities and has not been cured or waived, the trustee
or the holders of not less than 25% in principal amount of all
debt securities of that series may declare the entire principal
amount of the debt securities of that series to be due
immediately. If the event of default occurs because of events in
bankruptcy, insolvency or reorganization relating to Anadarko,
the entire principal amount of the debt securities of that
series will be automatically accelerated, without any action by
the trustee or any holder.
Each of the situations described above is called an acceleration
of the maturity of the affected series of debt securities. If
the maturity of any series is accelerated and a judgment for
payment has not yet been obtained, the holders of a majority in
principal amount of the debt securities of that series may
cancel the acceleration for the entire series.
Indentures governing our outstanding public debt contain
so-called cross-acceleration events of default, and
the absence of such an event of default in the indenture could
disadvantage holders of the debt securities by preventing the
trustee from pursuing remedies under the indenture at a time
when our other creditors may be exercising remedies under these
other indentures.
If an event of default occurs, the trustee will have special
duties. In that situation, the trustee will be obligated to use
those of its rights and powers under the indenture, and to use
the same degree of care and skill in doing so, that a prudent
person would use in that situation in conducting his or her own
affairs.
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Except as described in the prior paragraph, the trustee is not
required to take any action under the indenture at the request
of any holders unless the holders offer the trustee reasonable
protection from expenses and liability. This is called an
indemnity. If the trustee is provided with an indemnity
reasonably satisfactory to it, the holders of a majority in
principal amount of all debt securities of the relevant series
may direct the time, method and place of conducting any lawsuit
or other formal legal action seeking any remedy available to the
trustee with respect to that series. These majority holders may
also direct the trustee in performing any other action under the
indenture with respect to the debt securities of that series.
Before you bypass the trustee and bring your own lawsuit or
other formal legal action or take other steps to enforce your
rights or protect your interests relating to any debt security,
all of the following must occur:
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the holder of your debt security must give the trustee written
notice that an event of default has occurred with respect to the
debt securities of your series, and the event of default must
not have been cured or waived;
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the holders of not less than 25% in principal amount of all debt
securities of your series must make a written request that the
trustee take action because of the default, and they or other
holders must offer to the trustee indemnity reasonably
satisfactory to the trustee against the cost and other
liabilities of taking that action;
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the trustee must not have taken action for 60 days after
the above steps have been taken; and
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during those 60 days, the holders of a majority in
principal amount of the debt securities of your series must not
have given the trustee directions that are inconsistent with the
written request of the holders of not less than 25% in principal
amount of the debt securities of your series.
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You are entitled at any time, however, to bring a lawsuit for
the payment of money due on your debt security on or after its
due date.
Book-entry and other indirect owners should consult their banks
or brokers for information on how to give notice or direction to
or make a request of the trustee and how to declare or cancel an
acceleration of the maturity.
Wavier of
default
The holders of not less than a majority in principal amount of
the debt securities of any series may waive a default for all
debt securities of that series. If this happens, the default
will be treated as if it has not occurred. No one can waive a
payment default on your debt security, however, without the
approval of the particular holder of that debt security.
Annual
information about defaults to the trustee
We will furnish to the trustee every year a written statement of
two of our officers certifying that to their knowledge we are in
compliance with the indenture and the debt securities, or else
specifying any default under the indenture.
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Modifications and
waivers
There are three types of changes we can make to the indenture
and the debt securities.
First, there are changes that cannot be made without the
approval of each holder of a debt security affected by the
change, including, among others:
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changing the stated maturity for any principal or interest
payment on a debt security;
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reducing the principal amount, the amount payable on
acceleration of the maturity after a default, the interest rate
or the redemption price for a debt security;
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changing the currency of any payment on a debt security;
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changing the place of payment on a debt security;
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impair a holders right to sue for payment of any amount
due on its debt security;
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reducing the percentage in principal amount of the debt
securities of any one or more affected series, taken separately
or together, as applicable, the approval of whose holders is
needed to change the indenture or those debt securities or waive
our compliance with the indenture or to waive defaults; and
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changing the provisions of the indenture dealing with
modification and waiver in any other respect, except to increase
any required percentage referred to above or to add to the
provisions that cannot be changed or waived without approval of
the holder of each affected debt security.
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The second type of change does not require any approval by
holders of the debt securities of an affected series. These
changes are limited to clarifications and changes that would not
adversely affect the debt securities of that series in any
material respect. Nor do we need any approval to make changes
that affect only debt securities to be issued after the changes
take effect. We may also make changes or obtain waivers that do
not adversely affect a particular debt security, even if they
affect other debt securities. In those cases, we do not need to
obtain the approval of the holder of the unaffected debt
security; we need only obtain any required approvals from the
holders of the affected debt securities.
Any other change to the indenture and the debt securities would
require the following approval:
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If the change affects only the debt securities of a particular
series, it must be approved by the holders of a majority in
principal amount of the debt securities of that series.
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If the change affects the debt securities of more than one
series of debt securities, it must be approved by the holders of
a majority in principal amount of all series affected by the
change, with the debt securities of all the affected series
voting together as one class for this purpose (and of any
affected series that by its terms is entitled to vote separately
as a series, as described below).
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If the terms of a series entitle the holders of debt securities
of such series to vote as separate class on any change, it must
be approved as required under those terms.
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The same majority approval would be required for us to obtain a
waiver of any of our covenants in the indenture. Our covenants
include the promises we make about merging or selling
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substantially all of our assets, which we describe above under
Mergers and Similar Transactions. If the
holders approve a waiver of a covenant, we will not have to
comply with it. The holders, however, cannot approve a waiver of
any provision in a particular debt security, or in the indenture
as it affects that debt security, that we cannot change without
the approval of the holder of that debt security as described
above, unless that holder approves the waiver.
Only holders of outstanding debt securities of the applicable
series will be eligible to take any action under the indenture,
such as giving a notice of default, declaring an acceleration,
approving any change or waiver or giving the trustee an
instruction with respect to debt securities of that series.
Also, we will count only outstanding debt securities in
determining whether the various percentage requirements for
taking action have been met. Any debt securities owned by us or
any of our affiliates or surrendered for cancellation or for
payment or redemption of which money has been set aside in trust
are not deemed to be outstanding.
In some situations, we may follow special rules in calculating
the principal amount of a debt security that is to be treated as
outstanding for the purposes described above. This may happen,
for example, if the principal amount is payable in a
non-U.S. dollar
currency, increases over time or is not to be fixed until
maturity.
We will generally be entitled to set any day as a record date
for the purpose of determining the holders that are entitled to
take action under the indenture. In certain limited
circumstances, only the trustee will be entitled to set a record
date for action by holders. If we or the trustee sets a record
date for an approval or other action to be taken by holders,
that vote or action may be taken only by persons or entities who
are holders on the record date and must be taken during the
period that we specify for this purpose, or that the trustee
specifies if it sets the record date. We or the trustee, as
applicable, may shorten or lengthen this period from time to
time. This period, however, may not extend beyond the
180th day after the record date for the action. In
addition, record dates for any global debt security may be set
in accordance with procedures established by the depositary from
time to time. Accordingly, record dates for global debt
securities may differ from those for other debt securities.
Form, exchange
and transfer
If any debt securities cease to be issued in registered global
form, they will be issued:
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only in fully registered form;
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without interest coupons; and
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unless we indicate otherwise in your prospectus supplement, in
denominations of $1,000 and multiples of $1,000.
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Holders may exchange their debt securities for debt securities
of smaller denominations or combined into fewer debt securities
of larger denominations, as long as the total principal amount
is not changed. You may not exchange your debt securities for
securities of a different series or having different terms,
unless your prospectus supplement says you may.
Holders may exchange or transfer their debt securities at the
office of the trustee. They may also replace lost, stolen,
destroyed or mutilated debt securities at that office. We have
appointed the trustee to act as our agent for registering debt
securities in the names of holders and transferring and
replacing debt securities. We may appoint another entity to
perform these functions or perform them ourselves.
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Holders will not be required to pay a service charge to transfer
or exchange their debt securities, but they may be required to
pay for any tax or other governmental charge associated with the
exchange or transfer. The transfer or exchange, and any
replacement, will be made only if our transfer agent is
satisfied with the holders proof of legal ownership. The
transfer agent may require an indemnity before replacing any
debt securities.
If we have designated additional transfer agents for your debt
security, they will be named in your prospectus supplement. We
may appoint additional transfer agents or cancel the appointment
of any particular transfer agent. We may also approve a change
in the office through which any transfer agent acts.
If the debt securities of any series are redeemable and we
redeem less than all those debt securities, we may block the
transfer or exchange of those debt securities during the period
beginning 15 days before the day we mail the notice of
redemption and ending on the day of that mailing, in order to
freeze the list of holders to prepare the mailing. We may also
refuse to register transfers of or exchange any debt security
selected for redemption, except that we will continue to permit
transfers and exchanges of the unredeemed portion of any debt
security being partially redeemed.
If a debt security is issued as a global debt security, only DTC
or other depositary will be entitled to transfer and exchange
the debt security as described in this subsection, since the
depositary will be the sole holder of the debt security.
The rules for exchange described above apply to exchange of debt
securities for other debt securities of the same series and
kind. If a debt security is convertible, exercisable or
exchangeable into or for a different kind of security, such as
one that we have not issued, or for other property, the rules
governing that type of conversion, exercise or exchange will be
described in the applicable prospectus supplement.
Payments
We will pay interest, principal and other amounts payable with
respect to the debt securities of any series to the holders of
record of those debt securities as of the record dates and
otherwise in the manner specified below or in the prospectus
supplement for that series.
We will make payments on a global debt security in accordance
with the applicable policies of the depositary as in effect from
time to time. Under those policies, we will pay directly to the
depositary, or its nominee, and not to any indirect owners who
own beneficial interests in the global debt security. An
indirect owners right to receive those payments will be
governed by the rules and practices of the depositary and its
participants.
We will make payments on a debt security in non-global,
registered form as follows. We will pay interest that is due on
an interest payment date by check mailed on the interest payment
date to the holder at his or her address shown on the
trustees records as of the close of business on the
regular record date. We will make all other payments by check at
the paying agent described below, against surrender of the debt
security. All payments by check will be made in
next-day
fundsi.e., funds that become available on the day after
the check is cashed.
Alternatively, if a non-global debt security has a face amount
of at least $1,000,000 and the holder asks us to do so, we will
pay any amount that becomes due on the debt security by wire
transfer of immediately available funds to an account at a bank
in New York City, on the due date. To request wire payment, the
holder must give the paying agent appropriate wire transfer
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instructions at least five business days before the requested
wire payment is due. In the case of any interest payment due on
an interest payment date, the instructions must be given by the
person or entity who is the holder on the relevant regular
record date. In the case of any other payment, payment will be
made only after the debt security is surrendered to the paying
agent. Any wire instructions, once properly given, will remain
in effect unless and until new instructions are given in the
manner described above.
Book-entry and other indirect owners should consult their banks
or brokers for information on how they will receive payments on
their debt securities.
Paying
agents
We may appoint one or more financial institutions to act as our
paying agents, at whose designated offices debt securities in
non-global entry form may be surrendered for payment at their
maturity. We call each of those offices a paying agent. We may
add, replace or terminate paying agents from time to time. We
may also choose to act as our own paying agent. We will specify
in the prospectus supplement for your debt security the initial
location of each paying agent for that debt security. We must
notify the trustee of changes in the paying agents.
Notices
Notices to be given to holders of a global debt security will be
given only to the depositary, in accordance with its applicable
policies as in effect from time to time. Notices to be given to
holders of debt securities not in global form will be sent by
mail to the respective addresses of the holders as they appear
in the trustees records, and will be deemed given when
mailed. Neither the failure to give any notice to a particular
holder, nor any defect in a notice given to a particular holder,
will affect the sufficiency of any notice given to another
holder.
Book-entry and other indirect owners should consult their banks
or brokers for information on how they will receive notices.
Our relationship
with the trustee
The prospectus supplement for your debt security will describe
any material relationships we may have with the trustee.
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Description of
capital stock
As of the date of this prospectus, we are authorized to issue up
to 1,000,000,000 shares of common stock, par value $0.10
per share, and 2,000,000 shares of preferred stock, par
value $1.00 per share.
The following summary is not complete and is not intended to
give full effect to provisions of statutory or common law. You
should refer to the applicable provisions of the following
documents:
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our restated certificate of incorporation, which is incorporated
by reference to Exhibit 3.3 to our
Form 8-K
dated May 21, 2009;
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our by-laws, as amended and restated as of May 21, 2009,
which are incorporated by reference to Exhibit 3.4 to our
Form 8-K
dated May 21, 2009; and
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the description of our common stock set forth in the
registration statement on
Form 8-A
filed with the SEC on September 3, 1986.
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Common
stock
Dividends. The holders of our common stock are
entitled to receive dividends when, as and if declared by our
board of directors, out of funds legally available for their
payment subject to the rights of holders of preferred stock.
Voting Rights. The holders of our common stock are
entitled to one vote per share on all matters submitted to a
vote of stockholders, and do not have cumulative voting rights
except in limited circumstances as described below under
Anti-Takeover Provisions of Anadarkos Charter
and By-lawsCumulative Voting.
Rights Upon Liquidation. In the event of our
voluntary or involuntary liquidation, dissolution or winding up,
the holders of our common stock will be entitled to share
equally in any of our assets available for distribution after
the payment in full of all debts and distributions and after the
holders of all series of outstanding preferred stock have
received their liquidation preferences in full.
Listing. Our common stock is listed on the New York
Stock Exchange under the symbol APC.
Transfer Agent and Registrar. The transfer agent and
registrar for our common stock is BNY Mellon Shareowner
Services, P.O. Box 358016, Pittsburgh, Pennsylvania
15252-8016.
Its phone number is
(888) 470-5786.
Miscellaneous. The outstanding shares of our common
stock are fully paid and nonassessable. The holders of our
common stock are not entitled to preemptive or redemption
rights. Shares of our common stock are not convertible into
shares of any other class of capital stock.
Preferred
stock
Our restated certificate of incorporation authorizes our board
of directors, without further stockholder action, to provide for
the issuance of preferred stock in one or more series, and to
fix the designations, terms, and relative rights and
preferences, including the dividend rate, voting rights,
conversion rights, redemption and sinking fund provisions and
liquidation values
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of each of these series. We may amend from time to time our
restated certificate of incorporation to increase the number of
authorized shares of preferred stock. Any amendment like this
would require the approval of the holders of a majority of the
outstanding shares. As of the date of this prospectus, no shares
of preferred stock have been reserved for issuance.
The following describes the general terms and provisions of the
preferred stock that we may offer by this prospectus. The
applicable prospectus supplement will describe the specific
terms of the series of the preferred stock then offered, and the
terms and provisions described in this section will apply only
to the extent not superseded by the terms of the applicable
prospectus supplement.
This section is only a summary of the preferred stock that we
may offer. We urge you to read carefully our restated
certificate of incorporation and the certificate of designation
we will file in relation to an issue of any particular series of
preferred stock. Additionally, any applicable prospectus
supplement will describe:
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the distinctive serial designation and the number of shares;
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the dividend rate or rates, whether dividends shall be
cumulative and, if so, from what date, the payment date or dates
for dividends, and any participating or other special rights
with respect to dividends;
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any voting powers of the shares;
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whether the shares will be redeemable and, if so, the price or
prices at which, and the terms and conditions on which, the
shares may be redeemed;
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the amount or amounts payable upon the shares in the event of
voluntary or involuntary liquidation, dissolution or winding up
of us prior to any payment or distribution of our assets to any
class or classes of our stock ranking junior to the preferred
stock;
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whether the shares will be entitled to the benefit of a sinking
or retirement fund and, if so entitled, the amount of the fund
and the manner of its application, including the price or prices
at which the shares may be redeemed or purchased through the
application of the fund;
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whether the shares will be convertible into, or exchangeable
for, shares of any other class or of any other exchangeable, the
conversion price or prices, or the rates of exchange, and any
adjustments to the conversion price or rates of exchange at
which the conversion or exchange may be made, and any other
terms and conditions of the conversion or exchange; and
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any other preferences, privileges and powers, and relative,
participating, optional, or other special rights, and
qualifications, limitations or restrictions, as our board of
directors may deem advisable and as shall not be inconsistent
with the provisions of our restated certificate of incorporation.
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The preferred stock, when issued, will be fully paid and
non-assessable. Unless the applicable prospectus supplement
provides otherwise, the preferred stock will have no preemptive
rights to subscribe for any additional securities which may be
issued by us in the future. The transfer agent and registrar for
the preferred stock will be specified in the applicable
prospectus supplement.
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Anti-takeover
provisions of Anadarkos charter and by-laws
Our restated certificate of incorporation and by-laws contain
certain provisions that could discourage potential takeover
attempts and make it more difficult for our stockholders to
change management or receive a premium for their shares.
Stockholder Action by Written Consent; Special Meetings of
Stockholders. Our restated certificate of incorporation
provides that any action required or permitted to be taken by
our stockholders may only be effected at a duly called annual or
special meeting of the stockholders, and may not be taken by
written consent of the stockholders. Under our by-laws, special
meetings of stockholders may only be called by a majority of our
board, our chairman of the board, our chief executive officer or
our president.
Advance Notice Procedures for Director Nominations and
Stockholder Proposals. Our by-laws provide the manner
in which stockholders may give notice of director nominations
and other business to be brought before an annual meeting. In
general, to nominate a director or bring a matter before an
annual meeting, a stockholder must give written notice to
Anadarkos Secretary not less than 90 days and not
more than 120 days prior to the first anniversary date of
the immediately preceding annual meeting. If the date of the
annual meeting is more than 30 days before or more than
60 days after the anniversary date of the preceding annual
meeting, the stockholder notice must be received not earlier
than the 120th day prior to the annual meeting and not later
than the close of business on the later of (i) the 90th day
prior to the annual meeting or (ii) if the first public
announcement of the date of the annual meeting is less than
100 days prior to the date of the annual meeting, the 10th
day following the day on which Anadarko publicly announces the
date of the annual meeting. The stockholder notice must also
include specific information regarding the stockholder and the
director nominee or business to be brought before the annual
meeting, as described in our by-laws. The advance notice
procedures for director nominations and stockholder proposals
set forth in our by-laws are in addition to those set forth in
the regulations adopted by the SEC under the Securities Exchange
Act of 1934, as amended.
Board Classification and Director Removal. At the
2009 Annual Meeting of Stockholders, our stockholders approved
certain amendments to our then-existing restated certificate of
incorporation. These amendments provided for, among other
things, the phased elimination over three years of our
classified board and the annual election of our directors
beginning in 2012. Until our board is declassified, our
directors may be removed only for cause, and after that time,
may be removed with or without cause, in each case with the
approval of the holders of a majority of the shares then
entitled to vote at an election of directors. Vacancies
resulting from any increase in the number of directors or from
death, resignation, disqualification, removal or other cause may
be filled by a majority of the directors then in office, even if
less than a quorum, or by a sole remaining director.
Fair Price Provision. Our restated certificate of
incorporation requires that business combinations, which term is
defined to include certain mergers, asset sales, security
issuances, recapitalizations and liquidations, with an
interested person or affiliate or associate of an interested
person be approved by the affirmative vote of not less than 80%
of our voting stock. For purposes of our restated certificate of
incorporation, an interested person is any person who
beneficially owns 5% or more of the outstanding shares of our
voting stock or who, at any time within the two-year period
immediately prior to the date in question, beneficially owned 5%
or more of the then-outstanding shares of our voting stock. The
supermajority voting requirement for business combinations does
not apply if: (i) a majority of the directors who are
unaffiliated
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with the interested stockholder and who were in office before
the interested stockholder became an interested stockholder
approve the transaction or (ii) specified fair price, form
of consideration and other conditions are met.
Cumulative Voting. Directors will be elected by
cumulative voting in any election on or after the date on which
any 30% stockholder becomes a 30% stockholder, and until the
time as no 30% stockholder exists. A 30% stockholder is defined
in our restated certificate of incorporation as any person who
beneficially owns 30% or more of the outstanding shares of our
voting stock or who, at any time within the two-year period
immediately prior to the date in question, beneficially owned
30% or more of the then-outstanding shares of our voting stock.
Amendment of Charter. Amendments to our restated
certificate of incorporation generally must be approved by our
board and by a majority of our outstanding stock entitled to
vote on the amendment, and, if applicable, by a majority of the
outstanding stock of each class entitled to vote on the
amendment as a class. However, the affirmative vote of not less
than 80% of the votes entitled to be cast by the holders of the
then-outstanding shares of voting stock is required to amend or
repeal provisions of our restated certificate of incorporation
relating to (i) the elimination of our classified board,
(ii) the limitation or elimination of directors
liability to us and our stockholders, (iii) business
combinations with interested stockholders as described above,
(iv) prohibition of stockholder action by written consent
and special meetings of stockholders and (v) the
supermajority voting requirement to amend certain provisions of
our restated certificate of incorporation.
Preferred Stock Issuances. In the event of a
proposed merger or tender offer, proxy contest or other attempt
to gain control of us which is not approved by our board of
directors, it would be possible for our board of directors to
authorize the issuance of one or more series of preferred stock
with voting rights or other rights and preferences which would
impede the success of the proposed merger, tender offer, proxy
contest or other attempt to gain control of us. This authority
may be limited by applicable law, our restated certificate of
incorporation and the applicable rules of the stock exchanges
upon which our common stock is listed. The consent of the
holders of our common stock would not be required for any
issuance of preferred stock in these situations.
Delaware
anti-takeover law
We are subject to Section 203 of the General Corporation
Law of the State of Delaware, or the DGCL, an
anti-takeover law. In general, the statute prohibits a publicly
held Delaware corporation from engaging in a business
combination with an interested stockholder for a
period of three years after the date of the transaction in which
the person became an interested stockholder. A business
combination includes a merger, sale of 10% or more of a
corporations assets and certain other transactions
resulting in a financial benefit to the interested stockholder.
For purposes of Section 203, an interested
stockholder is defined to include any person that is:
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the owner of 15% or more of the outstanding voting stock of the
corporation;
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an affiliate or associate of the corporation and was the owner
of 15% or more of the corporations voting stock
outstanding, at any time within three years immediately before
the relevant date; and
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an affiliate or associate of the persons described in the
foregoing bullet points.
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However, the above provisions of Section 203 do not apply
if:
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the corporations board approves the transaction that
resulted in the stockholder an interested stockholder before the
date of that transaction;
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after the completion of the transaction that resulted in the
stockholder becoming an interested stockholder, that stockholder
owned at least 85% of the corporations voting stock
outstanding at the time the transaction commenced, excluding
shares owned by the corporations officers and
directors; or
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on or subsequent to the date of the transaction, the business
combination is approved by the corporations board and
authorized at a meeting of the corporations stockholders
by an affirmative vote of at least two-thirds of the outstanding
voting stock not owned by the interested stockholder.
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Stockholders may, by adopting an amendment to the
corporations certificate of incorporation or by-laws,
elect for the corporation not to be governed by
Section 203, which amendment will generally be effective
12 months after adoption. Neither our restated certificate
of incorporation nor our by-laws exempts us from the
restrictions imposed under Section 203. It is anticipated
that the provisions of Section 203 may encourage companies
interested in acquiring us to negotiate in advance with our
board.
Limitation of
liability; indemnification
Our restated certificate of incorporation contains certain
provisions permitted under the DGCL relating to the liability of
directors. These provisions eliminate a directors personal
liability for monetary damages resulting from a breach of
fiduciary duty, except that a director will be personally liable:
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for any breach of the directors duty of loyalty to us or
our stockholders;
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for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
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under Section 174 of the DGCL relating to unlawful stock
repurchases or dividends; and
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for any transaction from which the director derives an improper
personal benefit.
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These provisions do not limit or eliminate our rights or those
of any stockholder to seek non-monetary relief, such as an
injunction or rescission, in the event of a breach of a
directors fiduciary duty. These provisions will not alter
a directors liability under federal securities laws.
Our by-laws also provide that we must indemnify our directors
and officers to the fullest extent permitted by Delaware law and
that we must advance expenses, as incurred, to our directors and
officers in connection with a legal proceeding to the fullest
extent permitted by Delaware law, subject to very limited
exceptions.
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Description of
depositary shares
We may offer fractional shares of preferred stock, rather than
full shares of preferred stock. If we decide to offer fractional
shares of preferred stock, we will issue receipts for depositary
shares. Each depositary share will represent a fraction of a
share of a particular series of preferred stock. An accompanying
prospectus supplement will indicate that fraction. The shares of
preferred stock represented by depositary shares will be
deposited under a depositary agreement between us and a
depositary that is a bank or trust company that meets certain
requirements and is selected by us. Each owner of a depositary
share will be entitled to all of the rights and preferences of
the preferred stock represented by the depositary share. The
depositary shares will be evidenced by depositary receipts
issued pursuant to the depositary agreement. Depositary receipts
will be distributed to those persons purchasing the fractional
shares of preferred stock in accordance with the terms of the
offering.
We have summarized selected provisions of the depositary
agreement and the depositary receipts. The form of the
depositary agreement and the depositary receipts relating to any
particular issue of depositary shares will be filed with the SEC
in connection with any offering of depositary shares, and you
should read those documents for the full legal text of the
matters described in this section and in the prospectus
supplement relating to the issue and for provisions that may be
important to you. See Where You Can Find More
Information above for information on how to obtain copies
of these documents.
The particular terms of any issue of depositary shares will be
described in the prospectus supplement relating to the issue.
Those terms may vary from the terms described in this section.
As you read this section, please remember that the specific
terms of your depositary shares as described in your prospectus
supplement will supplement and, if applicable, may modify or
replace the general terms described in this section. If there
are any differences between your prospectus supplement and this
prospectus, your prospectus supplement will control. Thus, the
statements we make in this section may not apply to your
depositary shares.
Dividends and
other distributions
If we pay a cash distribution or dividend on a series of
preferred stock represented by depositary shares, the depositary
will distribute such dividends to the record holders of such
depositary shares. If the distributions are in property other
than cash, the depositary will distribute the property to the
record holders of the depositary shares. If, however, the
depositary determines that it is not feasible to make the
distribution of property, the depositary may, with our approval,
sell such property and distribute the net proceeds from such
sale to the holders of the preferred stock.
Redemption of
depositary shares
If we redeem a series of preferred stock represented by
depositary shares, the depositary will redeem the depositary
shares from the proceeds received by the depositary in
connection with the redemption. The redemption price per
depositary share will equal the applicable fraction of the
redemption price per share of the preferred stock. If fewer than
all the depositary shares are redeemed, the depositary shares to
be redeemed will be selected by lot or pro rata as the
depositary may determine.
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Voting the
preferred stock
Upon receipt of notice of any meeting at which the holders of
the preferred stock represented by depositary shares are
entitled to vote, the depositary will mail the notice to the
record holders of the depositary shares relating to such
preferred stock. Each record holder of these depositary shares
on the record date, which will be the same date as the record
date for the preferred stock, may instruct the depositary as to
how to vote the preferred stock represented by such
holders depositary shares. The depositary will endeavor,
insofar as practicable, to vote the amount of the preferred
stock represented by such depositary shares in accordance with
such instructions, and we will take all action that the
depositary deems necessary in order to enable the depositary to
do so. The depositary will abstain from voting shares of the
preferred stock to the extent it does not receive specific
instructions from the holders of depositary shares representing
such preferred stock.
Amendment and
termination of the depositary agreement
The form of depositary receipt evidencing the depositary shares
and any provision of the depositary agreement may be amended by
agreement between the depositary and us. Any amendment that
materially and adversely alters the rights of the holders of
depositary shares will not, however, be effective unless such
amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The
depositary agreement may be terminated by the depositary or us
only if (a) all outstanding depositary shares have been
redeemed or (b) there has been a final distribution in
respect of the preferred stock in connection with any
liquidation, dissolution or winding up of our company and such
distribution has been distributed to the holders of depositary
receipts.
Charges of
depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We will pay charges of the depositary in
connection with the initial deposit of the preferred stock and
any redemption of the preferred stock. Holders of depositary
receipts will pay other taxes (including transfer taxes) and
governmental charges and any other charges, including a fee for
the withdrawal of shares of preferred stock upon surrender of
depositary receipts, as are expressly provided in the depositary
agreement to be at the expense of those holders.
Withdrawal of
preferred stock
Upon surrender of depositary receipts at the principal office of
the depositary, subject to the terms of the depositary
agreement, the owner of the depositary shares may demand
delivery of the number of whole shares of preferred stock and
all money and other property, if any, represented by those
depositary shares. Partial shares of preferred stock will not be
issued. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number
of whole shares of preferred stock to be withdrawn, the
depositary will deliver to such holder at the same time a new
depositary receipt evidencing the excess number of depositary
shares. Holders of preferred stock thus withdrawn may not
thereafter deposit those shares under the depositary agreement
or receive depositary receipts evidencing depositary shares
therefor.
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Miscellaneous
The depositary will forward to holders of depositary receipts
all reports and communications from us that are delivered to the
depositary and that we are required to furnish to the holders of
the preferred stock.
Neither we nor the depositary will be liable if we are prevented
or delayed by law or any circumstance beyond our control in
performing our obligations under the depositary agreement. The
obligations of the depositary and us under the depositary
agreement will be limited to performance in good faith of our
duties thereunder, and we will not be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares
or preferred stock unless satisfactory indemnity is furnished.
We may rely upon written advice of counsel or accountants, or
upon information provided by persons presenting preferred stock
for deposit, holders of depositary receipts or other persons
believed to be competent and on documents believed to be genuine.
Resignation and
removal of depositary
The depositary may resign at any time by delivering notice to us
of its election to do so, and we may at any time remove the
depositary. Any such resignation or removal will take effect
upon the appointment of a successor depositary and its
acceptance of such appointment. Such successor depositary must
be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company
having its principal office in the United States and meeting
certain combined capital surplus requirements.
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Legal
matters
Unless otherwise indicated in the applicable prospectus
supplement, the validity of the securities offered under this
prospectus will be passed upon for us by Akin Gump Strauss
Hauer & Feld LLP. Additional legal matters may be
passed on for us, or any underwriters, dealers or agents, by
counsel we will name in the applicable prospectus supplement.
Experts
The consolidated financial statements of Anadarko Petroleum
Corporation and subsidiaries as of December 31, 2008 and
2007, and for each of the years in the three-year period ended
December 31, 2008, and managements assessment of the
effectiveness of internal control over financial reporting as of
December 31, 2008 have been incorporated by reference
herein in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing.
Certain information with respect to the oil and gas reserves
associated with Anadarkos oil and gas prospects is
confirmed in the procedures and methods review letter of Miller
and Lents, Ltd., an independent petroleum consulting firm, and
has been incorporated by reference into this document, upon the
authority of said firm as experts with respect to the matters
covered by such procedures and methods review letter and in
giving such procedures and methods review letter.
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