HOUSTON, March 2 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC) today announced that it sold 20-year, zero coupon convertible
debentures in a public offering underwritten by Credit Suisse First Boston.
The zero coupon convertible debentures were priced with a yield to maturity of
3.50% and an initial conversion premium of 40% and result in gross proceeds to
the company of approximately $300 million before any exercise of an over-
allotment option.
Each debenture was issued at a price of $499.60 and accrues interest at
3.50 % to reach a principal amount of $1,000 at maturity. Anadarko will pay
no interest prior to maturity, and has the right to call the debentures after
three years for a price equal to the issue price plus accrued interest to the
date of redemption. The debentures are convertible at the option of the
debenture holder into shares of Anadarko stock at a fixed ratio per debenture.
"Today's financing announcement has three distinct advantages for Anadarko
shareholders," said Robert J. Allison, Jr., Anadarko Chairman and CEO. "The
first is that the effective interest rate is lower than a standard debt
financing; this reduces interest expenses and means higher earnings for
Anadarko. The second benefit is that Anadarko does not pay interest prior to
maturity, but accrues this for future payment; this conserves more than
$20 million in cash annually compared to the Company's current average debt
cost. The third benefit is that this financing, together with internally-
generated funds, should give us all the necessary capital we need to execute
our $766 million capital spending budget for 2000."
Allison added, "Over the past several years, as our stockholders are
aware, we have outspent cash flow in order to develop our recent discoveries
and stay active in exploration. We believe that 2000 will be the last year of
this deficit spending plan. By 2001 we expect spending to match cash flow and
by 2002 should be creating significant levels of free cash flow."
Anadarko is moving ahead with a number of important exploration drilling
and development projects that should make 2000 the 19th consecutive year of
reserve growth at low finding costs.
Drilling is now underway on the North Slope of Alaska, in the Bossier Play
and in the Gulf of Mexico sub-salt. Additionally, the company should soon
begin drilling a deepwater prospect in the Gulf of Mexico. Internationally,
Anadarko expects to spud additional exploration wells in Tunisia and the North
Atlantic Margin later this year.
Anadarko also is proceeding with development of the Alpine Field in
Alaska, the HBNS and HBN Fields in Algeria, and the Tanzanite and Hickory sub-
salt discoveries in the Gulf of Mexico.
This is not an offer to sell or a solicitation of an offer to buy these
securities. The securities described in this press release may only be
offered and sold by means of the prospectus and prospectus supplement relating
thereto, copies of which are available from the underwriter listed above.
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
and Exchange Act of 1934. Anadarko believes that its expectations are based
on reasonable assumptions. No assurances, however, can be given that its
goals will be achieved. See Additional Factors Affecting Business in the
Management's Discussion and Analysis (MD&A) included in the company's 1998
Annual Report on Form 10-K.
SOURCE Anadarko Petroleum Corporation
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CONTACT:
analysts and investors, A. Paul Taylor, Jr.,
281-874-3471, or media, Tony Canino, 281-873-3855, both of
Anadarko Petroleum Corporation
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