Anadarko Petroleum (APC)

Litigation.

United States of America and ex rel. Jack J. Grynberg v. Western Gas Resources, Inc., et al., United States District Court, District of Colorado, Civil Action No. 97-D-1427. The Company, along with over 300 other natural gas companies, are defendants in litigation filed on September 30, 1997, in 72 separate actions filed by Mr. Grynberg on behalf of the federal government. The allegations made by Mr. Grynberg are that established gas measurement and royalty calculation practices improperly deprived the federal government of appropriate natural gas royalties and violate 31U.S.C. 3729(a)(7) of the False Claims Act. The cases have been consolidated to the United States District Court for the District of Wyoming. Discovery on the jurisdictional issues is being completed to determine if this matter qualifies as a qui tam, or class, action. The defendants’ joint Motion to Dismiss was argued before a special master on March 17 and 18, 2005 and, as a result thereof, the special master has recommended to the court that claims against several of the defendants, including Western, be dismissed. The recommendation is pending before the court.

Price, et al. v. Gas Pipelines, Western Gas Resources, Inc., et al., District Court, Stevens County, Kansas, Case No. 99-C-30. Western is a defendant in litigation filed on September 23, 1999, along with numerous other natural gas companies, in which Mr. Price is claiming an under measurement of gas and Btu volumes throughout the country. The Company along with other natural gas companies filed a motion to dismiss for failure to state a claim. The court denied these motions to dismiss. The court denied plaintiff’s motion for certification as a class and, in the third quarter of 2003, the plaintiff amended and refiled for certification as a class. On May 12, 2003, Mr. Price filed a further claim, Will Price et al v. Western Gas Resources, Inc. et al., District Court, Stevens County, Kansas, Case No. 03C23, relating to certain matters previously removed from the foregoing action. The Company believes that Mr. Price’s claims are without merit and intends to vigorously contest the allegations in this case.

J.P. Morgan Trust Company, National Association, in its Capacity as Trustee of the FI Liquidating Trust v. Oneok Inc. et al., United States District Court, for the District of Kansas, Case No. 05-2389CM. On October 17, 2005, the plaintiff, in its capacity as the liquidating trustee of the successor in interest to Farmland Industries, Inc., filed an amended complaint joining the Company and other defendants to this action. The complaint claims that the defendants violated the Kansas Restraint of Trade Act by reporting allegedly “misleading or knowingly inaccurate reports concerning trade information” to trade publications that compile and publish indices of natural gas prices for natural gas trading hubs throughout the United States. The complaint asserts that these alleged activities had the effect of increasing prices charged by the defendants for natural gas and preventing full and free competition. The plaintiff seeks to recover damages in the amount of the full consideration of its purchases of natural gas during the time period from January 1, 2000 through December 31, 2001, together with its costs of litigation including attorney’s fees. The Company believes that the claims are without merit and intends to vigorously contest the allegations in this case.

Learjet, Inc., Cross Oil Refining & Marketing, Inc. Topeka Unified School District 501, on Behalf of Themselves and All Other Similarly Situated Direct Purchasers of Natural Gas in the State of Kansas v. Oneok, Inc. et al, In the District Court of Wyandotte County, Kansas, Civil Action No. 05-CV-1500. On November 4, 2005, the plaintiffs, on behalf of themselves and all others similarly situated, filed an amended Petition for Damages, joining the Company and other defendants to this action. The Petition claims that the defendants violated the Kansas Restraint of Trade Act by reporting allegedly “misleading or knowingly inaccurate reports concerning trade information” to trade publications that compile and publish indices of natural gas prices for natural gas trading hubs throughout the United States. The complaint asserts that the allegedly anticompetitive effect of the defendant’s actions was to artificially inflate the prices paid by the plaintiffs for natural gas. The plaintiffs are bringing the action as a class action on behalf of all persons and entities in Kansas who made direct purchases of natural gas, for their own use and or consumption, during the time period from January 1, 2000 through October 31, 2002. The plaintiffs are seeking judgment for the full consideration of their purchases of natural gas purchased during such time period, together with costs of litigation including attorney’s fees. The Company believes that the claims are without merit and intends to vigorously contest the allegations in this case.

Other Litigation. The Company is involved in various other litigation and administrative proceedings arising in the normal course of business. In the opinion of the Company’s management, any liabilities that may result from these claims will not, individually or in the aggregate, have a material adverse effect on its financial position, results of operations or cash flow.