Anadarko Petroleum (APC)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Year Ended December 31, 2005

Commission File No. 1-8968

ANADARKO PETROLEUM CORPORATION

1201 Lake Robbins Drive, The Woodlands, Texas 77380-1046

(832) 636-1000

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $0.10 per share

Preferred Stock Purchase Rights

The above Securities are listed on the New York Stock Exchange.

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ü      No           .

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes                No  ü .

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes  ü      No           .

     Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.           .

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer  ü Accelerated filer            Non-accelerated filer           .

     Indicate by check mark whether the registrant is a shell company.     Yes                No  ü .

     The aggregate market value of the Company’s common stock held by non-affiliates of the registrant on June 30, 2005 was $19.4 billion based on the average bid and asked price as reported on the New York Stock Exchange.

     The number of shares outstanding of the Company’s common stock as of January 31, 2006 is shown below:

TABLE OF CONTENTS

PART I

General

      Anadarko Petroleum Corporation is among the largest independent oil and gas exploration and production companies in the world, with 2.45 billion barrels of oil equivalent (BOE) of proved reserves as of December 31, 2005. The Company’s major areas of operations are located in the United States, primarily in Texas, Louisiana, the mid-continent region and the western states, Alaska and in the deepwaters of the Gulf of Mexico, as well as in Canada and Algeria. Anadarko also has production in Venezuela and Qatar and is executing strategic exploration programs in several other countries. The Company actively markets natural gas, oil and natural gas liquids (NGLs) and owns and operates gas gathering systems in its core producing areas. In addition, the Company engages in the hard minerals business 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 where the Company owns most of its fee mineral rights. Anadarko is committed to minimizing the environmental impact of exploration and production activities in its worldwide operations through programs such as carbon dioxide (CO₂) sequestration and the reduction of surface area used for production facilities.

      Unless the context otherwise requires, the terms “Anadarko” or “Company” refer to Anadarko Petroleum Corporation and its subsidiaries. The Company’s corporate headquarters are located at 1201 Lake Robbins Drive, The Woodlands, Texas 77380, where the telephone number is (832) 636-1000.

Available Information The Company files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, registration statements and other items with the Securities and Exchange Commission (SEC). Anadarko provides access free of charge to all of these SEC filings, as soon as reasonably practicable after filing, on its internet site located at www.anadarko.com. The Company will also make available to any stockholder, without charge, copies of its Annual Report on Form 10-K as filed with the SEC. For copies of this, or any other filings, please contact: Anadarko Petroleum Corporation, Public Affairs Department, P.O. Box 1330, Houston, Texas 77251-1330 or call (832) 636-1219.

      In addition, the public may read and copy any materials Anadarko files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. The public may obtain information on the operation of the 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.

Oil and Gas Properties and Activities

Proved Reserves

      As of December 31, 2005, Anadarko had proved reserves of 7.9 trillion cubic feet (Tcf) of natural gas and 1.1 billion barrels of crude oil, condensate and NGLs. Combined, these proved reserves are equivalent to 2.45 billion barrels of oil or 14.7 Tcf of gas. During 2005, the Company’s reserves increased 3% due to successful exploration and development drilling in the deepwater Gulf of Mexico, onshore United States and Canada. The Company’s reserves have grown 5% over the past three years primarily due to successful exploration and development drilling in the United States and Canada, partially offset by the effect of the disposition of non-core producing properties during 2004. As of December 31, 2005, Anadarko had proved developed reserves of 5.6 Tcf of natural gas and 594 million barrels (MMBbls) of crude oil, condensate and NGLs. Proved developed reserves comprise 62% of total proved reserves.

      Proved reserve estimates are made by the Company’s engineers. The procedures and controls used by Anadarko in preparing its estimates of proved reserves, as of December 31, 2005, were examined by Netherland, Sewell & Associates, Inc. (NSAI), an independent worldwide petroleum consultant. NSAI reviewed fields comprising 90% of the Company’s total proved reserves, and based on those reviews and investigative analysis, conducted substantive testing on 29% of the Company’s total proved reserves.

      NSAI was able to determine that Anadarko’s estimates of proved oil and gas reserves are, in the aggregate, reasonable and have been prepared in accordance with generally accepted petroleum engineering and evaluation principles in conformity with SEC definitions and guidelines. It should be understood that NSAI’s examination of Anadarko’s oil and gas properties does not constitute a complete reserve study or one of NSAI’s traditional audits. NSAI’s examination consisted of: (1) a review and verification of the internal reserve management and control systems; (2) a series of reviews with each of the asset teams to investigate conformance with SEC definitions and guidelines; and, (3) substantive testing of the reserve estimates, including a detailed evaluation and comparison of the estimates for certain properties.

      Anadarko’s internal controls over reserve additions include using a corporate review team comprised of five technical experts: four members from within Anadarko, who are independent of the operating groups responsible for the reserve estimates, and a member from NSAI. Through participation on the team, NSAI reviewed 79% of the Company’s 2005 proved reserve additions. A copy of the NSAI report is attached as Exhibit 99.1 of this Form 10-K.

      The Company’s estimates of proved reserves, proved developed reserves and proved undeveloped reserves at December 31, 2005, 2004 and 2003 and changes in proved reserves during the last three years are contained in the Supplemental Information on Oil and Gas Exploration and Production Activities — Unaudited (Supplemental Information) in the Anadarko Petroleum Corporation 2005 Consolidated Financial Statements (Consolidated Financial Statements) under Item 8 of this Form 10-K. The Company files annual estimates of certain proved oil and gas reserves with the U.S. Department of Energy (DOE), which are within 5% of the amounts included in the above estimates.

      Also contained in the Supplemental Information in the Consolidated Financial Statements are the Company’s estimates of future net cash flows and discounted future net cash flows from proved reserves. See Operating Results and Critical Accounting Policies and Estimates under Item 7 of this Form 10-K for additional information on the Company’s proved reserves.

Sales Volumes and Prices

      The following table shows the Company’s annual sales volumes. Volumes for natural gas are in billion cubic feet (Bcf) at a pressure base of 14.73 pounds per square inch. For the computation of million barrels of oil equivalent (MMBOE), six thousand cubic feet (Mcf) of gas is the energy equivalent of one barrel of oil, condensate or NGLs.

      In late 2004, Anadarko completed over $3 billion in pretax asset sales of certain non-core properties through a series of unrelated transactions. Combined, the divested properties represented about 20% of 2004 oil and gas production and about 11% of Anadarko’s year-end 2003 proved reserves. The Company used proceeds from these asset sales to reduce debt, repurchase Anadarko common stock and otherwise to have funds available for reinvestment in other strategic options.

      The following table shows the Company’s annual average sales prices and average production costs. The average sales prices include realized and certain unrealized gains and losses for derivative instruments the Company utilizes to manage price risk related to the Company’s sales volumes. Production costs are costs incurred to operate and maintain the Company’s wells and related equipment and include cost of labor, well service and repair, location maintenance, power and fuel, transportation, cost of product, property taxes, production and severance taxes and production related general and administrative costs. Certain amounts for prior years have been reclassified to conform to the current presentation. Additional information on volumes, prices and markets is contained in Financial Results and Marketing Strategies under Item 7 of this Form 10-K. Additional detail of production costs is contained in the Supplemental Information under Item 8 of this Form 10-K. Information on major customers is contained in Note 13 of the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Properties and Activities — United States

Overview Anadarko’s active areas in the United States include the Lower 48 states, Alaska and the Gulf of Mexico. Reserves in the United States comprised 74% of Anadarko’s total proved reserves at year-end 2005. During 2005, the Company’s drilling efforts in the United States resulted in 531 gas wells, 119 oil wells and 5 dry holes. The accompanying maps illustrate by state Anadarko’s net undeveloped and developed lease and fee mineral acreage, number of net producing wells and other data relevant to its domestic onshore and offshore oil and gas operations.

      The following table presents selected 2005 U.S. operating data by area.

Onshore — Lower 48 States At the end of 2005, about 60% of the Company’s proved reserves were located onshore in the Lower 48 states. The Company’s 2006 capital budget for this area is about $2 billion and is expected to largely focus on unconventional tight gas plays throughout the region.

North Louisiana The Company’s tight gas drilling program in the Vernon and Ansley areas are focused on development drilling with an increased effort on extending field boundaries. Additionally, a pilot program is underway to test for increased infill drilling opportunities. The Company also has tight gas exploration programs underway in north Louisiana and is encouraged by preliminary results in the Vixen and Liberty Hills prospect areas.

East Texas Development drilling and field extension of the Dowdy Ranch, Dew/ Mimms Creek, Bald Prairie and Marquez fields are the primary focus in the east Texas tight gas Bossier play. Anadarko also continues to be active in its Cotton Valley infill drilling program in the Carthage area.

Central Texas Anadarko’s horizontal drilling program continues to be the focus in central Texas where the objective is to exploit the multiple pay zones and extend field boundaries in the Austin Chalk formation of the Giddings and Brookeland fields. In addition, a successful re-entry program is in place. Anadarko’s exploration activities in the area are currently evaluating the potential of the deep Bossier and Woodbine formations.

West Texas Operations in west Texas are concentrated on increasing production and reserves in the tight gas play of the Haley field where early activity levels and performance is ramping up at a pace comparable to what was achieved in the Company’s two largest domestic gas fields, the Bossier and Vernon. The Company’s efforts also include continued development in the Ozona field and waterflood projects in the Permian basin.

Mid-Continent The Company’s operations in the mid-continent continue to focus on production and development of its long-life, high-margin assets in the Hugoton and Golden Trend fields as well as enhanced oil recovery (EOR) activities in the Norge Marchand field.

Onshore US map

Western States The majority of the activity in the western states area is associated with developing conventional reservoirs, tight gas, coalbed methane (CBM) and EOR projects. Increased activity is expected in Wamsutter, among other areas in the Land Grant, where the Company’s non-operated positions benefit from net revenue interests greater than its working interest due to Anadarko’s additional royalty interest. The Company operates multiple full-scale CBM properties, as well as active pilot programs. The Company’s operations at the Salt Creek, Monell and Sussex EOR projects (98%-100% working interest (WI)) in Wyoming continue to demonstrate year-over-year increases in oil response due to CO₂ injection.

Alaska Anadarko’s activity in Alaska is concentrated primarily on the North Slope. About 3% of the Company’s proved reserves at year-end 2005 were in Alaska. The Company’s capital budget is expected to be about $70 million for Alaska in 2006, which will focus primarily on development activities and preparation for future exploration.

      At the Alpine field (22% WI) on Alaska’s North Slope, a capacity expansion project was completed in 2005 that increased capacity of the Alpine oil processing facility to 140 MBbls/d gross.

      Development of the Nanuq and Fiord satellite fields (both 22% WI) is underway. First production is scheduled for late 2006, with expected peak production of approximately 35 MBbls/d in 2008. Anadarko and the operator are continuing to pursue the state, local and federal permits for three additional Alpine satellites. During the 2004-2005 winter drilling season, the Company participated in exploration wells located in the National Petroleum Reserve-Alaska. Commerciality and potential development scenarios are currently being evaluated.

Gulf of Mexico At year-end 2005, about 11% of the Company’s proved reserves were located offshore in the deepwater of the Gulf of Mexico where Anadarko owns an average 71% interest in 231 blocks and has access to an additional 33 blocks through participation agreements. Anadarko has budgeted about $850 million for capital spending in the deepwater Gulf of Mexico for 2006. In the eastern Gulf of Mexico, facilities will be installed to link several Anadarko-operated natural gas discoveries with the Independence Hub. In the central Gulf of Mexico, the Company expects to bring several high-volume wells on-line at the Marco Polo hub facility and participate in exploration or delineation wells in the foldbelt area.

      Anadarko operates, and a third party owns, the platform and production facilities for the Marco Polo (100% WI) deepwater development project. During 2005, the K2 (52.5% WI) and K2 North (100% WI) fields were tied back subsea to the Marco Polo platform. Production from the K2 field began in 2005. Due to the active 2005 hurricane season, production startup at the K2 North field was delayed several months to January 2006.

      Development plans for a gas processing hub, Independence Hub, and gas export pipeline in the eastern Gulf of Mexico were approved in late 2004. The Company, along with a group of other producers, contracted with a third party to design, construct and own the facility. Anadarko will operate Independence Hub. The facility, capable of processing 1 Bcf of gas per day, will serve several ultra-deepwater natural gas fields, including seven discoveries operated by Anadarko. During 2006, the Company plans to install subsea infrastructure and start the downhole completion phase of previously drilled and suspended wells. Production from Independence Hub is expected to commence in the second half of 2007.

      Anadarko has participation agreements to explore deepwater blocks in the central and western Gulf of Mexico. Anadarko’s exploration program in this area is currently focused on the extensive middle-to-lower Miocene play within the foldbelt area. During 2005, the Company was successful in three out of four exploration wells in this play. The Knotty Head (25% WI) and Big Foot (15% WI) discoveries are outside operated. The Company-operated Genghis Khan (100% WI) discovery and appraisal well is expected to be tied into the Marco Polo complex and on production by the end of 2006. Anadarko expects to remain very active in the region in 2006.

Gas Processing The Company processes gas at various third-party plants under agreements generally structured to provide for the extraction and sale of NGLs in cost efficient plants with flexible volume commitments. The Company has agreements with eight plants in Texas, four plants in the western states area, five plants in the mid-continent area and one plant in the gulf coast area. Anadarko also processes gas and has interests in two Company-operated plants in the western states. Anadarko’s strategy to aggregate gas through Company-owned and third-party gathering systems allows Anadarko to secure processing arrangements in each of the regions where the Company has significant production.

Offshore map

Properties and Activities — Canada

Overview At the end of 2005, about 11% of the Company’s proved reserves were located in Canada. In 2005, net sales volumes from the Company’s properties in Canada accounted for 13% of the Company’s total sales volumes. During 2005, drilling activity in Canada included 40 exploration wells with a success rate of 85% and 108 development wells with a success rate of 98%. The Company’s 2006 capital budget for Canada is expected to be about $450 million and is allocated about 70% to development and 30% to exploration activity. The accompanying map illustrates the Company’s net developed and undeveloped lease and fee mineral acreage, number of net producing wells and other data relevant to its Canadian properties.

Fort St. John During 2005, additional compression was added, increasing capacity in the Buckinghorse area where the Company continues to pursue multi-zone, deep natural gas targets in the area. Anadarko also continues to increase its land holdings in the Buckinghorse and Adsett areas of British Columbia where it holds approximately 1 million net acres.

Grande Prairie In the Peace River Arch area of Northern Alberta, the Company continues to have exploration success in a number of conventional gas plays. In addition, an evolving unconventional gas project is expected to provide future growth opportunity. The Company also has the benefit of operating two gas plants in the region.

Edson The Wild River/ Cecilia drilling program continues to be the most active development area for the Company in Canada. Wild River represents about 30% of Anadarko’s Canadian production and reserve base. This multi-zone area is expected to continue to provide growth opportunities in 2006. Additionally in central Alberta, the Company is evaluating a portion of its acreage for CBM production potential.

Medicine Hat In southern Alberta, Anadarko continues to develop a CO₂ pilot project near the Company’s Hays gas plant. In southwest Saskatchewan, the Company began the second of three phases of its 115-well Crane Lake North shallow gas program. With use of new drilling and completion technologies, this mature area continues to provide steady production and exploitation opportunities that can be brought on-line quickly.

Other In the Mackenzie Delta, Anadarko continues its evaluation of encouraging Burnt Lake discoveries on Block EL-384. The Company is closely monitoring development related to the Mackenzie Valley pipeline.

Properties and Activities — Algeria

Overview Anadarko is engaged in exploration, development and production activities in Algeria’s Sahara Desert. At the end of 2005, about 13% of the Company’s proved reserves were located in Algeria where a total of eight fields discovered by the Company were on production. In 2005, net sales volumes from the Company’s properties in Algeria represented 15% of the Company’s total sales volumes. In 2005, Anadarko participated in 20 wells with a success rate of 90%. In addition, the Company participated in nine injection or service wells during the year. The Company’s 2006 capital budget for Algeria is expected to be about $130 million and the budget provides for drilling about 30 development and service wells and four exploration wells, as well as engineering design for a production facility on Block 208.

Contracts and Partners Anadarko’s interest in the Production Sharing Agreement (PSA) for Blocks 404, 208 and 211 is 50% before participation at the exploitation stage by Sonatrach, the national oil and gas enterprise of Algeria. The Company has two partners, each with a 25% interest, also prior to participation by Sonatrach. Under the terms of the PSA, oil reserves that are discovered, developed and produced are shared by Sonatrach, Anadarko and its two partners. Sonatrach is responsible for 51% of the development and production costs. Anadarko and its partners also have an exploration program underway on Blocks 404, 208 and 211 and have exploration licenses, under separate PSAs, for Block 406b (60% interest) and Block 403c/e (33% interest). Anadarko and its joint venture partners fund Sonatrach’s share of exploration costs and are entitled to recover these exploration costs out of production in the exploitation phase.

Canada map

Production and Development On Block 404, production from the HBNS field averaged 125 MBbls/d of oil (gross) and production from five of the satellite fields averaged 31 MBbls/d of oil (gross) in 2005. Production from the HBN field, which extends from Block 404 into Block 403 and is unitized with other companies, averaged 77 MBbls/d of oil (gross) in 2005. Anadarko is also actively involved in the unitized Ourhoud field which is located in the southern portion of Block 404 and extends into Block 406a and Block 405. Production from the Ourhoud field averaged 224 MBbls/d of oil (gross) in 2005. Anadarko has several fields farther south on Block 208. Development of the Block 208 fields is progressing and the new facility is expected to be operational in late 2008 with over 150 MBbls/d of oil production capacity.

Exploration During 2005, the Company participated in two exploration wells on Block 404, one of which was successful. Anadarko’s first exploration well in Block 403c/e was drilled in 2005 and is currently pending testing. During 2006, the Company plans to continue exploratory drilling on Blocks 404 and 406b and evaluate the prospect on Block 403c/e for commerciality.

      Anadarko continually monitors the political situation in Algeria and has taken steps to help ensure the safety of employees and the security of its facilities in the remote regions of the Sahara Desert. Anadarko is unable to predict with certainty any effect political events may have on activity planned for 2006 and beyond. However, no material effect has been experienced to date on the Company’s operations in Algeria, where the Company has had activities since 1989.

Properties and Activities — Other International

Overview The Company’s other international oil and gas production and development operations are located primarily in Venezuela and Qatar. The Company has exploration acreage in Qatar, Indonesia and other selected areas. About 2% of the Company’s total proved reserves were located in other international locations at year-end 2005. During 2005, net sales volumes from the Company’s other international properties accounted for 5% of the Company’s total volumes. In 2006, the Company’s capital budget is expected to range from $200 million to $250 million for other international projects and provides for drilling about 20 development and 20 exploration wells.

Venezuela The Company’s operations consist of the Oritupano-Leona contract area, in which the Company has a non-operated 45% participating interest. The Company’s net oil sales volumes from this 395,000 acre area totaled 5 MMBbls during 2005. The development program in 2005 included drilling ten wells with a 100% success rate and workover activity.

      Anadarko’s operations in Venezuela have been governed by an Operating Service Agreement (OSA) that was entered into between the Company and an affiliate of Petroleos de Venezuela, S.A. (PDVSA), the national oil company of Venezuela. In accordance with the 2005 announcement by the Venezuelan Ministry of Energy and Petroleum, the OSA is under renegotiation. The Company and its operating partner, Petrobras Energia Venezuela (Petrobras), recently signed a Transitory Agreement with PDVSA. For additional information see Other Developments under Item 7 of this Form 10-K.

Qatar The Company had interests in 1,549,000 undeveloped lease acres and 19,000 developed acres in Qatar at year-end 2005. Anadarko is the operator and has a 92.5% interest in the Al Rayyan field, which is part of an Exploration and Production Sharing Agreement covering Blocks 12 and 13. Production from the Al Rayyan field, located on Block 12, totaled 3 MMBbls of oil (net) in 2005. An exploration well is scheduled for 2006 in offshore Block 13, which will be the first well drilled in this block. In Block 4 (100% interest), the Company plans to acquire seismic data in 2006 as partial fulfillment of an exploration work program. Anadarko also has a non-operated interest in an Exploration and Production Sharing Agreement covering offshore Block 11 (49% interest). The exploration period for Block 11 has recently been extended until 2007 to evaluate the commerciality of a prospect drilled on the block in 2005 and to further assess exploration potential.

Indonesia In 2005, Anadarko entered into an outside operated exploration joint venture agreement, under which the Company gained access to 12 Production Sharing Contracts (PSCs) covering about 7,400,000 gross acres onshore and offshore Indonesia. Anadarko has committed to a three-year, $80 million work program to fund exploration activities. The Company has the opportunity to earn up to a 40% interest in each of the PSCs where a successful exploration well is drilled and upon the approval of a plan of development. In 2004, the Company entered into a PSC for exploration and production rights to the nearly 1,000,000 acre North East Madura III Block (100% interest) offshore Indonesia. Under the terms of the PSC, Anadarko will undertake a three-year exploration phase. Anadarko has purchased 3-D seismic data and plans to drill up to four wells on this block in 2006.

Other Anadarko also has active exploration projects in Tunisia and West Africa, as well as activities in other potential new venture areas overseas.

Drilling Programs

      The Company’s 2005 drilling program focused on known oil and gas provinces in the United States (Lower 48, Alaska and Gulf of Mexico), Canada and Algeria. Exploration activity consisted of 67 wells, including 13 wells in the Lower 48, three wells in Alaska, eight wells offshore in the Gulf of Mexico, 40 wells in Canada, two wells in Algeria and one well in other international locations. Development activity consisted of 769 wells, which included 624 wells in the Lower 48, four wells in Alaska, three wells offshore in the Gulf of Mexico, 108 wells in Canada, 18 wells in Algeria and 12 wells in other international locations.

Drilling Statistics

      The following table shows the results of the oil and gas wells drilled and tested:

      The following table shows the number of wells in the process of drilling or in active completion stages and the number of wells suspended or waiting on completion as of December 31, 2005:

Productive Wells

      As of December 31, 2005, the Company had a working interest ownership in productive wells as follows:

Properties and Leases

      The following schedule shows the number of developed lease, undeveloped lease and fee mineral acres in which Anadarko held interests at December 31, 2005:

Marketing, Gathering and Liquefied Natural Gas Properties and Activities

Marketing The Company’s marketing department actively manages the sales of its natural gas, crude oil and NGLs. The Company markets its production to customers at competitive prices, attempting to maximize realized prices while managing credit exposure. The Company also purchases natural gas, crude oil and NGLs volumes for resale primarily from partners and producers near Anadarko’s production. These purchases allow the Company to aggregate larger volumes and attract larger, creditworthy customers, which allows the Company to seek to maximize prices received for the Company’s production.

      The Company sells natural gas under a variety of contracts and may also receive a service fee related to the level of reliability and service required by the customer. The Company has the marketing capability to move large volumes of gas into and out of the “daily” gas market to take advantage of any price volatility. The Company may also engage in trading activities for the purpose of generating profits from exposure to changes in market prices of natural gas, crude oil, condensate and NGLs. The Company’s marketing strategy includes the use of leased natural gas storage facilities and various derivative instruments. However, the Company does not engage in market-making practices nor does it trade in any non-energy-related commodities. The Company’s marketing function does not participate in any energy marketing-related partnerships.

Gas Gathering Anadarko owns and operates seven major gas gathering systems in the United States, where the Company has substantial gas production. The systems are: Antioch Gathering System in the Southwest Antioch field of Oklahoma; Hugoton Gathering System in southwest Kansas; Haley Gathering System in west Texas; Dew Gathering System in east Texas; Pinnacle Gathering System in east Texas; CJV/ SEC Gathering System in the Carthage field of east Texas; and, Vernon Gathering System in the Vernon field of north Louisiana.

      The Company’s major gathering systems have nearly 3,000 miles of pipeline connecting about 3,500 wells and averaged over 950 MMcf/d of gas throughput in 2005. In addition, Anadarko operates numerous other smaller gas gathering systems.

Liquefied Natural Gas The Company is constructing a liquefied natural gas (LNG) receiving terminal at Bear Head, Point Tupper in Nova Scotia. The Bear Head facility is expected to give Anadarko leverage to negotiate for stranded gas production and marketing opportunities from national oil companies and other parties by offering them access to premium North American gas markets. Provincial and federal permits have been obtained including environmental assessments, navigable waters authorization and the LNG tank foundation permit. Front-end engineering design has been completed for a terminal capable of processing up to 1 Bcf per day of regasified LNG.

      During 2005, construction planning, site preparation and tank foundation work progressed. In addition, contracts were executed for construction of the two LNG storage tanks and the marine jetty. The Company may award an engineering, procurement and construction contract in 2006 with commercial operations expected to commence in late 2008 or 2009. During 2005, Anadarko entered into precedent agreements with a third-party transporter in order to secure long-term delivery of natural gas from the Bear Head facility to prospective markets in eastern Canada and the northeastern United States. The Company continues to hold discussions with several parties for long-term supply. For additional information see Obligations and Commitments under Item 7 of this Form 10-K.

Minerals Properties and Activities

      The Company’s minerals properties contribute to operating income through non-operated joint venture and royalty arrangements in coal, trona and industrial mineral mines across the Company’s extensive fee mineral interest in the Land Grant. The Company reinvests the cash flow from its hard minerals operations primarily into its oil and gas operations.

      The Company’s low sulfur coal deposits, located primarily in southern Wyoming, compete with other western coal producers for industrial and utility boiler markets, which burn the coal to produce steam used to generate electricity. The Company’s coal interests use both surface and underground mining methods of extraction. Because of the high extraction and transportation costs, additional development of the Company’s reserves is dependent on increased coal usage in local markets. In addition to fee mineral ownership of and royalty interests in coal reserves, the Company owns a 50% non-operating interest in Black Butte Coal Company. Black Butte Coal Company produces approximately 3 million tons of coal per year.

      The world’s largest known deposit of trona, comprising 90% of the world’s trona resources, is located in the Green River basin in southwestern Wyoming. Natural soda ash, which is produced by refining trona ore, is used primarily in the production of glass, in the paper and water treatment industries and in the manufacturing of certain chemicals and detergents. The Company owns interests in lands containing approximately 50% of these reserves and has leased a portion of those lands to companies that mine and refine trona. In addition to fee mineral ownership of and royalty interest in trona reserves, the Company owns a 49% non-operating interest in the OCI Wyoming LP (OCI) soda ash refining facility near Green River, Wyoming. The OCI facility typically produces about 2 million tons of soda ash per year.

      During 2004, the Company entered into an agreement whereby it sold a portion of its future royalties associated with existing coal and trona leases to a third party for $158 million, net of transaction costs. The Company conveyed a limited-term nonparticipating royalty interest, which was carved out of its royalty interests, that entitles the third party to receive certain amounts in future coal and trona royalty revenue over an 11-year period. For additional information, see Note 8 — Sale of Future Hard Minerals Royalty Revenues of the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Segment and Geographic Information

      Information on operations by segment and geographic location is contained in Note 14 of the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

Employees

      As of December 31, 2005, the Company had about 3,300 employees. Anadarko considers its relations with its employees to be satisfactory. The Company has had no significant work stoppages or strikes pertaining to its employees.

Regulatory Matters and Additional Factors Affecting Business

      See Risk Factors under Item 1a of this Form 10-K.

Title to Properties

      As is customary in the oil and gas industry, only a preliminary title review is conducted at the time properties believed to be suitable for drilling operations are acquired by the Company. Prior to the commencement of drilling operations, a thorough title examination of the drill site tract is conducted and curative work is performed with respect to significant defects, if any, before proceeding with operations. Anadarko believes the title to its leasehold properties is good and defensible in accordance with standards generally acceptable in the oil and gas industry subject to such exceptions that, in the opinion of counsel employed in the various areas in which the Company has conducted exploration activities, are not so material as to detract substantially from the use of such properties.

      The leasehold properties owned by the Company are subject to royalty, overriding royalty and other outstanding interests customary in the industry. The properties may be subject to burdens such as liens incident to operating agreements and current taxes, development obligations under oil and gas leases and other encumbrances, easements and restrictions. Anadarko does not believe any of these burdens will materially interfere with its use of these properties.

Capital Spending

      See Capital Resources and Liquidity under Item 7 of this Form 10-K.

Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends

      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 before income taxes and fixed charges. 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 for payment.

      Forward Looking Statements The Company has made in this report, and may from time to time otherwise make in other public filings, press releases and discussions with Company management, forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning the Company’s 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, 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 such expressions. For such statements, the Company claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, the Company’s 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 oil, natural gas, natural gas liquids (NGLs) and other products or services, the price of oil, natural gas, NGLs and other products or services, implementation of plans concerning the Bear Head liquefied natural gas facility, 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 the Company or its 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, the securities or capital markets and other factors discussed below and elsewhere in this Form 10-K and in the Company’s other public filings, press releases and discussions with Company management. Anadarko undertakes no obligation to publicly update or revise any forward looking statements.

          Commodity pricing and demand may limit our productivity and profitability.

      Crude oil prices continue to be affected by political developments worldwide, pricing decisions and production quotas of OPEC and the volatile trading patterns in the commodity futures markets. In addition, in OPEC countries in which we have production such as Algeria, Venezuela and Qatar, when the world oil market is weak, we may be subject to periods of decreased production due to government mandated cutbacks. Natural gas prices also continue to be highly volatile. In periods of sharply lower commodity prices, we may curtail production and capital spending projects, as well as delay or defer drilling wells in certain areas because of lower cash flows. Changes in crude oil and natural gas prices can impact our determination of proved reserves and our calculation of the standardized measure of discounted future net cash flows relating to oil and gas reserves. In addition, demand for oil and gas in the United States and worldwide may affect our level of production.

      Under the full cost method of accounting, a noncash charge to earnings related to the carrying value of our oil and gas properties on a country-by-country basis may occur.

      Whether we will be required to take such a charge depends on the prices for crude oil and natural gas at the end of any quarter, as well as the effect of both capital expenditures and changes in proved reserves during that quarter.

      We are subject to complex laws and regulations relating to environmental protection that can adversely affect the cost, manner and feasibility of doing business.

      Our oil and gas operations and properties are subject to numerous federal, state and local laws and regulations relating to environmental protection from the time oil and gas projects commence until abandonment. These laws and regulations govern, among other things:

      In addition, these laws and regulations may impose substantial liabilities for our failure to comply with them or for any contamination resulting from our operations. For a description of certain environmental proceedings in which we are involved, see Legal Proceedings under Item 3 of this Form 10-K.

      We may not be insured against all of the operating risks to which our business is exposed.

      Our business is subject to all of the operating risks normally associated with the exploration for and production of oil and gas, including blowouts, cratering and fire, any of which could result in damage to, or destruction of, oil and gas wells or formations or production facilities and other property and injury to persons. As protection against financial loss resulting from these operating hazards, we maintain insurance coverage, including certain physical damage, employer’s liability, comprehensive general liability and worker’s compensa-

tion insurance. However, we are not fully insured against all risks in all aspects of our business, such as political risk, business interruption risk and risk of major terrorist attacks. The occurrence of a significant event against which we are not fully insured could have a material adverse effect on our financial position.

      Material differences between the estimated and actual timing of critical events may affect the completion of and commencement of production from development projects.

      We are involved in several large development projects. Key factors that may affect the timing and outcome of such projects include:

      Delays and differences between estimated and actual timing of critical events may affect the forward looking statements related to large development projects.

      Our domestic operations are subject to governmental risks that may impact our operations.

      Our domestic operations have been, and at times in the future may be, affected by political developments and by federal, state and local laws and regulations such as restrictions on production, changes in taxes, royalties and other amounts payable to governments or governmental agencies, price or gathering rate controls and environmental protection regulations.

      We operate in other countries and are subject to political, economic and other uncertainties.

      Our operations in areas outside the United States are subject to various risks inherent in foreign operations. These risks may include, among other things:

      Our international operations may also be adversely affected by laws and policies of the United States affecting foreign trade and taxation.

      The oil and gas exploration and production industry is very competitive, and some of our exploration and production competitors have greater financial and other resources than we do.

      The oil and gas business is highly competitive in the search for and acquisition of reserves and in the gathering and marketing of oil and gas production. Our competitors include major oil and gas companies, independent oil and gas companies, individual producers, gas marketers and major pipeline companies, as well as participants in other industries supplying energy and fuel to industrial, commercial and individual consumers. Some of our competitors may have greater and more diverse resources upon which to draw than we do. If we are not successful in our competition for oil and gas reserves or in our marketing of production, our financial condition and results of operations may be adversely affected.

      Our commodity hedging and trading activities may prevent us from benefiting fully from price increases and may expose us to other risks.

      To the extent that we engage in hedging activities to endeavor to protect ourselves from commodity price volatility, we may be prevented from realizing the full benefits of price increases above the levels of the hedges. In addition, we engage in speculative trading in hydrocarbon commodities, which subjects us to additional risk.

      Our drilling activities may not be productive.

      Drilling for oil and gas involves numerous risks, including the risk that we will not encounter commercially productive oil or gas reservoirs. The costs of drilling, completing and operating wells are often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:

      Certain of our future drilling activities may not be successful and, if unsuccessful, this failure could have an adverse effect on our future results of operations and financial condition. While all drilling, whether developmental or exploratory, involves these risks, exploratory drilling involves greater risks of dry holes or failure to find commercial quantities of hydrocarbons. Because of the percentage of our capital budget devoted to higher-risk exploratory projects, it is likely that we will continue to experience significant exploration and dry hole expenses.

      We are vulnerable to risks associated with operating in the Gulf of Mexico that could negatively impact our operations and financial results.

      Our operations and financial results could be significantly impacted by conditions in the Gulf of Mexico because we explore and produce extensively in that area. As a result of this activity, we are vulnerable to the risks associated with operating in the Gulf of Mexico, including those relating to:

      In addition, we are currently conducting some of our exploration in the deepwaters (greater than approximately 1,000 feet) of the Gulf of Mexico, where operations are more difficult and costly than in shallower waters. The deepwaters in the Gulf of Mexico lack the physical and oilfield service infrastructure present in its shallower waters. As a result, deepwater operations may require a significant amount of time between a discovery and the time that we can market our production, thereby increasing the risk involved with these operations.

      Further, production of reserves from reservoirs in the Gulf of Mexico generally declines more rapidly than from reservoirs in many other producing regions of the world. This results in recovery of a relatively higher percentage of reserves from properties in the Gulf of Mexico during the initial few years of production, and as a result, our reserve replacement needs from new prospects may be greater there than for our operations elsewhere. Also, our revenues and return on capital will depend significantly on prices prevailing during these relatively short production periods.

      Our proved reserves are estimates. Any material inaccuracies in our reserve estimates or assumptions underlying our reserve estimates could cause the quantities and net present value of our reserves to be overstated or understated.

      There are numerous uncertainties inherent in estimating quantities of proved reserves, including many factors beyond our control that could cause the quantities and net present value of our reserves to be overstated. The reserve information included or incorporated by reference in this report represents estimates prepared by our internal engineers and examined by independent petroleum consultants. Estimation of reserves is not an exact science. Estimates of economically recoverable oil and natural gas reserves and of future net cash flows necessarily depend upon a number of variable factors and assumptions, any of which may cause these estimates to vary considerably from actual results, such as:

      Estimates of reserves based on risk of recovery and estimates of expected future net cash flows prepared or audited by different engineers, or by the same engineers at different times, may vary substantially. Actual production, revenues and expenditures with respect to our reserves will likely vary from estimates, and the variance may be material. The net present values referred to in this report should not be construed as the current market value of the estimated oil and natural gas reserves attributable to our properties. In accordance with SEC requirements, the estimated discounted net cash flows from proved reserves are generally based on prices and costs as of the date of the estimate, whereas actual future prices and costs may be materially higher or lower.

      Failure to replace reserves may negatively affect our business.

      Our future success depends upon our ability to find, develop or acquire additional oil and natural gas reserves that are economically recoverable. Our proved reserves generally decline when reserves are produced, unless we conduct successful exploration or development activities or acquire properties containing proved reserves, or both. We may not be able to find, develop or acquire additional reserves on an economic basis. Furthermore, if oil and natural gas prices increase, our costs for additional reserves could also increase.

      Failure to find a supply source for our Bear Head LNG project could result in losses associated with sunk costs as well as reimbursement fees for certain predevelopment costs associated with termination of the related long-term gas transportation agreements.

      In 2005, the Company entered into precedent agreements with a third party in order to secure delivery of natural gas from the Bear Head facility in Nova Scotia to prospective markets in eastern Canada and the northeastern United States. The precedent agreements contain certain termination rights, including certain rights related to our failure to timely secure an LNG supply for the Bear Head facility. If these agreements are terminated in connection with such a failure to secure supply, then we will be obligated to pay certain reimbursement fees. There are also certain other acquisition costs that may not be recoverable, such as land, construction and permitting fees.

      We have limited control over the activities on properties we do not operate.

      Other companies operate some of the properties in which we have an interest. We have limited ability to influence or control the operation or future development of these non-operated properties or the amount of capital expenditures that we are required to fund with respect to them. Our dependence on the operator and other working interest owners for these projects and our limited ability to influence or control the operation and future development of these properties could materially adversely affect the realization of our targeted returns on capital and lead to unexpected future costs.

      We may reduce or cease to pay dividends on our common stock.

      We can provide no assurance that we will continue to pay dividends at the current rate or at all. The amount of cash dividends, if any, to be paid in the future will depend upon their declaration by our Board of Directors and upon our financial condition, results of operations, cash flow, the levels of our capital and exploration expenditures, our future business prospects and other related matters that our Board of Directors deems relevant.

      Repercussions from terrorist activities or armed conflict could harm our business.

      Terrorist activities, anti-terrorist efforts and other armed conflict involving the United States or its interests abroad may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations. If events of this nature occur and persist, the attendant political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on prevailing oil and natural gas prices and causing a reduction in our revenues. Oil and natural gas production facilities, transportation systems and storage facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if infrastructure integral to our operations is destroyed or damaged by such an attack. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

      Provisions in our corporate documents and Delaware law could delay or prevent a change of control of us, even if that change would be beneficial to our stockholders.

      Our certificate of incorporation and bylaws contain provisions that may make a change of control of us difficult, even if it would be beneficial to our stockholders, including provisions governing the classification, nomination and removal of directors, prohibiting stockholder action by written consent and regulating the ability of our stockholders to bring matters for action before annual stockholder meetings, and the authorization given to our Board of Directors to issue and set the terms of preferred stock.

      In addition, we have adopted a stockholder rights plan, which would cause extreme dilution to any person or group that attempts to acquire a significant interest in us without advance approval of our Board of Directors, while Section 203 of the Delaware General Corporation Law would impose restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock.

      The loss of key members of our management team, or difficulty attracting and retaining experienced technical personnel, could reduce our competitiveness and prospects for future success.

      The successful implementation of our strategies and handling of other issues integral to our future success will depend, in part, on our experienced management team. The loss of key members of our management team, including James T. Hackett, our Chairman, President and Chief Executive Officer, could have an adverse effect on our business. We entered into an employment agreement with Mr. Hackett to secure his employment with us. We do not carry key man insurance. Our exploratory drilling success and the success of other activities integral to our operations will depend, in part, on our ability to attract and retain experienced explorationists, engineers and other professionals. Competition for such professionals is extremely intense. If we cannot retain our technical personnel or attract additional experienced technical personnel, our ability to compete could be harmed.

      The Company has no outstanding or unresolved SEC staff comments.

      Information on Properties is contained in Item 1 of this Form 10-K and in Note 19 — Commitments of the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.

General The Company is a defendant in a number of lawsuits and is involved in governmental proceedings arising in the ordinary course of business, including, but not limited to, royalty claims, contract claims and environmental claims. The Company has also been named as a defendant in various personal injury claims, including claims by employees of third-party contractors alleging exposure to asbestos, silica and benzene while working at refineries located in Texas, California and Oklahoma. Two companies Anadarko acquired in 2000 and 2002 sold the refineries prior to being acquired by Anadarko. While the ultimate outcome and impact on the Company cannot be predicted with certainty, Management believes that the resolution of these proceedings will not have a material adverse effect on the consolidated financial position, results of operations or cash flow of the Company.

Litigation The Company is subject to various claims from its royalty owners in the regular course of business as an oil and gas producer, including disputes regarding measurement, costs and expenses beyond the wellhead and basis for royalty valuations. Among such claims, the Company was named as a defendant in a case styled U.S. of America ex rel. Harold E. Wright v. AGIP Company, et al. (the ”Gas Qui Tam case”) filed in September 2000 in the U.S. District Court for the Eastern District of Texas, Lufkin Division. This lawsuit generally alleges that the Company and 118 other defendants undervalued natural gas in connection with a payment of royalties on production from federal and Indian lands. Based on the Company’s present understanding of these various governmental and False Claims Act proceedings, the Company believes that it has substantial defenses to these claims and intends to vigorously assert such defenses. However, if the Company is found to have violated the Civil False Claims Act, the Company could be subject to a variety of sanctions, including treble damages and substantial monetary fines. All defendants jointly filed a motion to dismiss the action on jurisdictional grounds based on Mr. Wright’s failure to qualify as the original source of the information underlying his fraud claims, and the Company filed additional motions to dismiss on separate grounds. In 2005, the trial court declined an early appeal of its order denying the defendants’ motion to dismiss. Meanwhile, the discovery process is ongoing. The court has set a trial date for fall 2007. Management is unable to determine a reasonable range of loss, if any, related to this matter.

Environmental Matters In December 2003, Anadarko Gathering Company voluntarily disclosed the findings of an internal environmental audit for its facilities in Kansas to the Kansas Department of Health and Environment (KDHE). In April 2005, KDHE submitted to Anadarko a Consent Decree and Final Order (Order) alleging certain violations of the Clean Air Act. The Order included an assessment of a proposed penalty amount of $169,000. Anadarko is in discussions with the KDHE to negotiate the final penalty amount.

      The United States Environmental Protection Agency (EPA) has alleged certain violations of the Clean Water Act with respect to the Company’s offshore operations. The Company met with the EPA and agreed to resolve these allegations through the payment of a $60,000 penalty and a Supplemental Environmental Project (SEP) valued at $50,000. The EPA has approved the Company’s SEP proposal and the Company is in the process of implementing this proposal.

      The EPA and the United States Department of Justice (DOJ) have indicated that they are considering a possible enforcement action under the Clean Water Act and the Oil Pollution Act of 1990 against Howell Petroleum Corporation, one of the Company’s subsidiaries, for spills of produced water and oil from its northern Wyoming operations. Representatives of the Company met with the EPA and DOJ in March 2005 to discuss in detail the facts and circumstances surrounding the spills. The EPA and DOJ have completed their factual investigation. The Company is awaiting a response from the EPA and DOJ and is therefore unable to make a reasonable estimate of potential sanctions related to this matter. However, Anadarko believes that the liability with respect to this matter will not have a material effect on the Company.

Other Matters The Company is subject to other legal proceedings, claims and liabilities which arise in the ordinary course of its business. In the opinion of Anadarko, the liability with respect to these actions will not have a material effect on the Company.

      There were no matters submitted to a vote of security holders during the fourth quarter of 2005.

Executive Officers of the Registrant

      Mr. Hackett was named President and Chief Executive Officer in December 2003 and assumed the additional role of Chairman of the Board in January 2006. Prior to joining Anadarko, he served as President and Chief Operating Officer of Devon Energy Corporation since its merger with Ocean Energy, Inc. in April 2003. Mr. Hackett served as President and Chief Executive Officer of Ocean Energy, Inc. from March 1999 to April 2003 and as Chairman of the Board from January 2000 to April 2003. He served as Chief Executive Officer and President of Seagull Energy Corporation from September 1998 until March 1999 and as Chairman of the Board from January 1999 to March 1999, until its merger with Ocean Energy, Inc.

      Mr. Daniels was named Senior Vice President, Exploration and Production in 2004 and named Vice President, Canada in 2001. Prior to this position, he served in various managerial roles in the Exploration Department for Anadarko Algeria Company, LLC. He has worked for the Company since 1985.

      Mr. Kurz was named Senior Vice President, Marketing and General Manager, U.S. Onshore in 2005. Prior to this position, he served as Vice President, Marketing since 2003 and Manager, Energy Marketing since 2001. He has worked in Anadarko’s marketing department since 2000. Prior to joining the Company, he worked for Vastar Resources in the marketing department since 1995.

      Mr. Pease was named Senior Vice President, Exploration and Production in 2004. Prior to this position, he served as Vice President, U.S. Onshore and Offshore since 2002, Vice President, International and Alaska Operations since September 2001, Vice President, Engineering and Technology since February 2001 and Vice President, Algeria since 1998. He has worked for the Company since 1979.

      Mr. Reeves was named Senior Vice President, Corporate Affairs & Law and Chief Governance Officer in 2004. Prior to joining Anadarko, he served as Executive Vice President, General Counsel and Secretary of Ocean Energy, Inc. and its predecessor companies from 1997 to 2003.

      Mr. Walker was named Senior Vice President, Finance and Chief Financial Officer in September 2005. Prior to joining Anadarko, he served as Managing Director for the Global Energy Group of UBS Investment Bank since 2003 and was President and Chief Financial Officer of 3TEC Energy Corporation from 2000 to 2003. From 1987 to 2000, he worked for Prudential Financial in a variety of merchant banking positions.

      Mr. Bridges was named Vice President, Canada in 2005. Prior to this position he served as General Manager, Canada since 2004, Chief Engineer since 2001 and various other positions since he joined the Company in 1981.

      Mr. Coll was named Vice President, Information Technology Services and Chief Information Officer in 2004. Prior to joining Anadarko, he served as Chief Information Officer and Vice President, Information Management for Devon Energy Corporation from 2003 to 2004, and as Vice President, Operational Planning and Chief Information Officer for Ocean Energy, Inc. and its predecessor companies from 1997 to 2003.

      Ms. Dickey was named Vice President, Controller and Chief Accounting Officer in 2002. Prior to this position, she served as Assistant Controller since 1995. She has worked for the Company since 1978.

      Mr. Gwin was named Vice President, Treasurer in January 2006. Prior to joining Anadarko, he served as Chief Executive Officer of Community Broadband Ventures, LP since November 2004. Prior to this position, he was with Prosoft Learning Corporation, serving as Chairman and Chief Executive Officer since 2002 and Chief Financial Officer since 2000. Prior to this, he held various positions in merchant banking at Prudential Capital, since 1990.

      Mr. Johnson was named Vice President, Human Resources in October 2005. Prior to joining Anadarko, he served as Senior Vice President of Human Resources and Shared Services for CenterPoint Energy since 2000. Prior to this position, he held various positions at Dow Chemical Company.

      Mr. Larson was named Vice President, Investor Relations and Financial Planning in 2005. Prior to this position, he served as Vice President, Investor Relations since 2003 and Manager, Investor Relations since 2000. He worked in the investor relations and other departments at Union Pacific Resources Group Inc. since 1983.

      Mr. Pensabene was named Vice President, Government Relations when he joined the Company in 1997.

      Mr. Richey was named Vice President, Corporate Development in January 2006. Prior to this position, he was Vice President and Treasurer since 1995. He joined the Company as Treasurer in 1987.

      Ms. Ripley was named Vice President, General Counsel and Corporate Secretary in 2004 and in February 2006 assumed the additional role of Chief Compliance Officer. Prior to this position, she served as Vice President and General Counsel since 2003 and Vice President, General Counsel and Secretary of Anadarko Canada Corporation and its predecessor companies since 1998. She served as Senior Counsel for Norcen Energy Resources Limited since 1997.

      Mr. Willis was named Vice President, Corporate Services in 2000. Prior to this position, he served as Manager, Corporate Administration. He has worked for the Company since 1979.

      Officers of Anadarko are elected at an organizational meeting of the Board of Directors following the annual meeting of stockholders, which is expected to occur on May 11, 2006, and hold office until their successors are duly elected and shall have qualified. There are no family relationships between any directors or executive officers of Anadarko.

PART II

      Information on the market price and cash dividends declared per share of common stock is included in Corporate Information in the Anadarko Petroleum Corporation 2005 Annual Report (Annual Report) which is incorporated herein by reference.

      As of January 31, 2006, there were approximately 17,000 record holders of Anadarko common stock. The following table sets forth the amount of dividends paid on Anadarko common stock during the two years ended December 31, 2005:

      The amount of future common stock dividends will depend on earnings, financial condition, capital requirements and other factors, and will be determined by the Directors on a quarterly basis. For additional information, see Dividends under Item 7 of this Form 10-K.

Common Stock Repurchase Table The following table sets forth information with respect to repurchases by the Company of its shares of common stock during the fourth quarter of 2005.