CORRESP 1 filename1.htm Anadarko Petroleum Corporation 2006 Form 10-K CORRESP

[ANADARKO LETTERHEAD]

 

                            BRUCE W. BUSMIRE
VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER

June 13, 2007

H. Roger Schwall
Assistant Director
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549-7010
Mail Stop 3561

Re:    Anadarko Petroleum Corporation
         Form 10-K for the Fiscal Year Ended December 31, 2006
         File No. 001-08968

Dear Mr. Schwall:

       We are providing the following responses to the comment letters dated April 23, 2007 and June 4, 2007 from the staff of the Securities and Exchange Commission (the "SEC") regarding our Form 10-K for the fiscal year ended December 31, 2006 (our "Form 10-K"). The following responses are keyed to the staff's comments. All page numbers in our responses refer to our Form 10-K.

       Based on our review of the staff comment letters, and as further described herein, we believe that our Form 10-K is not materially inaccurate or misleading and, therefore, believe that amendment of our existing filing is not necessary. Instead, as indicated in our responses below, we propose to make appropriate clarifications or modifications to our disclosures in future filings.

       We acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in our Form 10-K; staff comments or changes to disclosure in response to staff comments do not foreclose the SEC from taking any action with respect to the filing; and the Company may not assert staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.

Form 10-K for the Fiscal Year Ended December 31, 2006

Engineering Comment

1.  We have reviewed your response to comment 10 of our letter dated March 22, 2007. With regard to your reserves and the nature of your interest, acreage information by state is not sufficient to describe the nature of your interest in individual fields. Nature of your interest is meant to be your working and net ownership interest in a given property. Your reserve information appears to be limited to your total proved reserves in tables for the United States and Algeria or for broad geographic areas such as the Rocky Mountains or Gulf of Mexico. We believe the intent of Item 102 is to provide the user with oil and gas reserves, production and interest information on your principal fields. See the Instructions to Item 102 of Regulation S-K. Please revise your document to provide this information.

Response:  In response to your comment, we propose to expand the Item 102 disclosure in our 2007 Form 10-K to include reserves, production and interest information for properties that are considered important to the Company's operations, which currently would include the information below:

 

Sales Volumes

Proved Reserves
at Year End
(MMBOE)

Producing Wells(1)

Drilling Statistics

Nature of Interest(3)

Natural
Gas
(MMcf/d)

Oil and
NGLs
(MBbls/d)

Total
(MBOE/d)

Wells Drilled(2)

Success Rate

Rockies:

               

    Tight Gas

               

    - Greater Natural Buttes

80

1

14

193

1,732

123

100.0%

W

    - Wattenberg

81

7

20

248

3,930

63

100.0%

W/R

    - Wamsutter

96

9

25

124

1,231

155

99.4%

W/R

    - Pinedale and Jonah

34

-

6

96

449

71

100.0%

W

Enhanced Oil Recovery

25

16

20

244

1,571

180

100.0%

W

Other

208

3

38

256

10,127

554

99.8%

W/R

 

524

36

123

1,161

19,040

1,146

99.8%

 

Southern Region:

               

    Vernon

188

-

31

196

357

67

98.5%

W

    Bossier

183

-

31

159

1,063

38

100.0%

W

    Carthage

87

4

19

113

1,328

40

100.0%

W/R

    Haley

113

-

19

62

3

25

96.0%

W

    Ozona

50

1

9

57

44

55

100.0%

W

    Austin Chalk

89

21

36

61

2,126

41

100.0%

W/R

    South Texas/Other

177

26

55

369

9,073

62

95.2%

W/R

 

887

52

200

1,017

13,994

328

98.5%

 

Total Onshore -
  Lower 48 States

1,411

88

323

2,178

33,034

1,474

99.5%

 

Alaska

-

22

22

65

55

10

90.0%

W

Gulf of Mexico

118

40

59

429

180

16

75.0%

W/R

Total United States

1,529

150

404

2,672

33,269

1,500

99.2%

 

  1. Gross number of wells in which Anadarko has an interest.
  2. Includes 1,433 gross development wells with a 99.6% success rate and 67 gross exploration wells with a 91% success rate.
  3. W = Working, R = Royalty

       Additional information regarding this table has been provided supplementally under separate cover pursuant to a confidential treatment request under the Freedom of Information Act and applicable regulations of the SEC.

Engineering Comment

Oil and Gas Properties and Activities, page 4

Proved Reserves, page 4

2.  We have reviewed your supplemental response to comment nine of our letter dated March 22, 2007. You indicate that the recovery factor assumed for the K-2 field was conservative based on your interpretation of a sheet sand depositional environment. However, we note that in the table of recovery factors by depofacies, provided in your response, a sheet sand depofacies provides the highest of all recovery factors. In addition, you assumed support from an aquifer which is apparently not present. Given that you are now estimating a recovery factor much lower, explain to us why you believe that your original interpretation was not incorrect, resulting in an overestimation of recovery factor and thus proved reserves. As part of your response, explain why you believe that you had enough reliable data to estimate the recovery factor or the presence of aquifer support, and thus the proved reserves, with the reasonable certainty required by Rule 4-10(a) of Regulation S-X. Separately, explain to us how you have considered restating your reserves for the relevant time periods to remove the proved reserve volumes presented by the downward revision. Similarly address how you have considered corresponding changes to your financial statements.

Response: The response to this comment has been provided supplementally under separate cover pursuant to a confidential treatment request under the Freedom of Information Act and applicable regulations of the SEC.

       We respectfully request an opportunity to discuss this response letter further with the staff if, following a review of this information, the staff does not concur with our views. If you have further questions or comments, or if you require additional information, please do not hesitate to contact the undersigned by telephone at (832) 636-3030 or Al Walker at (832) 636-3220 or by facsimile at (832) 636-7885.

                                                                                                        Very truly yours,

                                                                                                        /s/ BRUCE W. BUSMIRE

                                                                                                        Bruce W. Busmire

cc:     H. Paulett Eberhart, Chairperson, Audit Committee
         James D. Eggers, KPMG LLP