UPDATE: Anadarko Confirms Settlement of Tronox Adversary Proceeding, Says Will Pay $5.15B

Anadarko PetroleumCorporation (NYSE: APC) today announced that it has entered into anagreement with the plaintiffs (the "Litigation Trust") in the TronoxAdversary Proceeding to resolve all claims against Kerr-McGeeCorporation and certain of its subsidiaries and affiliates(collectively "Kerr-McGee"), which stemmed from alleged actions byKerr-McGee prior to its acquisition by Anadarko in 2006. Kerr-McGeeis now a wholly owned subsidiary of Anadarko."This settlement agreement with the Litigation Trust and the U.S.Government eliminates the uncertainty this dispute has created, andthe proceeds will fund the remediation and cleanup of the legacyenvironmental liabilities and tort claims," said Anadarko Chairman,President and CEO Al Walker. "Investor focus can now return to thetremendous value embedded in Anadarko's asset base, allowing ourpeer-leading operational and exploration results to again become thebasis for valuation. We are grateful to our stakeholders who havemaintained their confidence and trust in our people and our assets."In exchange for a complete release of all claims asserted againstKerr-McGee, Anadarko has agreed to pay a total of $5.15 billion tothe plaintiffs, which represents a principal sum of approximately$3.98 billion and 6-percent interest thereon from the filing of thecomplaint in May 2009. Under the terms of the settlement agreement,the Litigation Trust and Kerr-McGee have agreed to mutually releaseclaims against each other, and the U.S. Government and Kerr-McGeehave provided mutual covenants not to sue. The U.S. Government alsowill provide contribution protection from third-party claims seekingreimbursement from Kerr-McGee at more than 4,000 sites covered by thecovenants.The settlement agreement is subject to recommendation by the U.S.Bankruptcy Court and approval of the U.S. District Court, both in theSouthern District of New York, and the issuance of an injunctionbarring similar claims from being asserted by third parties."As we highlighted during our recent investor conference, Anadarko'semployees have continued to deliver remarkable results that have notbeen fully recognized by the equity markets due to the potentialimplications of this case. Together with our efficient allocation ofcapital and active portfolio management, the company'sindustry-leading exploration success and strong, transparent, andsustainable growth metrics uniquely position Anadarko amongst itspeers. We look forward to having our exceptional results become thefoundation for even greater operating and share-price performancethrough the balance of this decade and beyond," added Walker.The Company expects the Tronox Adversary Proceeding to be stayedpending final approval of the settlement agreement. The settlementpayment is to be made after the District Court's approval of thesettlement agreement and issuance of the injunction are final andnon-appealable. The claims asserted in the Tronox AdversaryProceeding will be dismissed with prejudice after the settlementpayment is made. This process is currently expected to be completedprior to the end of the third quarter of 2014. The Company'ssignificant cash position and available $5 billion credit facilityprovide flexibility in funding the settlement payment.The Company expects the impact of the settlement agreement to bereflected in its first-quarter 2014 financial statements. The Companyestimates it will record a gross tax benefit of approximately $1.65billion associated with the settlement, offset by approximately $1.10billion in uncertain tax positions, currently resulting in a net taxbenefit of approximately $550 million.