Anadarko Petroleum Corporation and Kerr-McGee Corporation: Rating Report

DBRS Limited (DBRS) confirmed the Issuer Rating of Anadarko Petroleum Corporation (Anadarko or the Company) and the Senior Unsecured Notes and Debentures ratings of Anadarko and Kerr-McGee Corporation at BBB. All trends are Stable. The Stable trend reflects improvement in Anadarko’s key credit metrics over the past year due primarily to increased higher-margin oil production and improving oil and natural gas prices. Over the last twelve months ended September 30, 2017 (LTM 2017), the Company’s lease-adjusted debt-to-capital ratio was 54.6% and lease-adjusted debt-to-cash flow ratio was 3.81 times. However, the key credit metrics remain outside the BBB range. The Company’s focus continues to be (1) maintaining capital discipline, (2) concentrating on higher-margin oil levered opportunities and (3) capturing operating and capital efficiencies. These actions, coupled with DBRS’s view of a gradually improving pricing environment ($55 per barrel (bbl) in 2018 and 2019 for West Texas Intermediate (WTI) oil and $3 per thousand cubic feet (mcf) for New York Mercantile Exchange (NYMEX) natural gas), should result in Anadarko’s key credit metrics further strengthening and support the Company’s BBB rating.