Anadarko Petroleum Corp. is close to approaching a milestone of 600,000 boe/d net production worldwide, and assuming no significant weather-related challenges, 3Q2008 oil and natural gas output should be “above the midpoint” of its guidance of 51-54 million boe, said CEO Jim Hackett.

Anadarko’s production news came as the Houston-based independent launched plans to repurchase about 18% of its outstanding common shares. The board of directors authorized the share buyback of up to $5 billion, with $600 million to be repurchased by the end of this year. The repurchases, to be conducted through August 2011, would be funded with free cash flow generated by operations.

“Our company’s substantial net asset value is not reflected in our stock price,” said Hackett. “The share repurchase program capitalizes on this opportunity to materially benefit our shareholders.”

On the news, Anadarko’s share price early Tuesday was trading up almost 6% at around $61.05.

Anadarko also is planning to increase its capital spending “in 2009 and beyond” to accelerate the value of its unbooked resource potential, said Hackett. Anadarko is forecasting compounded annual production growth of more than 15% for the next three years.

“Our capital-efficient portfolio is generating material free cash flow at current prices, enabling us to both increase our capital spending levels and complete the share repurchases over the next three years — all while targeting a debt-to-cap ratio of between 25 and 35%,” he said. Proceeds from previously announced asset sales would continue to be used to reduce the company’s debt.

The increased spending would be directed at organic growth. Anadarko plans to develop the Jubilee field offshore Ghana as well as Tonga West in the Gulf of Mexico. The company also is scheduling more development onshore in the United States and “capitalizing upon our expanding exploration opportunities in West Africa, Brazil and the U.S. onshore,” said Hackett.

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