Strong second-quarter earnings and cash flow and expectationsthat gas prices will remain high for some time prompted AnadarkoPetroleum to raise its 2000 spending program by 34% to $1.5billion. The raise amounts to a $384 million increase over thecombined total of Anadarko’s previously announced capital budget of$766 million and the $350 million remaining from the 2000 capitalbudget of Union Pacific Resources, with which Anadarko recentlymerged.

Much the spending will be on North American gas prospects, thecompany said. “This increase in capital spending will allow us toaccelerate our exploration, development and exploitation programson our outstanding portfolio of gas properties,” said ChairmanRobert J. Allison. “We expect this to result in continued increasesin earnings and cash flow. The higher prices we’re now seeing fornatural gas will be with us for a long time.”

Principal targets during the remainder of the year includeAnadarko’s natural gas projects in East Texas and Louisiana, itsgas assets in western Canada and gas and oil projects on its shelf,sub-salt and deep-water properties in the Gulf of Mexico. Anadarkoalso will pursue selected high potential exploration projects inNorth America and internationally.

The company said it plans to spend $300 million on exploration,$950 million on development (nearly triple the 1999 budget ondevelopment), $50 million on acquisitions, and $200 million oncapital interest and overhead.

The new budget represents a 121% increase from its capitalbudget for 1999, which was $680 million, and a 64% increase fromthe $917 million it spent in 1998. Anadarko currently holds 1.94billion (11.64 Tcfe) of proved reserves.

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