CHICAGO--(BUSINESS WIRE)-- Anadarko Petroleum's (Anadarko) announcement that it has reached an agreement with BP to settle all of BP's current and future claims against Anadarko associated with last year's Deepwater Horizon event in the U.S. Gulf of Mexico will not impact the company's ratings or outlook at this time.

Under the terms of agreement, Anadarko will pay $4 billion to BP and both companies have mutually agreed to release claims against each other. BP will release claims against Anadarko for $6.1 billion of outstanding invoiced receivables as well as to forego future reimbursement costs related to the event. Additionally, BP will fully indemnify Anadarko for damage claims arising under the Oil Pollution Act, claims for natural resource damages, associated damage assessment costs and any other claims arising under the Joint Operating Agreement.

While Fitch recognizes the positive aspect of the announcement as it quantifies a portion of the potential claims against the company, the agreement doesn't provide indemnification against other possible fines (i.e. Clean Water Act, etc.) and penalties nor punitive damages or other potential claims. As stated in previous releases, Fitch believes the company has the capacity to fund cash requirements of up to approximately $6 billion via the use of existing cash balances and asset sales of largely non-producing properties and still remain investment grade. For its part, Anadarko does not consider the remaining items a significant financial risk to the company. Fitch will continue to meet and dialogue with Anadarko management to discern the remaining Deepwater Horizon related risks the company faces and how it is estimating and managing those risks.

To fund the $4 billion payment within the next 45 days, Anadarko plans on using a combination of cash on hand and drawings under its $5 billion senior secured revolving credit facility. Longer term, the company plans to repay borrowings on this facility from sales proceeds from asset monetizations, notably the potential sale of its Brazilian subsidiary subject to achieving the company's desired value.

Fitch currently rates Anadarko and its affiliates as follows:

Anadarko Petroleum Corp.

--Long-term Issuer Default Rating (IDR) - 'BBB-';

--Senior unsecured - 'BBB-';

--Senior secured revolver -'BBB';

--Rating Outlook Negative.

Kerr-McGee Corp.

--IDR - 'BBB-';

--Senior unsecured - 'BBB-';

--Rating Outlook Negative.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' dated Aug. 12, 2011;

--'Rating Oil and Gas Exploration and Production Companies: Sector Credit Factors' dated April 6, 2010.

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229

Rating Oil and Gas Exploration and Production Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=645090

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