•  
  •  
  •  
  •  
  •  
  • Untitled Document
    Untitled Document

    Anadarko sells portion of offshore Mozambique assets for 2.64B

    Anadarko Petroleum Corp.

    Anadarko Petroleum Corp. has entered into a definitive agreement with Indian exploration company ONGC Videsh Ltd. (OVL), a wholly owned subsidiary of Oil and Natural Gas Corporation Limited, to sell a 10% interest in Mozambique's Offshore Area 1 (Area 1) in the deepwater Rovuma Basin for $2.64 billion in cash. Anadarko will remain the operator of Area 1 with a working interest of 26.5%.

    "This transaction demonstrates our continuing ability to create substantial value through exploration and to again accelerate the value of our longer-dated projects through attractive monetizations and third-party capital," Anadarko chairman, president, and CEO Al Walker said. "Mozambique LNG is a premier global energy project, and we look forward to working with our partners and the government to advance this world-class development.Al Walker, Anadarko Petroleum Corp.

    "As the operator of Area 1, we are very pleased to have reached this agreement with OVL, which values our pre-transaction interest at more than $9.6 billion. We expect to use the net proceeds from this transaction to further accelerate the short- and intermediate-term oil and liquids opportunities we have in the Wattenberg field, Eagleford Shale, Permian and Powder River basins, as well as the Gulf of Mexico and other evolving plays in our portfolio."

    Analysis
    Analysts view the deal as positive. According to a note from Stifel analysts, the deal is positive because the sales price puts a higher value on Anadarko's interest than Cove Energy recieved when it sold a 9% stake in the same block for $1.9 billion. The current sales price implies a value of $19/sh for Anadarko's stake. Additionally, the all cash transaction "brings forward the valuation and allows the company to better redeploy the proceeds to accelerate domestic growth options, which the company has laid out as a use of funds," the analysts noted. Anadarko had previously mentioned that it was also willing to consider carried structure.

    Analysts at Jefferies LLC also view the deal favorably for Anadarko. "The cash proceeds will reduce the debt ratio to 28% by year-end from 34% in q2. While the 2014 production growth rate should remain in the 5%-7% range, we expect a shift to onshore liquids basins such as Wattenberg and Permian. Drilling will accelerate the drilling locations while the enhanced liquidity could allow APC to comfortably spend above cash flows, should they choose to. We expect APC will favor short-cycle, high margin liquids projects," they said Monday.

    Area 1 is operated by Anadarko Moçambique Area 1 Limitada (a wholly owned indirect subsidiary of Anadarko) and is located in Mozambique's deepwater Rovuma Basin. The block contains the Prosperidade and Golfinho/Atum natural gas complexes that combined hold an estimated 35 to 65-plus trillion cubic feet (Tcf) of recoverable natural gas resources. In cooperation with the Government of Mozambique, Anadarko, its partners, and Eni (as the operator of the adjacent Area 4 block) continue to advance the development of an LNG park with first LNG cargoes expected in 2018.

    Anadarko's partners in Area 1 include Mitsui E&P Mozambique Area 1, Limited (20%), BPRL Ventures Mozambique BV (10%), Videocon Mozambique Rovuma 1 Limited (10%), and PTT Exploration & Production Plc (8.5%). Empresa Nacional de Hidrocarbonetos EP's (ENH) 15% interest is carried through the exploration phase.

    Most Popular

    Related Articles

    CB&I secures oil sands maintenance contract

    07/24/2015

    CB&I has been awarded a contract for approximately $60 million by a major energy company to provide maintenance services for three separate oil sands facilities in Alberta, Canada.

    Legacy updates on Permian funding and on East Texas purchase

    07/06/2015 The operating subsidiary of Legacy Reserves LP (Nasdaq: LGCY) has entered into an agreement with funds managed by TPG Special Situations Partners (TSSP) to fund horizontal development of certain of...

    Saddlehorn Pipeline to add new origin at Carr, Colorado

    06/24/2015 Saddlehorn Pipeline Co. LLC says that the Saddlehorn Pipeline system will extend to Carr, Colorado. The 50-mile pipeline extension from Platteville, Colorado, to Carr, which is to be constructed wi...

    Guyana-Venezuela oil dispute heats up

    06/10/2015 The discovery of what may be significant oil deposits off the northern coast of South America has reignited a border controversy between Guyana and Venezuela, its neighbor to the west, according to...

    Anadarko: Contractor selected for initial onshore Mozambique LNG development

    05/18/2015 Anadarko Petroleum Corp., on behalf of the co-venturers in Mozambique's Offshore Area 1, and after a competitive front-end engineering and design (FEED) process, says that a consortium consisting o...

    Patterson joins Chesapeake in EVP role

    05/04/2015 Frank Patterson is joining Chesapeake Energy Corp. as executive vice president of exploration, land, and subsurface technology. Patterson replaces John Kapchinske, who recently retired from the com...

    More Oil & Gas Financial Articles

    CB&I secures oil sands maintenance contract

    Fri, Jul 24, 2015

    CB&I has been awarded a contract for approximately $60 million by a major energy company to provide maintenance services for three separate oil sands facilities in Alberta, Canada.

    Legacy updates on Permian funding and on East Texas purchase

    Mon, Jul 6, 2015

    The operating subsidiary of Legacy Reserves LP (Nasdaq: LGCY) has entered into an agreement with funds managed by TPG Special Situations Partners (TSSP) to fund horizontal development of certain of Legacy's Spraberry, Wolfcamp, and Bone Spring rights in the Permian Basin. Additionally, Legacy has entered into separate agreements with affiliates of Anadarko Petroleum and Western Gas Partners LP to purchase natural gas properties and gathering and processing assets in East Texas for a combined $440 million.

    Saddlehorn Pipeline to add new origin at Carr, Colorado

    Wed, Jun 24, 2015

    Saddlehorn Pipeline Co. LLC says that the Saddlehorn Pipeline system will extend to Carr, Colorado. The 50-mile pipeline extension from Platteville, Colorado, to Carr, which is to be constructed with 16-inch-diameter pipe, will provide a connection to existing crude oil assets in that region. This extension has been designed to provide shippers with more options and access into the Saddlehorn Pipeline system.  

    Guyana-Venezuela oil dispute heats up

    Wed, Jun 10, 2015

    The discovery of what may be significant oil deposits off the northern coast of South America has reignited a border controversy between Guyana and Venezuela, its neighbor to the west, according to a June 9 article by PennEnergy. The border dispute had been dormant for years until Exxon Mobil Corp. announced the oil discovery about 120 miles (193 kilometers) off the country’s coast in May.

    Anadarko: Contractor selected for initial onshore Mozambique LNG development

    Mon, May 18, 2015

    Anadarko Petroleum Corp., on behalf of the co-venturers in Mozambique's Offshore Area 1, and after a competitive front-end engineering and design (FEED) process, says that a consortium consisting of CB&I, Chiyoda Corp., and Saipem (the CCS joint venture) has been selected for the initial development of the onshore LNG park in Mozambique.

    OGFJ photo of the day


    Click to view slideshow

    Oil & Gas Jobs

    Search More Job Listings >>
    Subscribe to OGFJ