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    Anadarko to divest its Chinese subsidiary

    Anadarko Petroleum Corp. (NYSE: APC) has entered into a stock purchase agreement with a wholly owned subsidiary of Brightoil Petroleum (Holdings) Ltd., whereby Anadarko will divest its Chinese subsidiary for $1.075 billion.

    The subsidiary to be divested owns Anadarko's non-operating interest in the Bohai Bay field. During 2013, Anadarko's net oil sales volumes from Bohai Bay averaged approximately 11,000 barrels per day. The transaction is expected to close later this year.

    Commenting on the divestiture, analyst firm Jefferies LLC said yesterday, “4Q volumes net to APC's interest averaged 8,000 bopd. Valuation of ~$125,000/ flowing barrel is in-line with expectations…. We estimate proceeds of $1.1B will follow production…. Assuming the transaction closes later in '14 net debt to capital declines to 31% from the 34% we previously modeled. Net debt/ebitda at year-end '14 would be under 1.0x at 0.8x. Including the China proceeds, APC's cash position would be ~$5.0B."

    Global Hunter Securities stated, “This asset sale is consistent with APC's recent trend of non-operated asset divestitures and portfolio highgrading. Including this asset sale, APC divested $5.5B of assets since the beginning of 2013. The company exited 2013 with $3.7B in cash and $13.1B in long-term debt.”

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