Anadarko sells Eagle Ford assets to Sanchez Energy for $2.3B

Anadarko Petroleum Corp. (NYSE: APC) has agreed to sell its Eagle Ford Shale assets in South Texas for approximately $2.3 billion to Sanchez Energy Corp. and Blackstone Group LP. Sanchez and Blackstone entered into a 50/50 partnership to acquire approximately 155,000 net acres primarily located in Dimmit and Webb counties. At the end of the fourth quarter of 2016, sales volumes from these properties totaled approximately 45,000 barrels of liquids per day and approximately 131 million cubic feet of natural gas per day.

Anadarko's sponsored master limited partnership, Western Gas Partners LP (NYSE: WES), will continue to own and operate its midstream assets in South Texas and is expected to benefit from drilling commitments made by the buyers in conjunction with the transaction.

"The ongoing success of our portfolio-management activities provides us with the flexibility to further accelerate capital investments in our higher-return oil opportunities in the Delaware Basin, the DJ Basin, and the deepwater Gulf of Mexico, which drive our ability to deliver a 12- to 14-percent five-year compounded annual oil growth rate," said Al Walker, Anadarko Chairman, President and CEO. 

Anadarko Petroleum received approximately “$34,400 per flowing barrel which reflects its operatorship premium to the $29,365 per flowing barrel that SM received for its recent divestiture (includes midstream,” noted Cowen and Company analysts in a note to investors following the news.

The deal price “appears in-line with investor expectations following SM's recent deal,” the analysts said, noting expectations for Anadarko to end the first quarter of 2017 with over $6 billion in cash “providing it with the flexibility to accelerate drilling beyond 12% - 14% 5-yr oil CAGR or to add opportunistically to its core plays.”

Latham & Watkins LLP represented Anadarko Petroleum and Kirkland & Ellis served as legal advisor to Blackstone. Jefferies & Company Inc. served as the sole financial advisor to Blackstone. JPMorgan Chase & Co., Citigroup Inc. and Morgan Stanley are providing committed debt financing to back Blackstone's working interest purchase.

The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions and adjustments.


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Shell Leverages Data to Transform from Reactive to Predictive Operations

This 6-page report describes how Shell engaged in a massive project with OSIsoft to transform the...

Selection, Use, Care and Maintenance of FR Clothing

For industries operating in an inherently dangerous environment, the importance of selecting the ...

Evolution or Revolution: IT / OT convergence means a world of possibilities

The oil and gas industry is experiencing a rapid paradigm shift in regards to digital transformat...

Predict, Prescribe, Profit: Creating a World that Doesn't Break Down

What are you doing to reduce unplanned downtime at your plant? Equipment breakdowns and process i...