Anadarko Petroleum Corp. (APC), which has been shedding noncore North American properties since it bought Kerr-McGee Corp. and Western Gas Resources last year, on Monday sold a group of Central and East Texas natural gas-weighted assets to several buyers for $750 million. Only one buyer, EV Energy Partners LP (EVEP), was disclosed.
The holdings are located in the Giddings and Brookeland fields of the Austin Chalk, where APC is the largest producer. APC controls about 45% of Austin Chalk production, with output weighted 56% to natural gas (1.6 Tcf) and 44% oil (200 million bbl). Last year in the play, APC operated 1,281 wells and produced 34,000 boe/d (net). APC, which operates 892 wells in the play, has a leasehold of more than 1.03 million acres (net). Seven exploration/delineation wells were scheduled in 2006, with growth potential from existing wells estimated at 50 Bcfe.
The Austin Chalk is an Upper Cretaceous formation, about 85-90 million years old, which extends on a trend from Mexico through Central Texas and into northwest Louisiana. The chalk range is 150-750 feet thick, consisting of chalk and marl (limestone with shale).
EVEP, a master limited partnership (MLP) focused on exploration and production in the United States, said it purchased $100 million worth of assets from APC. The transaction is expected to increase EVEP’s cash flow by more than 40% in the second half of 2007.
The properties sold to the MLP have current net output of 13.8 MMcfe/d (net) and hold estimated proved reserves of 39 Bcfe (net). About 82% of the Austin Chalk properties sold to EVEP are proved developed producing, weighted 52% to natural gas, 27% to natural gas liquids and 21% to crude oil. The assets’ reserves-to-production ratio is 8.1 years; EVEP’s proforma ratio will be 15.8 years.
APC in the past year has sold its Canadian operations and several properties across the United States to rebuild its balance sheet since its mega-purchase last year (see Daily GPI, April 13; March 13; Nov. 14, 2006; Sept. 15, 2006; June 26, 2006). However, the Houston-based producer continues to be a major operator in several North American basins, including the Rocky Mountains, where it is one of the largest producers, with 10 million net acres. In the deepwater Gulf of Mexico, APC participated in nine exploration discoveries in 2006, and it holds 755 blocks, or about 2.7 million net acres offshore. APC also holds about seven million net acres in Texas and Louisiana, including oil and gas assets in the Bossier and Haley fields, South Texas, Carthage, Ozona and Hugoton.
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