Anadarko Petroleum Corp. (APC) wants to sell its stakes in 155 producing wells on about 100,000 gross acres in the Washakie Basin of Wyoming and the Sand Wash Basin of Colorado. Total production for the fields, which are 96% weighted to natural gas, averaged 39.4 MMcfe/d net in the first seven months of the year, which is equal to nearly 5% of APC's daily gas production in the Rockies in 2Q2007.
In the Washakie Basin, APC is selling its stake in the Table Rock, Higgins and Brady fields, which produce from multiple-stacked pays that include the Madison, Weber, Nugget, Phosphoria, Frontier, Dakota, Almond and Lewis formations. The pays "offer significant upside potential through low-risk recompletions, proven and probable development drilling and compression additions," APC said. APC operates the Higgins and Brady fields, and it also operates the Table Rock Unit sweetening facilities.
Stakes in the Tear Drop field, which APC operates, and the Great Divide field are the main leases in the Sand Wash Basin up for sale. The fields produce from the Lewis Sands and have "significant remaining development drilling upside," according to the company.
APC said average operating costs for the assets are $1.05/Mcfe; estimated annualized operating cash flow for the properties is $51.7 million.
"The strong preference is to sell the properties as one transaction, but APC will consider offers on individual fields," the company noted.
Calyon Securities (USA) Inc. analyst Carin Dehne Kiley said the assets for sale are in areas where APC does not have "enough critical mass." However, APC has "a lot of other assets" it will be developing in the Rockies. The worth of the assets is difficult to estimate, said Kiley, because no reserve estimates were disclosed. The analyst noted that interested buyers also would have to consider current Rockies basin gas prices, which have dropped as production increased amid a shortage of pipelines necessary to carry the gas to market.
Tristone Capital has been retained to provide transaction and technical advisory services for the sale. Cawley, Gillespie & Associates Inc. has been retained to independently evaluate the oil and gas reserves. Documents on the fields will be available to prospective buyers beginning Oct. 1, including a reserves report, APC said. Data rooms will be open Oct. 5-Oct. 26. Offers are due Nov. 5, with a closing anticipated late this year or early 2008.
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