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Anadarko Completes $4B ACC Divestiture, Announces Asset Swap with Chevron

Following up on its divestiture plan that was first announced in June, Anadarko Petroleum Corp. on Thursday announced that it has completed the sale of its Anadarko Canada Corp. subsidiary to Canadian Natural Resources Ltd. with no adjustments to the previously announced aggregate consideration of US$4.075 billion. In addition, Anadarko announced that it has agreed to divest its remaining Canadian arctic frontier interests through a separate exchange of assets with Chevron USA Inc. and Chevron Canada Limited, wholly owned subsidiaries of Chevron Corp.

Anadarko said the transaction with Chevron involves a swap of Anadarko's interests in the Mackenzie Delta, Beaufort Sea and Yukon areas in return for an incremental 12.5% working interest in seven deepwater Gulf of Mexico blocks encompassing the Tonga discovery, as well as enhanced terms within the companies' recently announced West Texas exploration joint venture. Anadarko, which currently is drilling an offset well to the Tonga discovery, now has a 37.5% working interest and intends to accelerate development of the field, potentially as a tie-back to the company's 100% owned Constitution production facility.

"These divestitures advance our efforts to refocus the portfolio and reduce debt following our acquisitions of Kerr-McGee and Western Gas Resources in August," said Anadarko CEO Jim Hackett. "The sale of Anadarko Canada has allowed us to reduce debt by about $4 billion, while the Chevron transaction has provided valuable new interests within our core onshore and deepwater Gulf of Mexico focus areas."

Canadian Natural Resources said that ACC effectively became a subsidiary of the company on Thursday and that it plans to immediately integrate ACC into its ongoing operations, noting that the subsidiary's land and production base are all located in Western Canada and are high quality, concentrated natural gas-weighted assets with strong netbacks and a long reserve life.

ACC produces in excess of 350 MMcf/d of natural gas and approximately 9,000 b/d of light crude oil and natural gas liquids production and will provide additional upside to Canadian Natural's already strong natural gas project portfolio in Canada. The assets also include approximately 1.5 million net undeveloped acres and key strategic facilities in the high growth areas of Northeast British Columbia and Northwest Alberta.

In September Canadian Natural said it would buy ACC for $4.24 billion, including working capital adjustments (see Daily GPI, Sept. 15). ACC's land and production base are all in Western Canada and are concentrated natural gas-weighted assets with strong netbacks and long reserve life. The Canadian Natural deal specifically did not include Anadarko's interests in the Mackenzie Delta and other Canadian arctic frontier properties.

Anadarko put ACC on the market in late June (see Daily GPI, June 29) so that it could use the proceeds from the sale to help fund its blockbuster acquisition of Kerr-McGee and Western Gas Resources (see Daily GPI, Aug. 24; June 26).

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