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How Will This Key Acquisition Affect Anadarko?

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Part 5
How Will This Key Acquisition Affect Anadarko? PART 5 OF 13

Anadarko Petroleum Announces $2 Billion GOM Acquisition

Anadarko Petroleum’s GOM acquisition

On September 12, 2016, Anadarko Petroleum (APC) announced that it had agreed to acquire Freeport-McMoRan’s (FCX) Gulf of Mexico assets for $2 billion.

Anadarko Petroleum Announces $2 Billion GOM Acquisition

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Anadarko Petroleum’s press release noted that the acquisition adds ~80,000 net Boepd (barrels of oil equivalent per day) to its production volumes, more than 80% of which is comprised of oil (USO) .

Anadarko’s president and CEO, Al Walker, said in a press release, “This immediately accretive, bolt-on transaction strengthens our industry-leading position in the Gulf of Mexico and is a catalyst for the company’s oil-growth objectives, with quality assets being acquired at an attractive price to create significant value.”

Walker noted that with the addition of these properties, APC’s Gulf of Mexico operations are expected to deliver net sales volumes of approximately 155,000 Boepd, ~85% of which will be oil. Other companies operating in the Gulf of Mexico include Noble Energy (NBL) and Hess (HES).

Anadarko also noted, “The assets are being acquired at an estimated EBITDAX multiple of 1.5 for the expected sales volumes over the coming 12 months, using the current futures strip price for oil and natural gas.”

According to FCX’s press release, Freeport-McMoRan’s net daily sales volumes from its deepwater GOM properties averaged ~73,000 barrels of oil equivalent (Mboe) for the 12 months ended June 30, 2016. Revenues over this period amounted to $1 billion and capital expenditures amounted to $1.6 billion.

To fund the transaction, Anadarko announced a stock offering of 35.2 million shares, representing total gross proceeds of ~$1.9 billion. The transaction is expected to close before the end of 2016.

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