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How Western Gas Could Win—and Lose—from Anadarko’s Asset Sale

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Anadarko’s asset sale

Anadarko Petroleum (APC), Western Gas Partners’ (WES) sponsor, recently announced the sale of its Eagle Ford assets to Houston-based Sanchez Energy (SN) for $2.3 billion. In this part, we’ll try to gauge how this transaction could impact Western Gas Partners, which would continue to provide midstream services for the assets sold.

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Why WES could win and lose

Western Gas Partners is expected to benefit from the slight recovery in drilling activity in the Eagle Ford region. Sanchez Energy is expected to complete 132 DUC (drilled and uncompleted) wells in the region. It’s expected to operate four rigs on the acquired acreage. This is expected to drive WES’s Eagle Ford throughput volumes.

The partnership might lose, however, if its contracts are not renewed in the future and go to Sanchez Energy’s own midstream company, Sanchez Production Partners (SPP). But this will not likely be a concern for WES in the near future.

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